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7. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS
6 Months Ended
Jun. 30, 2013
Debt Disclosure [Abstract]  
NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

Notes Payable

 

In May 2013, the Company entered into a financing agreement with a lender under which the Company may borrow up to $500,000 to purchase certain equipment. In August 2013, the maximum amount the Company may borrow was increased to $1,000,000. The Company may borrow amounts in tranches as needed. Each tranche bears interest at 8.32% and is payable in 36 equal monthly installments. The lender has a first security interest in the equipment purchased with the funds borrowed under the agreement. As of June 30, 2013, the Company borrowed approximately $128,000, which is recorded in other current liabilities and other liabilities on the accompanying consolidated balance sheet. As of June 30, 2013, $128,000 remained outstanding.

 

In July 2011, the Company entered into an equipment financing agreement with a bank in the amount of $123,000, which is recorded in other current liabilities and other liabilities in the accompanying consolidated balance sheet. The amounts borrowed were used to finance certain equipment purchases and other services related to the relocation of the Company’s Carlsbad, California office. The amount borrowed bears interest at 5.85% and is collateralized by a first priority security interest in the equipment purchased. The amount borrowed is payable over a 36 month period in equal payments of $3,705, which includes interest, until fully paid in August 2014. As of June 30, 2013, approximately $50,000 remained outstanding.

 

Capital Lease Obligations

 

The Company has capital lease obligations, one of which is a $1,000,000 equipment lease facility entered into with an equipment leasing company in October 2009. The terms of this agreement allowed for use of the facility for 24 months and for use of the facility in multiple tranches with each individual tranche having a 24 month term. As of June 30, 2013, the Company had utilized $743,000 of this facility, which has been accounted for as a capital lease. As of June 30, 2013, $17,000 remained outstanding for those tranches that have not yet expired under this facility. Pursuant to the terms of the agreements related to this facility, the Company has given the equipment leasing company notice of its intent to terminate each individual lease that was reaching the 24 month term as well as its intent to purchase the equipment under the expiring lease at fair market value.