Long-Term Debt

12 Months Ended

Mar. 31, 2012

Long-Term Debt

Long-Term Debt

Note 6 Long-Term Debt

Long-term debt consists of the following as of March 31, 2012 and 2011 as follows:

	2012			2011
	(in thousands)
Term loans	$	634		$	757
Less current maturities	(234		)	(204		)
Long-term debt, excluding current maturities	$	400		$	553

Term Loan Agreements

In February 2008, the Company executed a Term Loan Agreement with a lender providing for $1.1 million in aggregate credit facilities, secured by the Company’s assets. The Term Loan has a maturity date of March 1, 2015 and is payable in 84 equal monthly principal payments plus interest. The interest rate under the Term Loan, in the absence of a default under the agreement, is the prime rate in effect as of the close of business on the first day of each calendar quarter, plus 1%. As of March 31, 2012 the prime rate was 3.25%. The balance under this loan was $506,000 and $660,000 at March 31, 2012 and 2011, respectively. The Company is prohibited from declaring any common stock dividends without the lender’s prior written consent. The credit agreement requires the Company to meet certain financial covenants. The Company was in compliance with these financial covenants at March 31, 2012 and 2011.

The Company has four equipment loans with John Deere credit providing for $132,000 in equipment financing; three of these loans are payable in 48 equal monthly principle payments and one is payable in 36 equal monthly principle payments.  At March 31, 2012 the total outstanding combined balance was approximately $76,000. The equipment loans have maturity dates of December 2012 as to $8,000, March 2013 as to $7,000, May 2015 as to $34,000 and November 2015 as to $27,000. The loans are at a 0% rate of interest and are net of imputed interest of $2,000.  Amortization of discount for the year ended March 31, 2012 was $1,500.  At March 31, 2011 the total outstanding combined balance was approximately $32,000.

In September 2011, the Company executed a Term Loan Agreement with Nissan Motor Acceptance Corporation providing for $23,000 in equipment financing, secured by the equipment. The Term Loan has a maturity date of September 13, 2016 and is payable in 60 equal monthly principal payments. The interest rate under this Term Loan is 0%. Imputed interest at a rate of 2% (cash discount offered by seller) has been recorded and is being amortized as interest over the term of the loan. The face value of the term loan is reported in the balance sheets at $20,000, less the unamortized discount of $900 at March 31, 2012.

Capital Lease

In March 2010, the Company executed a capital lease agreement with Thermo Fisher Financial providing for $97,000 in equipment, secured by the equipment financed. The capital lease has a maturity date of March 2013 and is payable in 36 equal monthly payments. The interest rate under this capital lease is 6.6%. The balance under this lease was $34,000 and $67,000 at March 31, 2012 and 2011, respectively.

Future principal payments under the loan agreements and capital lease as of March 31, 2012 are as follows: 

Year ending March 31	(in thousands)
2013	$	234
2014	190
2015	197
2016	11
2017	2
Total principal payments	$	634