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Note 8 - Debt

6 Months Ended

Jun. 30, 2014

Note 8 – Debt

Notes payable consists of the following:

	June 30, 2014		December 31, 2013
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.	$	1,604,158	$	2,041,660

Seller financed note payable (Seller Note), with interest at 3.46%, payable in semi-annual payments of principal and interest totaling $891,000 beginning October 2, 2012 through April 2, 2015, collateralized by 65% of the outstanding stock of Dansensor.		1,010,416		1,914,941

Capital leases		40,342		47,926
Total notes payable	$	2,654,916	$	4,004,527
Less current portion of notes payable		1,892,812		2,697,678
Total long-term notes payable	$	762,104	$	1,306,849

In the U.S., the Company has a $6.0 million secured revolving line of credit with a maturity date of March 28, 2016. Interest is charged monthly at one-month LIBOR plus 1.75 basis points which totaled 2.00% at June 30, 2014 and December 31, 2013. The line of credit is secured by the assets of the Company with the exception of the Dansensor stock, and there was $4,625,000 outstanding at June 30, 2014. In Denmark, the Company has a DKK 10,000,000 (approximately $1.83 million) available line of credit of which DKK 1,222,691 (approximately $223,752) was outstanding as of June 30, 2014. Outstanding borrowings on this line of credit are charged interest at 4.35% per year.

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. As of June 30, 2014, the Company was in compliance with these various covenants and expects to remain in compliance throughout 2014.

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 expense in the condensed consolidated statements of income.

As of June 30, 2014, the future minimum principal payments of the notes payable for the remainder of 2014 and each of the four succeeding fiscal years and thereafter are as follows:

2014	$	1,349,228
2015		996,577
2016		306,135
2017		2,976
	$	2,654,916

- 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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