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Financing Agreements and Subsequent Event | 12 Months Ended
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Dec. 31, 2016
Financing Agreements and Subsequent Event |
Financing Agreements and Subsequent Event | NOTE 3 - Financing Agreements and Subsequent Event We have a credit agreement with Wells Fargo Bank. Under the credit agreement, both the line of credit and real estate term notes are subject to variations in the LIBOR rate. Our line of credit bears interest at three-month LIBOR + 2.25% (approximately 3.25% at December 31, 2016) while our real estate term notes bear interest at three-month LIBOR + 2.75% (approximately 3.75% at December 31, 2016). The weighted-average interest rate on our line of credit was 3.1% and 2.8% for the twelve months ended December 31, 2016 and December 31, 2015, respectively. We had borrowing on our line of credit of $7,315,262 and $7,691,237 outstanding as of December 31, 2016 and December 31, 2015, respectively. The line of credit requires a lock box arrangement; however there are no subjective acceleration clauses that would accelerate the maturity of our outstanding borrowings. On January 12, 2017, the Company entered into the Tenth Amendment (the Tenth Amendment) to its Third Amended and Restated Credit and Security Agreement with Wells Fargo Bank, National Association (the Amended Credit Agreement). The Tenth Amendment provides for, among other things, a fixed charge coverage ratio of not less than (i) 1.05 to 1.00 for the trailing twelve month period ending December 31, 2016, up to and through the trailing twelve month period ending on June 30, 2017, and (ii) 1.10 to 1.00 for each trailing twelve month period thereafter. The fixed charge coverage ratio in existence on December 31, 2016, that the Company was required to maintain under the Amended Credit Agreement was not less than (i) 1.20 to 1.00 for the trailing twelve month period ending December 31, 2016, and (i) 1.15 to 1.00 for each period thereafter. The Tenth Amendment did not amend any other terms of the line of credit or the equipment, capital expenditure or real estate term notes under the existing Amended Credit Agreement. The credit agreement contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures. The availability under the line is subject to borrowing base requirements. At December 31, 2016, we have net unused availability under our line of credit of approximately $5.7 million. The line is secured by substantially all of our assets. As part of the July 1, 2015 Devicix acquisition we entered into two unsecured subordinated promissory notes payable to the seller in the principal amounts of $1.0 million and $1.3 million. The $1.0 million promissory note has a four-year term, bearing interest at 4% per annum, requiring monthly principal and interest payments of $22,579 and is subject to offsets if certain revenue levels are not met. The $1.3 million promissory note has a four year term and bears interest at 4% per annum, requiring monthly principal and interest payments of $29,353 and is not subject to offset. A summary of long-term debt balances at December 31, 2016 and 2015 is as follows:
Description |  | 2016 |  | 2015 |
Term notes payable - Wells Fargo Bank, N.A. |  |  |  |  |
Real estate term notes bearing interest at three month LIBOR + 2.75% maturing March 31, 2027, and December 31, 2027 with combined monthly payments of approximately $19,000 plus interest, secured by substantially all assets. |  | $ | 2,415,428 |  | $ | 2,645,495 |
Equipment notes bearing interest at three month LIBOR + 2.75% maturing May 2018 with a combined monthly payments of approximately $46,000 plus interest, secured by substantially all assets |  | 2,489,624 |  | 2,633,740 |
Industrial revenue bond payable to the City of Blue Earth, Minnesota which bears a variable interest rate (approx. 0.24% at December 31, 2014), and has a maturity date of June 1, 2021, with principal of $80,000 payable annually on June 1 |  | 200,000 |  | 280,000 |
Devicix Acquistion Note 1 payable to DeLange Holdings bears interest rate of 4.0% per annum, maturing July 1, 2019 |  | 643,585 |  | 903,128 |
Devicix Acquistion Note 2 payable to DeLange Holdings bears interest rate of 4.0% per annum, maturing July 1, 2019 |  | 836,661 |  | 1,174,066 |
|  | 6,585,298 |  | 7,636,429 |
Discount on Devicix Notes Payable |  | (102,424 | ) | (142,072 | )
Debt issuance Costs |  | (25,896 | ) | (44,175 | )
Total long-term debt |  | 6,456,978 |  | 7,450,182 |
Current maturities of long-term debt |  | (1,565,347 | ) | (1,495,513 | )
Long-term debt - net of current maturities |  | $ | 4,891,631 |  | $ | 5,954,669 |
Future maturity requirements for long-term debt outstanding as of December 31, 2016, are as follows:
Years Ending December 31, |  | Amount |
2017 |  | $ | 1,565,347 |
2018 |  | 2,716,668 |
2019 |  | 578,055 |
2020 |  | 230,067 |
2021 |  | 230,067 |
Future |  | 1,265,094 |
|  | $ | 6,585,298 |

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