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Leases and Commitments

12 Months Ended

Dec. 31, 2011

4) Leases and Commitments

Capital Lease Obligations

The Company has a $1.25 million equipment finance facility with Sovereign Bank which expires in May 2012. At December 31, 2011, the Company had production equipment with a cost of $2.55 million and accumulated amortization of $1.89 million under capital leases. At December 25, 2010, the Company had production equipment with a cost of $2.31 million and accumulated amortization of $1.62 million under capital leases. All capital leases are three year leases with a one dollar buyout. At December 31, 2011, the Company had $842 thousand of availability remaining against the equipment finance facility.

Future payments required under capital lease obligations are as follows at December 31, 2011:

	2012	$ 222,010
	2013	129,438
	2014	78,067
		-------------
Total future minimum lease payments		429,515

	Less amount representing interest	21,273
	at rates ranging between 4.4% and 5.9%	-------------

Present value of net future lease payments		408,242

	Less current portion	208,504
		-------------
Long-term obligation under capital leases		$ 199,738
		=======

Interest expense was approximately $33 thousand, $32 thousand, and $38 thousand for 2011, 2010, and 2009, respectively.

Operating Lease Obligations

The Company entered into a 10-year lease for the Norton facilities effective on March 1, 2006. Rental expense for operating leases is recognized on a straight-line basis over the term of the lease and was $129 thousand in each of the years 2011, 2010 and 2009.

In February 2011, the Company entered into a lease for an additional 13,800 square feet in Attleboro, MA. The lease is for one year and requires monthly payments of $6,900. The Company has the option to extend the lease for 4 one year periods. In February 2012 the Company extended the lease for one additional year.

Future minimum rental payments over the terms of the lease agreements are approximately as follows:

Fiscal year:

	2012		221,000
	2013		147,000
	2014		148,500
	2015		150,000
	2016		37,500
	Thereafter		--
			-------------
			$ 704,000
			=======

- Definition

The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights.

+ References+ Details