Debt and Other Financing Arrangements

12 Months Ended

Dec. 31, 2014

10. Debt and Other Financing Arrangements

On March 20, 2014, the Company entered into an equipment financing arrangement with Banc of America Leasing & Capital, LLC (the “Lender”), which it amended on August 8, 2014, including a Master Loan and Security Agreement and related documentation (collectively the “Equipment Loan Arrangement”) which provided the Company with the ability to finance, at its option, up to $7.5 million of new and used equipment purchases. Each such purchase financed under the Equipment Loan Arrangement is documented by the execution of an equipment note. Each note has a maturity date of 60 months from the applicable loan date, and bears interest at the then current 30-day LIBOR rate + 2.00%. Principal and interest are payable over the 60-month repayment period and principal is repayable without premium or penalty. Borrowings under the Equipment Loan Arrangement are secured by a first priority security interest in the equipment acquired with the proceeds of the equipment notes. Under the Equipment Loan Arrangement, the Company is subject to a maximum quarterly funded debt to EBITDA ratio and a minimum fixed charge coverage ratio. The Company was in compliance with all loan covenants as of December 31, 2014.

Under the Equipment Loan Arrangement, the Company executed notes on March 24, 2014, May 22, 2014, June 13, 2014 and August 8, 2014 in the amounts of $1,052,943, $1,935,241, $3,011,816 and $999,626, respectively, for total borrowings of $7.0 million, of which $752 thousand was repaid during 2014. The interest rate for these notes for the year ended December 31, 2014 was 2.15%, and represented $81,877 of interest expense. As of December 31, 2014, the interest rate was 2.16%. There was no long term debt for the same period in 2013.

The annual principal repayment requirements for debt obligations as of December 31, 2014 are as follows:

2015	$	1,399,925
2016	$	1,399,925
2017	$	1,399,925
2018	$	1,399,925
2019	$	648,383
Total long-term debt	$	6,248,083
Less current portion of long-term debt	$	(1,399,925)
Total long-term debt, net of current portion	$	4,848,158

- 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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