DEFERRED GRANTS

The Company received grants for certain facility improvements and equipment from state and local agencies in which the Company operates. These grants reimburse the Company for a portion of the actual cost or provide in kind services in support of capital projects. Deferred grants of $0.7 million and $0.2 million were recorded during the years ended September 30, 2014 and 2013, respectively.

One of the Company’s grants is a loan to grant agreement. The Company has signed a promissory note, which will be forgiven if certain employment targets are obtained at specified future dates. If the employment targets are not obtained, the Company is obligated to repay the loan with interest. As the Company intends to comply with these agreements, the Company has recorded the funds received as a deferred amount within other long-term liabilities on the balance sheet.

The Company received a government grant for the purchase of equipment upgrades to accommodate existing and anticipated business growth. Required employment targets for this grant have been met as of September 30, 2014.

The Company is also the recipient of matching grants from two local governmental agencies related to certain renovations for one of its operating locations. One agency is contributing in kind services and property of $0.1 million while the other is contributing cash of $0.1 million to match expenditures by the Company of at least the same amount.

The grants are amortized over the useful lives of the related fixed assets when there is reasonable assurance that the Company will meet the employment targets.

Grant amortization expense during the three months ended and years ended September 30, 2014 and 2013 follows:



	Three Months Ended				Years Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
(in thousands)
Grant amortization expense	$	144	$	17	$	158	$	17