Long-Term Note Payable

6 Months Ended

Jun. 30, 2011

Long-Term Note Payable

Long-Term Note Payable

Note 8. Long-term Note Payable

Long-term note payable at June 30, 2011 consisted of the following (in thousands):

	Principal		Unamortized Discount			Total
Current portion of long-term debt	$	1,935	($	59	)	$	1,876
Long-term debt		2,181		(22	)		2,159
Total long-term note payable	$	4,116	($	81	)	$	4,035

Long-term note payable at December 31, 2010 consisted of the following (in thousands):

	Principal		Unamortized Discount			Total
Current portion of long-term debt	$	1,822	($	75	)	$	1,747
Long-term debt		3,178		(47	)		3,131
Total long-term note payable	$	5,000	($	122	)	$	4,878

On March 31, 2010, the Company entered into a growth capital facility agreement and immediately issued a senior secured long-term note payable for $5.0 million. The note issued under the agreement is secured by all of the Company's assets, except intellectual property. The note carries a fixed interest rate of 12.04%, with interest only payments for the first nine months and then equal principal and interest payments for an additional 30 months. In connection with issuing the note, the Company paid an upfront facility fee of $0.1 million and incurred closing costs of $0.1 million. The combined facility fee and closing costs have been recorded as a discount to the note payable and will be amortized as a component of interest expense using the effective interest method over the term of the note (discount is based on an implied interest rate of 13.84%). In addition, the Company agreed to pay a $0.4 million closing fee upon maturity of the note, which will be accreted to interest expense using the effective interest method over the life of the note. In March 2011, the Company entered into an amendment to its growth capital facility. Under the terms of the amendment, the Company may borrow an additional $5.0 million through September 30, 2011. The terms of the additional $5.0 million note would be identical to the first note issued under the growth capital facility except the Company would not incur any additional upfront facility fees. In addition, the amendment modifies the covenants under which the Company must comply. Under the amended agreement, 2011 revenues, on a trailing six-month basis, are required to be at least 80% of projected revenues. Revenues for 2012 and beyond are required to be at least €5.7 million per quarter. Non-compliance with the covenants could result in the principal of the note becoming due and payable. As of June 30, 2011, the Company was in compliance with financial covenants set forth in the amended growth capital facility.

Principal and interest payments on the long-term note payable at June 30, 2011 for each of the following five years are as follows (in thousands):

Year ended December 31,
2011	1,163
2012	2,326
2013	1,782
2014	0
2015	0