NSYS » Topics » NOTE 4 NOTES PAYABLE

This excerpt taken from the NSYS 10-K filed Mar 9, 2006.

NOTE 4   NOTES PAYABLE

We have a revolving line of credit of $8,000,000 at Wells Fargo Bank, N.A., (WFB) along with five term notes.  Effective March 4, 2005, the line of credit was extended to January 31, 2007.  These agreements are secured by substantially all of our assets and require us to maintain certain covenants, which include certain regular reporting requirements, annual shareholder dividend limitations, the maintenance of certain financial ratios, and limit the amount of annual capital expenditures.

The line of credit bears interest at prime (7.25 percent at December 31, 2005). The weighted-average interest rate on our line of credit was 6.20% and 4.34% for the years ended December 31, 2005 and 2004, respectively. We had borrowings of $4,228,234 and $7,523,058 outstanding as of December 31, 2005 and 2004, respectively.

A summary of other debt balances at December 31, 2005 and 2004 is as follows:

Description

 

 

 

2005

 

2004

 

Notes payable—Wells Fargo Bank Minnesota, N.A., Two notes bear interest at Wells Fargo prime rate, three notes bear interest at 4.21%, 6.30%, and 7.00%, respectively; combined monthly payments of $98,387, including principal and interest; maturities range from October 2006 to July 2008; secured by substantially all assets

 

$

3,338,028

 

$

3,677,177

 

Notes payable—Other, interest at 6.5%; monthly installment payments through March 2007; secured by substantially all assets

 

498,606

 

527,878

 

Note payable paid off in 2005

 

 

31,954

 

Other promissory note(1)

 

84,898

 

160,016

 

Total notes payable

 

3,921,532

 

4,397,025

 

Current maturities of notes payable

 

(1,207,305

)

(997,815

)

Notes payable—

 

 

 

 

 

Net of current maturities

 

$

2,714,227

 

$

3,399,210

 


(1)          In June 2004, we purchased, in exchange for a note payable of $250,000, the business assets of Zachariah & Lundbergh, Inc. (Z&L) a manufacturer of camera power supplies and cable assemblies used in machine vision systems for the industrial, medical/scientific and security markets.  The assets purchased were comprised primarily of inventories with an estimated fair value of $170,000.  We paid

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NORTECH SYSTEMS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2005, 2004, AND 2003

"NOTE 4 NOTES PAYABLE" elsewhere:

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