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7. NOTES PAYABLE
 3 Months Ended
Mar. 31, 2014
Debt Disclosure [Abstract]  
NOTES PAYABLE

(7) 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, and in December 2013, the maximum amount the Company may borrow was further increased to $3,000,000. The Company may borrow amounts in tranches as needed. Each tranche bears interest at 8.32% per annum and is payable in 36 equal monthly installments. The Company granted the lender a first security interest in the equipment purchased with the funds borrowed under the agreement. Through March 31, 2014, the Company borrowed approximately $2,371,000. As of March 31, 2014, $1,900,000 remained outstanding, which reflects payments made through March 31, 2014.

 

In July 2011, the Company entered into an equipment financing agreement with a bank in the amount of $123,000, which is recorded in short-term and long-term notes payable on 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% per annum 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 March 31, 2014, approximately $18,000 remained outstanding.