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7. Notes Payable to Bank

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

7. Notes Payable to Bank

During 2012, the Company negotiated a new credit facility increasing the Company’s lines of credit by $202,000. As part of this agreement, the Company has pledged two $101,000 certificates of deposit as collateral. The increased loan facility allows us access to borrowings at an interest rate of 5.0% for the portion of the credit line used. At June 30, 2014, we had drawn $100,000 which was reported as notes payable to bank.

At June 30, 2014 and December 31, 2013, the Company had the following notes payable to the bank:

		June 30,				December 31,
		2014				2013

Promissory note payable to First Security Bank of Missoula, bearing interest at 5.0%, maturing February 27, 2016, payable on demand, collateralized by a lien on Certificate of Deposit number 48614		$	1			$	70,952

Promissory note payable to First Security Bank of Missoula, bearing interest at 5.0%, maturing February 27, 2016, payable on demand, collateralized by a lien on Certificate of Deposit number 48615			99,999				67,568

Total notes payable to bank		$	100,000			$	138,520

These notes are personally guaranteed by John C. Lawrence the Company’s President and Chairman of the Board of Directors.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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