Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

5. Commitments and Contingencies

Loan Financing Arrangements:

On February 9, 2011, the Company entered into an Equipment Finance Agreement with U.S. Bancorp Business Equipment Finance Group.  Pursuant to the agreement, the Company obtained a $39 secured loan for a 48-month term that had an annual fixed interest rate of 13%.  The loan was secured by the related leased equipment. Under the agreement, the Company made monthly payments consisting of $1 of principal plus any accrued interest.  The agreement provided for customary events of default.  This loan was personally guaranteed by a Company director and a principal stockholder of the Company. As of September 30, 2014, the Company has retired this facility. At December 31, 2013, the Company had outstanding borrowings of $13.

On May 27, 2011, the Company entered into an Equipment Finance Agreement with U.S. Bancorp Business Equipment Finance Group.  Pursuant to the Agreement, the Company obtained a $109 secured loan for a 60-month term that had an annual fixed interest rate of 6%. The loan was secured by the related leased equipment. Under the Agreement, the Company made monthly payments consisting of $2 of principal plus any accrued interest.  The Agreement provided for customary events of default.  This loan was personally guaranteed by a Company director and a principal stockholder of the Company. As of September 30, 2014, the Company has retired this facility. At December 31, 2013, the Company had outstanding borrowings of $57.

At various dates in 2011, the Company entered into Lease Agreements with Lease Corporation of America.  Pursuant to these agreements, the Company obtained an aggregate amount of $66 for a 60-month term that had variable annual interest rates of approximately 14%.  The leases were secured by the related leased equipment. Under the agreements, the Company made monthly payments of approximately $1 of principal plus any accrued interest.  The agreements provided for customary events of default.  The leases were personally guaranteed by a principal stockholder of the Company. As of September 30, 2014, the Company has retired this facility. At December 31, 2013, the Company had outstanding borrowings of $42.

On June 17, 2011, the Company entered into a loan agreement with First Republic Bank.  Pursuant to the loan agreement, the Company obtained a $150 secured loan for a 60-month term that had a variable interest rate based on First Republic’s Prime plus a spread of 1.75% p.a. and a floor of 3.25% p.a.  The initial interest rate was 5% p.a.  Under the loan agreement, the Company made monthly payments consisting of $3 of principal plus any accrued interest. The loan agreement provided for customary events of default.  This loan was personally guaranteed by a principal stockholder of the Company. As of September 30, 2014, the Company has retired this loan agreement. At December 31, 2013, the Company had outstanding borrowings of $75.

On September 13, 2011, the Company entered into an additional loan agreement with First Republic Bank.  Pursuant to the loan agreement, the Company obtained a $150 loan for a 60-month term that had a variable annual interest rate based on First Republic’s Prime plus a spread of 1.75% and a floor of 3.25%.  The initial interest rate was 5%.  Under the loan agreement, the Company made monthly payments consisting of $3 of principal plus any accrued interest.  The loan agreement provided for customary events of default.  This loan was personally guaranteed by a principal stockholder of the Company. As of September 30, 2014, the Company has retired this loan agreement. At December 31, 2013, the Company had outstanding borrowings of $83.

On September 30, 2014, the Company entered into a revolving line of credit with First Republic Bank. Pursuant to the line of credit agreement, the Company may borrow up to $2,000 for a 12-month term that has a variable annual interest rate based on First Republic’s Prime less a spread of 2.0% p.a. The initial interest rate is 1.25% p.a. Under the line of credit agreement, the Company will make monthly payments consisting of $2 of interest, and an annual payment consisting of $2,002 principal plus any accrued interest. The line of credit agreement provides for customary events of default. This line of credit is secured by a collateral cash account in the Company’s name at First Republic. As of September 30, 2014, the Company was in compliance with the material terms of this facility. At September 30, 2014, the Company had outstanding borrowings of $113. Subsequent to the close of the quarter, the Company drew down on the remaining balance of this facility.