Debt

12 Months Ended

Dec. 31, 2013

(5) DEBT:

We owed $571,227 and $412,952, at December 31, 2013 and 2012, respectively, on a mortgage note payable, collateralized by land and a building we acquired in September 2010. We refinanced our mortgage in July 2013. Monthly payments of $3,506, including principal and interest at 3.99%, are due, with a final balloon payment of approximately $350,000 due in July 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. The loan has a covenant requiring our ratio of EBITDA to interest expense and prior period current maturities of long-term debt to not be less than 1.3.

We owed $280,548 and $300,716 at December 31, 2013 and 2012, respectively, under an equipment loan related to the installation of the pulse dryer and related building renovations. We refinanced our equipment note in July 2013, in conjunction with our mortgage refinancing. 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 our 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.

We also owed $177,905 under notes payable to two vendors at December 31, 2012. These vendor loans were refinanced into our mortgage in July 2013.

Long-term debt obligations for the next five years and thereafter are as follows:

Year Ending December 31,	Year
2014	$	56,318
2015		59,941
2016		62,411
2017		64,982
2018		67,658
Thereafter		540,465
	$	851,775

In July 2013, we refinanced our $100,000 line of credit, with interest due monthly at prime plus 1.8%, with a minimum rate of 4.75% (5.05% at December 31, 2013), due in full July 2014, unless further extended. The line of credit is collateralized by our inventory, accounts receivable, equipment, general intangibles and fixtures. The credit line is also cross collateralized with our mortgage and equipment loans. There was no balance outstanding at December 31, 2013. We owed $94,487 on the line of credit as of December 31, 2012.