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Debt

9 Months Ended

Sep. 30, 2012

Note 9 — Debt

Long-term notes payable consists of the following:

	September 30, 2012		December 31, 2011
Note payable to bank, with interest at 3.46%, payable in monthly principal installments of $72,917 plus interest through March 28, 2016, collateralized by all the assets of the Company except the Dansensor stock.	$	3,135,415	$	—

Seller financed note payable (Seller Note), with interest at 3.46%, payable in semi-annual principal and interest payments totaling $844,000 beginning October 2, 2012 through April 2, 2015, collateralized by 65% of the outstanding shares of Dansensor.	4,195,067		—
Total long-term notes payable	$	7,330,482	$	—
Less current portion of long-term notes payable	2,457,497		—
Total long-term notes payable	$	4,872,985	$	—

The Company has a $5,000,000 secured revolving line of credit with a final maturity date of March 28, 2016. Interest is charged monthly at one-month LIBOR plus 1.75 basis points which totaled 2.00% at September 30, 2012. The line of credit is secured by the assets of the Company with the exception of the Dansensor stock. The Company had $4,500,000 outstanding on the line of credit at September 30, 2012. Additionally, Dansensor has an available line of credit totaling DKK 10,000,000 or $1,724,000, less any outstanding borrowings, at September 30, 2012. Outstanding borrowings are charged interest at 3.85% per year. Approximately $41,500 was outstanding as of September 30, 2012.

The Company is subject to various financial and restrictive covenants in the bank Credit Agreement, including maintaining certain financial ratios and limits on incurring additional indebtedness, making capital and lease expenditures and making share repurchases.

On June 28, 2012, the Company entered into the first amendment to the Seller Note (the Amendment). The Amendment called for two prepayments of DKK 6,500,000 (approximately $1.1 million) each, which were paid on June 29, 2012 and July 30, 2012. As a result of the prepayments, the maturity date of the Seller Note was revised to April 2, 2015 and the collateral securing the repayment of the Seller Note was changed from 100% to 65% of the common shares of Dansensor.

The carrying value of the Seller Note is adjusted for foreign currency translation at each reporting period and the change in value is included in other income (expense) in the condensed consolidated statements of operations.

As of September 30, 2012, the future minimum principal payments of the long-term notes payable for the remainder of fiscal 2012 and for each fiscal year thereafter is as follows:

2012	$	992,022
2013	2,507,448
2014	2,564,419
2015	974,941
2016	291,652
Total	$	7,330,482

- 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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