Note 11.

Debt

Revolving Credit Facility: The Company has a credit facility with a bank which allows for borrowings of up to $9.5 million. There were no borrowings under this facility at July 31, 2015.

Equipment Line of Credit: Under this credit facility, the Company may borrow up to $1.0 million. There were no borrowings under this facility at July 31, 2015.

Term Loan Facility: The Company has a credit facility with a bank which allows for borrowings of up to $13.0 million with $6.5 million restricted for earn-out payments required under the Sterimedix Acquisition Agreement. The Company borrowed $2.75 million under this facility to fund, in-part, the Sterimedix Acquisition, $2.5 million of which remained outstanding at July 31, 2015. The advances under the term loan are amortized quarterly over five years. Payments in fiscal 2016, 2017, 2018 and 2019 will be $550,000 with the final payment of $275,000 due in 2020.

These facilities bear interest based on either the one-, two- or three-month LIBOR plus 1.75 percent and adjusting each quarter based upon our total debt to earnings before interest, taxes, depreciation and amortization (“EBITDA). As of July 31, 2015, interest under the facilities was 1.93 percent. The unused portion of the facilities is charged at a rate of 0.20 percent. The termination date of the facilities is February 28, 2018. The facilities are collateralized by substantially all of the Company’s assets.

These facilities have two financial covenants: a maximum total debt to EBITDA ratio of 2.25 times and a minimum fixed charge coverage ratio of 1.25 times. The facilities restrict the payment of dividends if, following the distribution, the fixed charge coverage ratio would fall below the required minimum. The Company was in compliance with its covenants as of July 31, 2015.