Line of Credit and Long Term Debt (Tables)

6 Months Ended

Jun. 30, 2013

Line of Credit and Long Term Debt [Abstract]

Schedule of Long-term Debt

	JUNE 30,			DECEMBER 31,
	2013			2012
	(Unaudited)
Cardinal Bank Mortgage Dated December 17, 2010 (1)	$	492,311		$	499,938
Cardinal Bank Term Note Dated December 31, 2011 (2)		2,957,436			3,271,535
Contingent Obligation Subordinated Seller Financed
Promissory Note Dated December 31, 2011 (3)		661,000			1,250,000
Non-Contingent Obligation Subordinated Seller Financed
Promissory Note Dated December 31, 2011 (4)		666,667			1,000,000
Total		4,777,414			6,021,473
Less: current portion		(457,485	)		(1,102,741	)
Long-term debt, net of current portion	$	4,319,929		$	4,918,732

(1) 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.

(2) On December 31, 2011, the Company entered into a $4,000,000 5-year term note with Cardinal Bank ("Cardinal Bank Term Note") to fund a portion of the purchase price paid in connection with the asset purchase agreement with Avalon Global Solutions, Inc. ("AGS") 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.

(3) On December 31, 2011, the Company entered into a subordinated 3-year term contingent promissory note ("contingent obligation") with a face value of $3.0 million with AGS to fund a portion of the purchase price paid in connection with the asset purchase agreement dated December 30, 2011. The Company carries this contingent obligation at fair value on the condensed consolidated balance sheet at June 30, 2013 and December 31, 2012 at approximately $661,000 and $1,250,000, respectively. See Note 3 for additional discussion about changes in fair value. The contingent obligation bears interest at 3.0%, with a fair value of estimated contingent annual principal payments of approximately $330,500 and $330,500 in 2014 and 2015, respectively, and matures on April 15, 2015. This contingent obligation is subordinated to the Cardinal Bank Term Note.

(4) On December 31, 2011, the Company entered into a $1.0 million subordinated 3-year term non-contingent note ("term note") with AGS to fund a portion of the purchase price paid in connection with the asset purchase agreement with AGS dated December 30, 2011. The term note bears interest at 3.0% with estimated remaining annual principal payments of $333,333 and $333,334 payable on April 15, 2014 and 2015, respectively, and matures on April 15, 2015. The Company paid the first installment due on April 15, 2013. The term note is subordinated to the Cardinal Bank Term Note.

Summary of Future Repayments on Long-term Debt

2013	$	457,485
2014		1,479,090
2015		1,516,810
2016		893,773
2017		20,187
Thereafter		410,069
Total	$	4,777,414

Schedule of Future Minimum Lease Payments for Capital Leases

2013	$	26,283
2014		51,464
2015		51,364
2016		8,561
Thereafter		-
Total		137,672
Less portion representing interest		(13,586	)
Present value of minimum lease payments
under capital lease agreements		124,086
Less current portion		(22,440	)
Capital lease obligations, net of current portion	$	101,646