Ann: Facility for US$3M/$5M Line of Credit Finalized with Alterna, page-7

Hi Seb. having worked in the Finance industry many years ago and rereading this Ann. a few times, I believe it is called a type of 'Factoring' or 'Debtor Financing' (from an Aussie view) I was involved in a few some 30 years ago and reading this section of the announcement a few times.
It works like this (well what I was involved in)
- Coy (AJX) gives its 'debtors list' to the financier who 'assess' them pays a % of the Debtors to AJX . I believe the % may be based on the credit worthiness of each 'Debtor'. Not 100% sure of that .
-When the 'Debtor (s)' pays the Financier that 'Debtor's' amount is cleared -less a small fee.
-Interest, variable, is calc on daily amount owing by Coy (AJX) basis and charged monthly?
-Did not get involved in 'Inventory'

Note my understanding of it. So may be out somewhat.
If all goes well OK but not the best way of finance- my opinion.
However it will stop any shareholder dilution.

Keep safe all.

Highlights:
• US$3.0M asset-based line of credit that can increase to US$5.0M as the business grows, initial estimated availability of US$1.1M
• Variable rate interest rate – initial facility interest rate of 8.5% p.a.
• The Facility borrowing base, which drives availability, is determined by a calculation of eligible accounts receivable and inventory items
• Facility is secured with working-capital related assets such as accounts receivable and inventory
• Three-year agreement which can be terminated by the Company with notice and payment of a sliding scale fee that decreases annually.