Note 5 – Debt

Line of Credit

The Company entered into a loan agreement with JPMorgan Chase Bank, NA on May 31, 2011. The agreement provides a revolving line of credit up to $1,000,000 with availability based on 80% of eligible assets (as defined) at a rate of Libor plus 2%. The line of credit is collateralized by the Company's accounts receivable, is for the term of 12 months, and provides for financial covenants. At December 31, 2011, the Company has not drawn any funds from the line of credit.

Notes Payable

At December 31, 2011 and 2010, notes payable consist of $95,000 and $261,000, respectively, of borrowings for the purchase of equipment. These notes bear interest at rates ranging from 8.0% to 9.5% per year and mature through August 2013. The notes are collateralized by the equipment purchased with net book values of $95,000 and $237,000, at December 31, 2011 and 2010, respectively.

As of December 31, 2011 future principal payments under these notes are:

For the Year Ending	Amount
December 31,	(in thousands)
2012	$	62
2013		33
Total payments		95
Current portion		62
Long-Term Portion	$	33

Capital Lease Obligations

The Company has equipment under two capital lease obligations expiring at various times through November 2014. The assets and liabilities under capital leases are recorded at the lower of the present value of the minimum lease payments or the fair values of the assets.

At December 31, 2011, future minimum payments under these capital leases are:

For the Year Ending	Amount
December 31,	(in thousands)
2012	$	134
2013		145
2014		121
Total minimum lease payments		400
Less: amounts representing interest		(17	)
Net minimum lease payments		383
Current portion		135
Long-term portion	$	248

The interest rate pertaining to these capital leases are 3.0% and 3.3%. The gross book value and the net book of the related assets is approximately $414,000 and $380,000 at December 31, 2011.