Long-Term Debt

12 Months Ended

Dec. 31, 2011

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

5. Long-Term Debt

Long-term debt at December 31, 2011 and 2010 consists of the following:

	2011		2010
Term loan	$	3,204,100	$	3,594,908
Obligation for purchase of distributorship		946,948		1,122,735
		4,151,048		4,717,643
Less current maturities		584,873		566,873
	$	3,566,175	$	4,150,770

Principal maturities of long-term debt at December 31, 2011, are as follows:

2012	$	584,873
2013		2,998,242
2014		204,171
2015		214,617
2016		149,145
Thereafter		-
	$	4,151,048

Revolving loan agreements

Effective October 1, 2009, upon expiration of a previous revolving loan agreement with the same lender, the Company entered into a new $5 million one-year revolving loan agreement (2009) with its primary lender. Upon expiration of the 2009 agreement, the Company entered into a new $5 million revolving loan agreement (2010) with its primary lender. The 2010 agreement expired September 2011.

Effective September 30, 2011, the Company entered into a new one-year $5 million revolving loan agreement (2011) with its primary lender. Similar to the previous agreements, any advances under the revolver accrue interest at a variable interest rate based on 30-day LIBOR + 1.85%. Interest, if any, is payable monthly. There have been no revolver borrowings in 2010 or 2011. At December 31, 2011, the outstanding revolving line of credit balance was zero.

Term Loan

In June 2009, the Company entered into a term loan agreement with its primary lender for $4.12 million and used all of the proceeds to reduce its revolving line of credit balance. The term loan was a for a period of two years with interest accruing at a floating interest rate based on the 30-day LIBOR plus 3%, subject to a 3.75% floor. Monthly principal and interest were based on a ten-year amortization. As originally structured, the aggregate outstanding balance of principal and interest was due and payable on June 29, 2011.

On November 30, 2010, the Company re-financed its term loan agreement with its primary lender. The re-financed term loan is a for a period of three years with interest accruing at a floating interest rate based on the 30-day LIBOR plus 2%. As of December 31, 2011, the term loan’s interest rate was 2.30%. Monthly principal and interest are based on approximately a nine-year amortization. The aggregate outstanding balance of principal and interest is due and payable on November 30, 2013.

The term loan agreement and 2011 revolving line of credit agreement are secured by all tangible and intangible assets of the Company and also by a mortgage on the real estate of the Company’s headquarters. These agreements also include loan covenants requiring the Company to maintain net tangible worth of not less than $10 million, and that borrowings under the agreements shall not exceed EBITDA by a ratio of 2.5:1. At December 31, 2011, the Company was in compliance with its loan covenants.

Obligation for Purchase of Distributorship

As described in Note 13, on August 31, 2009, the Company incurred a long-term obligation of $1,343,881 relating to the purchase of a Reliv distributorship. The Company will pay this obligation in monthly payments of principal and interest totaling $18,994 over a seven-year term with an annual interest rate of 5%.