Note 4 – Notes Payable Related to Acquisitions

Omaha Note Payable

In order to finance a portion of the purchase price for the Omaha facility, on June 5, 2014 the Company entered into a Term Loan and Security Agreement with Capital One, National Association (the “Lender”) to borrower $15.06 million (the “Loan”). The Loan bears interest at 4.91% per annum and all unpaid interest and principal is due on June 5, 2017 (the “Maturity Date”). Interest is paid in arrears and payments began on August 1, 2014, and are due on the first day of each calendar month thereafter. Principal payments begin on January 1, 2015 and are due on the first day of each calendar month thereafter based on an amortization schedule with the principal balance due on the Maturity Date. Interest expense on the loan was $252,644 for the four months ended December 31, 2014. The Loan may not be prepaid in whole or in part prior to June 5, 2016, thereafter, the Company, at its option, may prepay the Loan at any time, in whole (but not in part) on at least 30 calendar days’, but not more than 60 calendar days’, advance written notice. The prepayment amount will be equal to the outstanding principal balance of the Loan, any accrued and unpaid interest and all other fees, expenses and obligations including an Early Termination Fee of $301,200.  At closing the Company paid the Lender a non-refundable commitment fee of $150,600, which is included in total deferred financing costs of $335,986 that were capitalized during the twelve months ended August 31, 2014, as part of this financing.  Refer to the “Deferred Financing Costs” section below for additional details. 

                As of December 31, 2014, scheduled principal payments due each subsequent year listed below are as follows:

Asheville Note Payable

In order to finance a portion of the purchase price of the Asheville facility, on September 15, 2014 the Company entered into a Promissory Note with the Bank of North Carolina to borrow $1.7 million.  The note bears interest on the outstanding principal balance at the simple, fixed interest rate of 4.75% per annum and all unpaid principal and interest is due on February 15, 2017.  Commencing on October 15, 2014, the Company will make on the 15^th of each calendar month until and including March 15, 2015, monthly payments consisting of interest only.  Thereafter, commencing on April 15, 2015, the outstanding principal and accrued interest shall be payable in monthly amortizing payments of $10,986 each on the 15^th day of each calendar month, until and including January 15, 2017.  Interest expense on the note was $20,188 for the four months ended December 31, 2014.  This note may be prepaid in part or in full at any time and no prepayment penalty will be assessed with respect to any amounts prepaid.  At closing, the Company paid a loan origination fee of $17,000, which is included in total deferred financing costs of $21,577 that were capitalized during the four months ended December 31, 2014, as part of this financing.  Refer to the “Deferred Financing Costs” section below for additional details. 

                As of December 31, 2014, scheduled principal payments due each subsequent year listed below are as follows:

Deferred Financing Costs

During the four months ended December 31, 2014, the Company recorded $21,577 in deferred financing costs related to the Asheville loan.  During the twelve months ended August 31, 2014, the Company recorded $335,986 in deferred financing costs related to the Omaha loan.  Accumulated amortization as of December 31, 2014 and August 31, 2014 was $65,872 and $26,443, respectively.  Accordingly, net deferred financing costs on the accompanying Balance Sheets as of December 31, 2014 and August 31, 2014 were $291,691 and $309,543, respectively.  Amortization expense related to the deferred financing costs for the four months ended December 31, 2014 and twelve months ended August 31, 2014 were $39,429 and 26,443, respectively, and are included in the “Interest Expense” line item in the accompanying Statements of Operations.