NOTE 3 FINANCING AGREEMENTS

We have a credit agreement with WFB which was most recently amended on February 22, 2016 and provides for a line of credit arrangement of $15.0 million that expires, if not renewed, on May 31, 2018. The credit arrangement also has a $1.8 million real estate term note outstanding with a maturity date of March 31, 2027, an additional $1.7 million real estate term note outstanding that is due, if not renewed, on December 31, 2027, an equipment loan for $2.7 million and a term loan facility of up to $1.0 million for capital expenditures, both with maturity dates of May 31, 2018. As of December 31, 2015, we have borrowed $218,000 against the $1.0 million capital term note.

Under the credit agreement, both the line of credit and real estate term notes are subject to variations in the LIBOR rate. Our line of credit bears interest at three-month LIBOR + 2.25% (approximately 2.7% at December 31, 2015) while our real estate term notes bear interest at three-month LIBOR + 2.75% (approximately 3.2% at December 31, 2015). The weighted-average interest rate on our line of credit was 2.8% for the twelve months ended December 31, 2015 and December 31, 2014. We had borrowing on our line of credit of $7,691,237 and $7,998,184 outstanding as of December 31, 2015 and December 31, 2014, respectively. The line of credit requires a lock box arrangement; however there are no acceleration clauses that would accelerate the maturity of our outstanding borrowings.

As part of the July 1, 2015 Devicix acquisition we entered into two unsecured subordinated promissory notes payable to the seller in the principal amounts of $1.0 million and $1.3 million. The $1.0 million promissory note has a four-year term, bearing interest at 4% per annum, requiring monthly principal and interest payments of $22,579 and is subject to offsets if certain revenue levels are not met. The $1.3 million promissory note has a four year term and bears interest at 4% per annum, requiring monthly principal and interest payments of $29,353 and is not subject to offset.

Our credit agreement requires us to maintain a fixed charge coverage ratio of not less than 1.20 to 1.00 for the trailing twelve month period ending December 31, 2015 and 1.15 to 1.00 for each period thereafter. We believe our performance will be sufficient to comply with this covenant going forward.

The credit agreement contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by annual shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures.

The availability under the line is subject to borrowing base requirements, and advances are at the discretion of the lender. At December 31, 2015, we have net unused availability under our line of credit of approximately $6.1 million. The line is secured by substantially all of our assets.

A summary of long-term debt balances at December 31, 2015 and 2014 is as follows:

Description	2015			2014
Term notes payable—Wells Fargo Bank, N.A.
Real estate term notes bearing interest at three month LIBOR + 2.75% maturing March 31, 2027, and December 31, 2027 with combined monthly payments of approximately $19,000 plus interest, secured by substantially all assets.	$	2,645,495		$	2,875,560
Equipment notes bearing interest at three month LIBOR + 2.75% maturing May 2018 with a combined monthly payments of approximately $46,000 plus interest, secured by substantially all assets		2,633,740			1,569,781
Industrial revenue bond payable to the City of Blue Earth, Minnesota which bears a variable interest rate (approx. 0.24% at December 31, 2014), and has a maturity date of June 1, 2021, with principal of $80,000 payable annually on June 1		280,000			360,000
Devicix Acquistion Note 1 payable to DeLange Holdings bears interest rate of 4.0% per annum, maturing July 1, 2019		903,128			—
Devicix Acquistion Note 2 payable to DeLange Holdings bears interest rate of 4.0% per annum, maturing July 1, 2019		1,174,066			—

		7,636,429			4,805,341

Discount on Devicix Notes Payable		(142,072	)		—
Debt issuance Costs		(44,175	)		—

Total long-term debt		7,450,182			4,805,341
Current maturities of long-term debt		(1,495,513	)		(732,835	)

Long-term debt—net of current maturities	$	5,954,669		$	4,072,506

Future maturity requirements for long-term debt outstanding as of December 31, 2015, are as follows:

Years Ending December 31,	Amount
2016	$	1,495,513
2017		1,521,580
2018		2,265,317
2019		628,791
2020		230,067
Future		1,495,161

	$	7,636,429