TIP-TOP TOY COMPANY, INC. Janice Merritt, co-owner of Tip-Top Toy Company, Inc., was approached in January 2012 by a chain-store buyer and asked to produce a variety of wooden toys for the chain store for the 2012 Christmas season. The order would assure that Tip-Top would operate at or near capacity through October. Since shipments to the chain could begin in the summer, it was possible that last-minute reorders by the chain could continue near- capacity operations into early December. Tip-Top Toy Company was established in 1995 by Janice Merritt, her husband Tom and her father Roy Magruder. Janice held a master's degree in child development and was certified to teach in the elementary grades. Upon graduation from the state university in the early 1990's she had been unable to obtain a teaching position in the public schools. For two years she taught in a private preschool and kindergarten. While there she became aware or the market for creative toys for preschool children. Quality toys for this market seemed expensive to Janice. She believed quality toys could be produced and sold profitably for less than the prices charged by the large, well-known manufacturers Tom Merritt had been a sales representative for an industrial goods manufacturer but was enthusiastic about his wife's idea for a business of their own. Shortly after Tip-Top Toy was established, Tom quit his job to help market the company's products. Roy Magruder had just retired as production superintendent of a furniture manufacturer and assumed responsibility for manufacturing operations in the new toy company With the Merritt's limited savings and a major investment by Roy Magruder, the Midland State Bank loaned short-term working capital funds to assist in starting the business