NOTE 10. DEBT

The following table summarizes current and long-term portions of debt as of December 31, 2015 and 2014 (in thousands):

	2015		2014
Corporate segment:
Senior revolving loan	$	1,617	$	-
Senior term note, net		1,407		-
Subordinated notes, net, maturing in May 2018, principal $6.2 million		6,310		-
Subordinated notes, net, due in July 2016, principal $0.2 million		205		4,978
Other		116		157
		9,655		5,135
Brazil segment:
Capital expansion loans		2,067		3,629
Working capital lines of credit		828		2,408
Advances on customer export orders		1,310		1,810
Special tax programs		2,064		3,016
Other		34		98
		6,303		10,961
Total debt		15,958		16,096
Current portion		5,050		4,808
Long-term portion	$	10,908	$	11,288

Required future minimum payments on our debt as of December 31, 2015, follow (in thousands).

	Corporate Segment			Brazil Segment		Total
2016	$	2,339		$	2,751	$	5,090
2017		1,821			637		2,458
2018		6,607			555		7,162
2019		-			493		493
2020		-			416		416
Thereafter		-			1,451		1,451
		10,767			6,303		17,070
Debt issuance costs		(1,112	)		-		(1,112	)
Total debt	$	9,655		$	6,303	$	15,958

Corporate Segment

Senior Revolving Loan and Term Note

In May 2015, we entered into an $8 million senior secured credit facility agreement with a lender (the Lender) consisting of a $3.5 million revolving loan, not to exceed a borrowing base, as defined in the agreement, and an initial $2.5 million term loan, which term loan may be increased at the Lender’s discretion by up to $2.0 million within 2 years. The funds will be used for general corporate purposes and to provide working capital to facilitate future growth. The facility is secured by a senior interest in substantially all of our assets, excluding half of our interest in Nutra SA and RBT PRO, LLC. The credit facility matures on June 1, 2018, with the potential for two one-year maturity extensions. The loan bears interest at a variable interest rate based on LIBOR, with a 0.75% floor and 1.25% cap, plus 10.75% per annum, (11.5% at December 31, 2015) and we will pay certain fees under the agreement. Interest on the term loan is payable quarterly and principal payments of $0.1 million are payable quarterly beginning in October 2016 until the $1.4 million remainder is payable at maturity. We issued a warrant to purchase 300,000 shares of common stock (exercise price of $5.25, May 2020 expiration) to the Lender. As of December 31, 2015, the fair value of the warrant is $0.3 million. As of December 31, 2015, the remaining unamortized discount on the term note is $0.6 million. As of December 31, 2015, the remaining unamortized debt issuance costs related to the term note was $0.5 million. We accrete the term note up to its face value at an effective interest rate of 27.5% per year, 30.5% including amortization of debt issuance costs.

The May 2015 agreement with the Lender included certain financial and non-financial covenants such as a requirement that we maintain $2.0 million of total liquidity at all times which is defined as $1.0 million in cash on hand and $1.0 million of available borrowings. In February 2016, we entered into an agreement with the Lender which modified the financial convents to require that (a) from February 1, 2016 to July 15, 2016, we maintain cash on hand, including availability under our revolving loan with the Lender, of not less than $1.5 million provided that at least $0.8 million of such amount must be in the form of cash on hand, and (b) we maintain an average monthly adjusted EBITDA, as defined by the agreement, calculated over each consecutive three-month period beginning on January 1, February 1, March 1, April 1 and May 1, 2016, of not less than $0.1 million. The Lender also waived, for the first two quarters of 2016, any non-compliance with the financial covenants in the May 2015 agreement. The amendment with the Lender requires that we repay $1.0 million of the senior term note which occurred on March 24, 2016. In consideration for the amendments, we paid and expensed $0.1 million to the Lender in 2016.

Subordinated Notes

In May 2015, the terms of subordinated notes in the principal amount of $6.3 million were amended to extend the maturity dates from July 2016 to May 2018 and change the interest rate from 5% per year to an annual interest rate of a rate determined as a function of LIBOR (as defined in the amendment) plus 11% (currently 11.75%) (the Note Amendment). Interest is payable quarterly. Principal is payable in seven quarterly installments of $0.3 million beginning in October 2016, with the remainder of principal due in May 2018. The holders of these notes received warrants to acquire 289,670 shares of common stock in the aggregate (exercise price of $5.25, May 2020 expiration). We accounted for the amendment as an extinguishment and reissuance. We recognized a $1.9 million loss on extinguishment equal to the total of (i) the difference between the $5.1 million carrying value of the notes on the date of the transaction and the $6.3 million face value of the notes and (ii) the $0.7 million fair value of the warrants at issuance. These notes are secured by a subordinated interest in substantially all of our assets, excluding our interest in Nutra SA and RBT PRO, LLC.

The terms of subordinate notes in the principal amount of $0.2 million were not modified in May 2015. These notes bear an interest rate of 5% per year, payable quarterly, and mature in July 2016. We accrete these notes up to their face value at an effective interest rate of 24.5%. As of December 31, 2015, the remaining unamortized debt discount related to these notes was less than $0.1 million. These notes are secured by a subordinated interest in substantially all of our assets, excluding our interest in Nutra SA and RBT PRO, LLC.

Brazil Segment

All Brazil segment debt is denominated in the Brazilian Real (R$), except advances on customer export orders which are denominated in U.S. Dollars.

Capital Expansion Loans

In December 2011, Irgovel entered into loan agreements with the Bank of Brazil. As of December 31, 2015, the remaining notes held a principal balance of R$8.2 million. The annual interest rate on the loans is 6.5%, payable quarterly and the loans mature December 2021. Irgovel must make monthly principal payments under each of the loans. In July 2012, Irgovel entered into an agreement with the bank under which it borrowed R$1.7 million at an annual interest rate of 5.5%. Interest is payable quarterly on the amounts outstanding and the maturity date of the loans is July 2019. Irgovel must make monthly principal payments under the loans. The capital expansion loans are secured by the related equipment.

Working Capital Lines of Credit

Irgovel has working capital lines of credit secured by accounts receivable. The total amount of borrowing cannot exceed 40%-100% of the collateral, depending on the agreement. The annual interest rates on this debt range from 8.4% to 135.6%, and average 31.5%. Principal maturities of amounts outstanding extend through September 2017.

Advances on Customer Export Orders

Irgovel obtains advances against certain customer export orders from various banks. The annual interest rates on these advances range from 5.5% to 13.0%, and average 9.9%. Principal maturities of amounts outstanding extend through June 2016.

Special Tax Programs

Irgovel has an unsecured note payable for Brazilian federal and social security taxes under special Brazilian government tax programs. Principal and interest payments are due monthly through January 2029. Interest on the notes is payable monthly at the Brazilian SELIC target rate, which was 14.3% at December 31, 2015.

Provisions and Covenants

As of December 31, 2015, we are in compliance with the provisions and covenants associated with our debt agreements, as modified and discussed above.