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Notes Payable

9 Months Ended

Sep. 30, 2012

Note 7 - Notes Payable

In September 2012, the Company entered into a Master Security Agreement with General Electric Capital Corporation ("GE"), whereby the Company can borrow up to $2.0 million to finance the purchases of equipment ("Equipment Loan"). Each Equipment Loan bears interest at the three-year U.S. Government treasury rate plus 11.68%, provided that the rate shall not be less than 12.1%, and is to be repaid over forty-two (42) months. GE will maintain a security interest in all equipment financed under this facility. During the three months ended September 30, 2012, the Company financed $0.5 million at an interest rate of 12.1% with monthly principal payments of $13,089 starting October 2012. Interest accrues on the outstanding balance until paid in full.

Aggregate future minimum principal payments on the GE Equipment Loan at September 30, 2012 are as follows (in thousands):

Year	Amount
2012	$	39
2013		157
2014		157
2015		157
2016		40
	$	550

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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