Q: What are your guidelines for mezzanine financing?
A: Our guidelines for mezzanine financing structures are:

• Security — Subordinated notes with warrants or preferred stock
• Size/Role — $2 million to $4 million mezzanine financings, selectively participating as a co-investor in larger transactions
• Return — Current pay of 12% to 18% with total return of 18% to 22%
• Equity Features — Minority interest; board observation rights
• Leverage — The total debt to EBITDA multiple 4.0X or less
• Term — 5 years maximum