Debt

Revolving line of credit

On July 30, 2014, we entered into a credit agreement with Wells Fargo Bank, National Association, or Wells Fargo, providing for a $5.0 million revolving line of credit, which we refer to as our credit agreement. Our obligation to repay advances under the credit agreement is evidenced by a revolving line of credit note, which we refer to as our credit note, with a fluctuating interest rate per annum 1.75% above daily one month LIBOR, as in effect from time to time. The credit note matures on June 1, 2016, and all borrowings under the credit agreement are due and payable on that date. The obligations under the credit agreement and credit note are secured by all the assets of the Company and its subsidiaries. The credit agreement includes ordinary and customary covenants related to, among other things, additional debt, further encumbrances, sales of assets, and investments and lending.

Borrowings under the Credit Agreement are also secured by guarantees provided by certain officers and directors of the Company and two stockholders of the Company who are not officers or directors. On July 30, 2014, we issued to the guarantors warrants to purchase an aggregate of 800,000 shares of our common stock at $3.15 per share in consideration of their guaranteeing such indebtedness. The warrants vested immediately and are exercisable any time prior to their expiration on October 30, 2019. See Note 4 - Warrants.

As of September 30, 2014, we had outstanding borrowings of $2.8 million under our credit agreement, which were recorded as a long-term liability on our consolidated balance sheet as of September 30, 2014. All borrowings were used to finance acquisition activity. The weighted-average interest rate on these borrowings was 1.90%. As of September 30, 2014, we were in compliance with all debt covenants.

Notes Payable

In connection with our acquisition activities during the nine months ended September 30, 2014, our subsidiaries executed and delivered promissory notes to partially finance the transactions. The majority of the promissory notes mature within two years of the respective acquisition dates and provide for the accrual of simple interest at a fixed rate of 5% per annum. One of the promissory notes associated with the Bay Walk-In acquisition was adjusted at closing as a result of the seller entity's working capital levels. Another promissory note associated with the Bay Walk-In acquisition is non-interest bearing and is paid in 30 equal monthly installments. Therefore, the Company has imputed interest by discounting the promissory note with a fixed interest rate of five percent 5% per annum. As payments are made, the principal portion and interest expense are recognized using the interest method. The adjustments on these promissory notes of approximately $41,900 have been treated as a reduction in the consideration paid. See Note 2 - Acquisitions.

The following is a summary of the promissory notes issued in connection with the acquisition activities during the nine months ended September 30, 2014 (in thousands):



	Issue Date	Original Principal Amount		Interest Rate per Annum	Maturity Date
CorrectMed	May 8, 2014	$	500	5%	May 7, 2015
Bay Walk-In	August 29, 2014	177		5%	August 28, 2016
Bay Walk-In	August 29, 2014	200		5%	August 28, 2016
Bay Walk-In (discounted at 5%)	August 29, 2014	281		none	March 1, 2017
Mid-South	September 12, 2014	150		5%	September 11, 2016

The following is a summary of all debt as of September 30, 2014:



(In thousands)
Revolving line of credit	$	2,834
Promissory notes	1,300
Note payable ⁽¹⁾	426
Less current maturities	(927		)
Long-term debt	$	3,633

⁽¹⁾Repayments remaining total $426,000 and is scheduled to be repaid in monthly installments through October 2021. The note is unsecured and interest is at a fixed interest rate of 4.34% per annum, and monthly payments increase 5% every year.

Outstanding debt balances as of September 30, 2014 mature as follows: 2014 - $71,000; 2015 - $929,000; 2016 - $3,217,000; 2017 - $75,000; Thereafter - $268,000