DEBT AND CREDIT AGREEMENTS

3 Months Ended

Mar. 31, 2015

NOTE 7 — DEBT AND CREDIT AGREEMENTS

The Company’s outstanding debt balances as of March 31, 2015 and December 31, 2014 consisted of the following:


	March 31,		December 31,
	2015		2014
Line of credit	$	1,238	$	—
Term loans and notes payable		2,676		2,918
Less: Current portion		(1,302)		(268)
Long-term debt, net of current maturities	$	2,612	$	2,650

Credit Facilities

AloStar Credit Facility

The Credit Facility is a secured three‑year asset-based revolving credit facility, pursuant to which AloStar will advance funds when requested against a borrowing base consisting of approximately 85% of the face value of eligible accounts receivable of the Company and approximately 50% of the book value of eligible inventory of the Company. Borrowings under the Credit Facility bear interest at a per annum rate equal to the one month London Interbank Offered Rate plus a margin of 4.25%, with a minimum interest rate of 5.25% per annum. The Company must also pay an unused facility fee to AloStar equal to 0.50% per annum on the unused portion of the Credit Facility along with other standard fees.

The Loan and Security Agreement dated August 23, 2012 establishing the Credit Facility (the “Loan Agreement”) contains customary representations and warranties. It also contains a requirement that the Company, on a consolidated basis, maintain a minimum monthly fixed charge coverage ratio and minimum monthly earnings before interest, taxes, depreciation, amortization, restructuring and share based payments (“Adjusted EBITDA”), along with other customary restrictive covenants, certain of which are subject to materiality thresholds, baskets and customary exceptions and qualifications.

The obligations under the Loan Agreement are secured by, subject to certain exclusions, (i) a first priority security interest in all of the accounts receivable, inventory, chattel paper, payment intangibles, cash and cash equivalents and other working capital assets and stock or other equity interests in the Subsidiaries, and (ii) a first priority security interest in all of Brad Foote’s equipment.

The Company is in discussions to put in place a new credit facility in anticipation of the scheduled expiration of the Credit Facility on August 23, 2015. As of March 31, 2015, there was $1,238 in outstanding indebtedness under the Credit Facility, the Company had the ability to borrow up to $15,733 thereunder and the per annum interest rate was 5.25%. AloStar and the Company executed a Sixth Amendment to the Loan Agreement on March 27, 2015 to amend the financial covenant terms, and the Company was in compliance with all applicable covenants under the Loan Agreement as of March 31, 2015.

Other

Included in Long Term Debt, Net of Current Maturities is $2,600 associated with the New Markets Tax Credit transaction described further in Note 15, “New Markets Tax Credit Transaction” of these condensed consolidated financial statements. Additionally, the Company has approximately $77 of other term loans outstanding.

- Definition

The entire disclosure for 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.

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