Debt

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

Note 5— Debt

	September 30		December 31
	2013		2012
Term loan	$	2,503,352	$	2,807,298
Obligation for purchase of technology license, net		807,762		-
Obligation for purchase of distributorship, as modified		-		223,645
		3,311,114		3,030,943
Less current maturities		563,659		629,631
Total long-term debt	$	2,747,455	$	2,401,312
Revolving line of credit	$	1,150,000	$	-
Total debt	$	4,461,114	$	3,030,943

Originating in September 2012 with its primary lender, the term loan is for a period of thirty-eight months with interest accruing at a floating interest rate based on the 30-day LIBOR plus 2%. At September 30, 2013, the term loan's interest rate was 2.1821%. Monthly principal and interest are based on approximately a seven-year amortization. The aggregate outstanding balance of principal and interest is due and payable on November 30, 2015.

The Company also has an available $5 million revolving line of credit agreement with its primary lender. During the quarter ended September 30, 2013, the Company borrowed $1,150,000 under its revolver. The revolver's interest rate is a floating interest rate based on the 30-day LIBOR plus 1.85% and interest is payable monthly. At September 30, 2013, the revolver's interest rate was 2.0321%. In September 2013, the term of the Company's revolving line of credit agreement was extended to December 31, 2013 with unpaid borrowings, if any, due at that time.

The term loan agreement and the 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 $11 million, and that borrowings under the agreements shall not exceed EBITDA by a ratio of 2.5 to 1. At September 30, 2013, the Company was in compliance with its loan covenants.

As described further in Note 9 of these consolidated financial statements, in connection with its July 2013 acquisition of a technology license, the Company incurred an obligation of $804,661 (net of original issue discount of $45,339).

The Company's obligation for purchase of a distributorship required monthly payments of principal and interest of $37,500 which ended in June 2013.