Note 6. Debt Facilities

Senior Credit Facility

We have a loan and security agreement, which we refer to as our senior credit facility, with Silicon Valley Bank. The senior credit facility provides for (1) a $10.5 million aggregate principal amount of outstanding term borrowings, (2) revolver borrowings up to the lesser of $15.0 million and a borrowing base tied to the amount of our eligible accounts receivable and inventory, (3) a $5.0 million sublimit under the revolver for the issuance of standby letters of credit and (4) a $2.0 million equipment term-loan facility.

Interest on term borrowings accrues at a floating rate equal to the lender’s prime rate plus 2.25% during a one year interest-only period and at a floating rate equal to the lender’s prime rate plus 1.75% after expiration of the interest-only period (5.75% at September 30, 2016). Beginning in September 2017, we must begin paying 36 equal monthly installments of principal, plus accrued and unpaid interest. All outstanding principal and accrued and unpaid interest on the term borrowings is due and payable in May 2020. We may at our option prepay the outstanding term loan balance by paying the lender all principal and accrued and unpaid interest, plus a prepayment fee equal to $210,000 if the term-loan is prepaid on or prior to the first anniversary of the May 2016 amendment, and $105,000 if the term loan is prepaid after the first anniversary but on or prior to the second anniversary of the May 2016 amendment. At September 30, 2016, we had $10.5 million of term loan borrowings outstanding.

Interest on revolver borrowings is payable monthly and accrues at a floating rate equal to the lender’s prime rate plus 2.25% at all times when our cash held at the bank plus the amount available to borrow on the revolver is less than or equal to $8.5 million, and 1.75% when our cash held at the bank plus the amount available to borrow on the revolver is greater than $8.5 million for a period of at least 60 consecutive days (5.25% at September 30, 2016). The maturity date of the revolver is December 2017. At September 30, 2016, we had no revolver borrowings outstanding.

Equipment loans are available for borrowing for one year following the May 2016 amendment date and mature in May 2020. Equipment loans are repaid in 36 equal monthly installments of principal, plus accrued and unpaid interest, following each borrowing and accrue interest at a floating rate equal to the lender’s prime rate plus 1.75% (5.25% at September 30, 2016). We may at our option prepay the outstanding equipment loan balance by paying the lender all outstanding principal and accrued and unpaid interest plus a prepayment fee equal to 2.00% of the principal amount of each equipment loan prepaid if such equipment loan is prepaid on or prior to the first anniversary of the date such equipment loan was borrowed, and 1.00% of the principal amount of each equipment loan prepaid if such equipment loan is prepaid after the first anniversary of the date such equipment loan was borrowed. At September 30, 2016, we had $1.1 million equipment loan borrowings outstanding.

At September 30, 2016, $11.6 million of term loan, revolver and equipment loan borrowings were outstanding, excluding unamortized debt issuance costs of $172,000. The weighted average interest rate on these facilities was 5.7% at September 30, 2016. Scheduled principal maturities as of September 30, 2016 were as follows (in thousands):

2016	$	90
2017		2,402
2018		3,861
2019		3,770
2020		1,459
	$	11,582

The senior credit facility contains customary conditions to borrowing and affirmative and negative covenants, including covenants that restrict our and our subsidiaries’ ability to, among other things, dispose of assets, have a change of control, merge with or acquire other entities, incur indebtedness, grant liens on our assets, make distributions to holders of our capital stock, make investments or engage in transactions with our affiliates. The senior credit facility also requires us to maintain a minimum tangible net worth and liquidity ratio. We were in compliance with all covenants under our senior credit facility as of December 31, 2015 and September 30, 2016. Substantially all of our assets other than intellectual property are pledged as collateral under the senior credit facility.

Mezzanine Credit Facility

We had a mezzanine loan and security agreement, which we referred to as our mezzanine credit facility, with SG Enterprises II, LLC, which provided for a $5.0 million term loan which was drawn in September 2015. Interest on the term loan accrued at a fixed per-year rate equal to 18.0% and was payable monthly. On July 26, 2016, we repaid without premium or penalty the principal and accrued interest on the $5.0 million term loan pursuant to the mezzanine credit facility and wrote-off unamortized debt discounts and issuance costs of $109,000.