(3) LONG-TERM DEBT

Prior to July 2013, our mortgage note payable was collateralized by land and a building located in Alachua, Florida. Monthly payments were $2,995, including principal and interest at 5.375%. Payments were due beginning January 1, 2011 through and including August 1, 2015, with a final balloon payment of approximately $376,000 due in September 2015. The principal balance on the note as of June 30, 2013 was $405,998.

In July 2013, the mortgage was refinanced with the execution of a note for $578,988. Monthly payments of $3,506, including principal and interest at 3.99%, are due beginning August 2013 through and including June 2023, with a final balloon payment of approximately $350,000 due in August 2023. The note is secured by a mortgage on our Alachua property. The note has a prepayment penalty that starts at 5% within the first year and decreases 1% annually thereafter. There is no prepayment penalty if the loan is repaid with cash on hand. At June 30, 2013, the note has been classified in accordance with the terms of the refinancing.

Prior to July 2013, our equipment note payable was collateralized by substantially all the Company’s assets, including a mortgage on our 40 acre complex located in High Springs, Florida and was guaranteed by C.E. Rick Strattan, the Company’s Chairman and Chief Executive Officer. Monthly payments were $2,833, including principal and interest at 6.5%, were due with a final balloon payment of approximately $252,000 due in March 2016. The loan was also subject to an annual minimum debt service coverage ratio of 1.25. The principal balance on the equipment note as of June 30, 2013 was $293,117.

In July 2013, the equipment note was refinanced with the execution of a note for $295,800. Monthly payments of $4,051, including principal and interest at 3.99%, are due beginning August 2013 through and including July 2020. The note is collateralized by all of our equipment. The mortgage on the High Springs property was released in connection with the refinancing. There is a prepayment penalty of 2% of the outstanding balance if we refinance the loan with another financial institution within five years. There is no prepayment penalty if the loan is repaid with cash on hand. At June 30, 2013, the note has been classified in accordance with the terms of the refinancing.

Prior to July 2013, our solar equipment note payable was collateralized by the solar electric system with monthly payments of $2,290, including principal and interest at 10%. The principal balance on this loan as of June 30, 2013 was $38,399. In July 2013, this note was repaid in connection with the mortgage note described above.

Prior to July 2013, we had financed the balance due to the contractor for the installation of our pulse dryer that was installed in 2011. The terms of the note required monthly payments of $8,244, including interest at 8.5%, with final payment of $28,685 plus interest due in February 2014. The loan was collateralized by the pulse dryer. The principal balance on this note as of June 30, 2013 was $83,214. In July 2013, this note was repaid in connection with the mortgage note described above.