FINANCING ARRANGEMENTS

6 Months Ended

Jun. 30, 2015

NOTE 3. FINANCING ARRANGEMENTS

We have a credit agreement with Wells Fargo Bank (WFB) which was most recently amended on May 7, 2015 and provides for a line of credit arrangement of $15.0 million that expires, if not renewed, on May 31, 2018. The credit arrangement also has a $1.8 million real estate term note outstanding with a maturity date of March 31, 2027, an additional $1.7 million real estate term note outstanding that is due, if not renewed, on December 31, 2027, an equipment loan for $2.7 million and a new term loan facility of up to $1.0 million for capital expenditures, both with maturity dates of May 31, 2018. We incurred $54,838 of related costs and fees associated with the amended credit agreement. These fees were capitalized as a debt discount and are being amortized as interest expense over the term of the debt agreement. As of June 30, 2015, we have not borrowed against the $1.0 million capital term note.

Long-term debt at June 30, 2015 and December 31, 2014 consisted of the following:

	June 30			December 31
	2015			2014
Real Estate Term Loan 1, interest at three month LIBOR + 2.75%, due in installments through March 31, 2027	$	1,356,228		$	1,415,461
Real Estate Term Loan 2, interest at three month LIBOR + 2.75%, due in installments through December 31, 2027	1,404,300			1,460,100
Equipment loan, interest at three month LIBOR + 2.75%, due January 31, 2016	—			102,917
Equipment loan, interest at three month LIBOR + 2.75%, due May 31, 2018	—			1,117,863
Equipment loan, interest at three month LIBOR + 2.75%, due May 31, 2018	—			349,000
Equipment loan, interest at three month LIBOR + 2.75%, due May 31, 2018	2,689,220			—
Blue Earth Bond, which bears a variable interest rate, due in installments through June 30, 2021	280,000			360,000
Debt Issuance Costs	(53,315		)	—

Total debt	5,676,433			4,805,341
Less current maturities	857,027			732,835

Long-term debt	$	4,819,406		$	4,072,506

Under the credit agreement, both the line of credit and real estate term notes are subject to variations in the LIBOR rate. Our line of credit bears interest at three-month LIBOR + 2.25% (approximately 2.5% at June 30, 2015) while our real estate term notes bear interest at three-month LIBOR + 2.75% (approximately 3.0% at June 30, 2015). The weighted-average interest rate on our line of credit was 2.8% for the three and six months ended June 30, 2015. We had borrowing on our line of credit of $8,471,042 and $7,998,184 outstanding as of June 30, 2015 and December 31, 2014, respectively. The line of credit requires a lock box arrangement; however there are no acceleration clauses that would accelerate the maturity of our outstanding borrowings.

The credit agreement contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures.

The availability under the line is subject to borrowing base requirements, and advances are at the discretion of the lender. At June 30, 2015, we have net unused availability under our line of credit of approximately $5.5 million. The line is secured by substantially all of our assets.