Line of Credit and Long Term Debt

3 Months Ended

Mar. 31, 2012

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

6.    Line of Credit and Long Term Debt

Commercial Loan Agreement Facility

The Company has an $8.0 million working capital line of credit facility with Cardinal Bank. There were no changes in the terms under the credit facility during the three months ended March 31, 2012. The Company was advanced $1.9 million during the three months ended March 31, 2012 and repaid such advances during the same period. There was no outstanding balance on the credit facility at March 31, 2012.

Long-Term Debt

Long-term debt consisted of the following:

	MARCH 31,			DECEMBER 31,
	2012			2011
	(Unaudited)
Cardinal Bank Term Note Dated January 2, 2008 (1)	$	-		$	50,909
Cardinal Bank Mortgage Dated December 17, 2010 (2)		511,981			515,553
Cardinal Bank Term Note Dated December 31, 2011 (3)		3,821,801			4,001,000
Seller Financed Subordinated Notes Dated
December 31, 2011 (4)		4,000,000			4,000,000
Total		8,333,782			8,567,462
Less: current portion		(756,151	)		(798,319	)
Long-term debt, net of current portion	$	7,577,631		$	7,769,143

(1) 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. The term note bears interest at 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. This term note was repaid on January 1, 2012.

(2) On December 17, 2010, the Company entered into a real estate purchase agreement to acquire iSYS’s call center facility in Columbus, Ohio for approximately $677,000. In connection with the 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 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 with the unpaid balance due at maturity. The mortgage loan is secured by the real estate.

(3) On December 31, 2011, the Company entered into a $4 million 5-year term note with Cardinal Bank to fund a portion of the purchase price paid in connection with the asset purchase agreement with Avalon Global Solutions, Inc. dated December 30, 2011. The term note bears interest at 4.50% with monthly principal and interest payments of approximately $74,694, and matures on December 30, 2016. The term note is secured under a corporate security agreement.

(4) On December 31, 2011, the Company entered into a $1 million and $3 million subordinated 3-year term note with Avalon Global Solutions, Inc. to fund a portion of the purchase price paid in connection with the asset purchase agreement with Avalon Global Solutions, Inc. dated December 30, 2011. Under the terms of the asset purchase agreement, $3 million of this subordinated note is subject to certain claw-back provisions. The term note bears interest at 3.0% with annual principal and interest payments of $1,488,183, $1,413,333 and $1,373,333 in 2013, 2014 and 2015, respectively, and matures on April 15, 2015. The term notes are subordinated to the senior bank financing.

Future repayments on long-term debt are as follows for fiscal years ending December 31:

2012	$	756,151
2013		2,112,544
2014		2,148,591
2015		2,186,309
2016		1,130,187
Total	$	8,333,782