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Notes Payable and Capital Leases | 12 Months Ended
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Dec. 31, 2015
Debt Disclosure [Abstract] |
Debt and Capital Leases Disclosures [Text Block] |
8. | Notes Payable and Capital Leases
Long term debt consists of:
|  | Dec. 31, 2015 |  | Dec. 31, 2014 |
Mezzanine Note Payable with BMO Private Equity, balance due January 18, 2018, interest at 11.50% (effective rate of 15.56%) |  | $ | 5,000,000 |  | $ | 5,000,000 |
Less: Remaining debt discount to be amortized |  |  | (283,000) |  |  | (430,000) |
Term Loan with Barrington Bank, payable in monthly installments of $11,000 amortized over 7 years, interest at 6.25%, balance due May 2016, which uses balloon production and related equipment as collateral |  |  | 311,000 |  |  | 426,000 |
Mortgage Loan with BMO Harris, payable in monthly installments of $7,778 plus interest at prime (3.25%) plus a variable rate (based on loan covenants) of 0.75% (4.0%) at December 31, 2015 (amortized over 25 years), balance due July 18, 2017 |  |  | 1,804,000 |  |  | 1,898,000 |
Promissory Note with John J. Blaser and Stephanie M. Blaser (Related Party) due on demand, interest at 4.25%. |  |  | - |  |  | 10,000 |
Term Loan with BMO Harris, payable in monthly installments of $22,323 beginning April 2012 plus interest at prime (3.25%) plus a variable rate (based on loan covenants) of 0.75% (4.00%) at December 31, 2015, (amortized over 5 years), balance due March 31, 2017. |  |  | 335,000 |  |  | 603,000 |
Capital Lease with First American Equipment Finance, payable in monthly installments of $2,890 (amortized over 5 years). |  |  | 67,000 |  |  | 96,000 |
Capital Lease with Wells Fargo, payable in monthly installments of $367 (amortized over 5 years). |  |  | 10,000 |  |  | 14,000 |
Capital Lease with Wells Fargo, payable in monthly installments of $550 (amortized over 3 years). |  |  | 10,000 |  |  | 15,000 |
Subordinated Notes (Officer) due on demand, interest at 9% (see Notes 9, 12). |  |  | 5,000 |  |  | 4,000 |
Subordinated Notes (Officer) due on demand, interest at 8% (see Notes 9, 12). |  |  | 741,000 |  |  | 684,000 |
Subordinated Notes (Officer) due on demand, interest at prime (3.25%) plus 2% (5.25%) at December 31, 2015 (see Note 9). |  |  | 577,000 |  |  | 548,000 |
Notes Payable (Affiliates) due 2015, interest at prime (3.25%) plus 0.25% (3.50%) at December 31, 2015 (see Note 12) (Related Party). |  |  | 27,000 |  |  | 29,000 |
Promissory Note with Merrick Company due on demand, interest at 4.25% (Related Party). |  |  | 113,000 |  |  | 109,000 |
Promissory Note with Schwan Leasing due on demand, interest at 4.25% (Related Party). |  |  | 70,000 |  |  | 70,000 |
Notes Payable (Affiliates) due 2021, interest at 11.75% (see Note 12) (Related Party). |  |  | 65,000 |  |  | 85,000 |
Total long-term debt |  |  | 8,852,000 |  |  | 9,161,000 |
Less current portion |  |  | (551,000) |  |  | (376,000) |
Total Long-term debt, net of current portion |  | $ | 8,301,000 |  | $ | 8,785,000 |
On April 29, 2010, the Company entered into a Credit Agreement and associated documents with BMO Harris under which BMO Harris agreed to extend to the Company a credit facility in the aggregate amount of $14,417,000. The facility includes (i) a Revolving Credit providing for maximum advances to the Company, and letters of credit, based upon the level of availability measured by levels of eligible receivables and inventory of the Company of $9,000,000, (ii) an Equipment Loan of up to $2,500,000 providing for loans for the purchase of equipment, (iii) a Mortgage Loan of $2,333,350, and (iv) a Term Loan in the amount of $583,333. The amount the Company can borrow on the Revolving Credit includes 85% of eligible accounts and 60% of eligible inventory up to the maximum amount of the Revolving Credit which was amended to $12,000,000 in July 2012. The Mortgage Loan is amortized over a term of 25 years. The maturity date of the facility was April 30, 2013, which was subsequently extended to July 17, 2017. As of December 31, 2015 the balance outstanding on the Revolving Line of credit with BMO Harris was $10,469,000 and there was $1,456,000 available to borrow. Certain terms of the loan agreement, as amended, include:
| · | Restrictive Covenants: The Loan Agreement includes several restrictive covenants under which we are prohibited from, or restricted in our ability to:
| o | Borrow money;
| o | Pay dividends and make distributions;
| o | Make certain investments;
| o | Use assets as security in other transactions;
| o | Create liens;
| o | Enter into affiliate transactions;
| o | Merge or consolidate; or
| o | Transfer and sell assets.
| · | Financial Covenants: The Loan Agreement includes a series of financial covenants we are required to meet including:
| o | We are required to maintain a tangible net worth (plus Subordinated Debt) in excess of $7,100,000 plus 50% of cumulative net income of the Company after January 1, 2010;
| o | We are required to maintain specified ratios of senior debt to EBITDA on an annual basis and determined quarterly; and,
| o | We are required to maintain a level of adjusted EBITDA to fixed charges on an annual basis determined quarterly of not less than 1.1 to 1. Adjusted EBITDA is EBITDA minus (i) taxes paid, (ii) dividends paid, (iii) payments for the purchase or redemption of stock, and (iv) unfunded capital expenditures.
As of December 31, 2015, the Company was in compliance with these covenants. On July 17, 2012, the Company entered into Amendment Number 3 to the Credit Agreement among the Company and BMO Harris pursuant to which (i) the amount of the loan commitment on the revolver loan of BMO Harris was increased from $9 million to $12 million, (ii) BMO Harris consented to a transaction among the Company and BMO Equity and (iii) the term of credit and loans to the Company provided in the Credit Agreement and BMO Harris was extended to July 17, 2017. Also, on July 17, 2012, the Company entered into a Note and Warrant Purchase Agreement with BMO Private Equity (U.S.) pursuant to which (i) BMO Equity advanced to the Company the sum of $5 million and (ii) the Company issued to BMO Equity a detachable warrant to purchase up to Four Percent (4%) of the outstanding shares of common stock of the Company on a fully-diluted basis (140,048 shares of common stock of the Company) at the price of One Cent ($0.01) per share. An initial value of $703,000 was allocated to the detachable warrant. This value is recorded as a debt discount to the principal amount of the debt and is amortized as additional interest expense based on the effective interest method over the term of the debt. Additional interest expense and acretion of $146,000 and $110,000 was recognized during 2015 and 2014, respectively. The term of the loan provided for in this Agreement is five and a half years. Interest is payable on the outstanding balance of the loan at the rate of 11.5% per annum. The Note and Warrant Purchase Agreement includes provisions for:
| (i) | a closing fee of $100,000
| (ii) | payment of the principal amount in five and a half years with optional prepayment subject to certain prepayment premiums;
| (iii) | security for the note obligations in all assets of the Company junior to the security interest of BMO Harris;
| (iv) | various representations and warranties and covenants of the Company;
| (v) | financial covenants including an applicable senior leverage ratio, fixed charge coverage ratio and tangible net worth amount.
On April 12, 2013, the Company entered into Amendment No. 4 to the Credit Agreement among the Company and BMO Harris Bank N.A. (the “Bank”) (the “Credit Agreement Amendment”) and also entered into Amendment No. 1 to the Note and Warrant Purchase Agreement among the Company and BMO Private Equity (U.S.) (the “NWPA Agreement Amendment”). In the Credit Agreement Amendment, the Bank, and in the NWPA Agreement Amendment, BMO Equity, waives defaults by the Company as of December 31, 2012 and March 31, 2013 with respect to certain financial covenants in the agreement relating to the Senior Leverage Ratio and Total Leverage Ratio. In addition, the levels of these financial covenants for June 30, 2013 and subsequent quarters during the term of the agreements are revised. On December 23, 2014, the Company entered into Amendment No. 5 to the Credit Agreement among the Company and BMO Harris, and Amendment No. 2 to the Note and Warrant Purchase Agreement among the Company and BMO Equity. In the Amendments, BMO Harris and BMO Equity waived certain anticipated events of default as of December 31, 2014 by the Company with respect the amount of capital expenditures and the change of name of a subsidiary, and both the Credit Agreement and the Note and Warrant Purchase Agreement were amended (i) to exclude from the definition of Senior Funded Debt and Total Funded Debt certain indebtedness of a variable interest entity, (ii) to require Registrant to provide financial reports and variance reports to the Bank within 45 days after the end of each calendar month, (iii) to change the Senior Leverage Ratio and Total Leverage Ratio requirements for fiscal quarters ending December 31, 2014 and for each fiscal quarter thereafter to the maturity of the loans, and (iv) to provide for the engagement by the Company of a financial consultant to provide business financial planning and advisory services to the Company. On October 13, 2015, the Company entered into Amendment No. 6 to the Credit Agreement among the Company and BMO Harris. Pursuant to the terms of the Amendment, the company will be able to obtain advances under the revolving line of credit with BMO Harris in the amount provided for in the borrowing base formula plus an overadvance amount of up to $1 million, up to a total maximum amount under the revolving line of credit of $12 million. The provision for the overadvance amount is available to the company for the period from October 1, 2015 to April 30, 2016. Future minimum principal payments for amounts outstanding under these long-term debt agreements for each of the years ended December 31 are:
2016 |  | $ | 551,000 |
2017 |  |  | 1,716,000 |
2018 |  |  | 5,016,000 |
2019 |  |  | 12,000 |
2020 |  |  | 14,000 |
Thereafter |  |  | 1,543,000 |
Total |  | $ | 8,852,000 |

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References No definition available. + Details
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