Debt

9 Months Ended

Sep. 30, 2011

Debt

Revolving Credit Facility

On January 2, 2008, the Company entered into a Commercial Loan Agreement with Cardinal Bank relating to a $5,000,000 revolving credit facility, which agreement was subsequently amended. Advances under the revolving credit facility will bear interest at a variable rate equal to the Wall Street Journal prime rate plus 0.5% with an interest rate floor of 3.75%. The Company is required to maintain certain financial covenants quarterly. As of September 30, 2011, there was no borrowing on the revolving credit facility and the Company was in full compliance with these financial covenants.

On October 5, 2011, the Company entered into a Debt Modification Agreement with Cardinal Bank to extend the repayment date of the Company’s revolving credit facility with Cardinal Bank from October 1, 2011 to December 31, 2012 and to reduce the interest rate floor to 3.75% from 5.5%.

Short and Long Term Debt

On January 2, 2008, the Company entered into a $2 million four-year term note with Cardinal Bank to fund the unpaid portion of the iSYS purchase price. As amended, the term note bears interest at an annual rate of 7.5% with monthly principal and interest payments of approximately $48,000, and matures on January 1, 2012. The term note is secured under a corporate security agreement. At September 30, 2011, the Company owed approximately $194,000 in short-term debt and no long-term debt associated with the four-year term note, which represents the final amounts due under the agreement.

On December 17, 2010, the Company entered into a real estate purchase agreement to acquire iSYS’s telecommunications operations and call center facility in Columbus, Ohio for approximately $677,000. In connection with such real estate purchase agreement, the Company entered into a $528,000 ten-year mortgage with Cardinal Bank to fund the unpaid portion of the purchase price. The mortgage loan bears interest at an annual rate of 6.0% with monthly principal and interest payments of approximately $3,800, and matures on December 17, 2020. The mortgage loan principal and interest payments are based on a twenty-year amortization period with the final installment payment due on the maturity date. At September 30, 2011, the Company owed approximately $519,000 under this mortgage loan with approximately $16,000 in short-term debt and the remainder in long-term debt. The mortgage loan is secured by the real estate purchased pursuant to the real estate purchase agreement.