SHORT-TERM LOANS - Note 9

3 Months Ended

Mar. 31, 2014

Notes to Financial Statements

SHORT-TERM LOANS - Note 9

NOTE 9 - SHORT-TERM LOANS

In 2012, the Company and Portables entered into a line of credit with M&T Bank for $3.0 million. At December 31, 2012 the loan balance which was classified as short term loan, was $2,994,999. The line was collateralized by real property, a certificate of deposit, and guarantees of Portables Unlimited, Inc. (the 49.9% owner of Portables). The interest rate was 1 month LIBOR plus 3.00%. The maturity date of the line of credit is March 26, 2015. In February of 2013, the line of credit was refinanced to a maximum borrowing amount of $2.5 million. At March 31, 2014 and December 31, 2013 the Company accrued an amount due on the line of credit for $2.5 million. On May 20, 2014, the Company was released by M&T Bank as co-borrower for the line of credit. The Company will recognize a gain in the second quarter of 2014 for $2.5 million reflecting the release.

In February of 2013 the Company and Portables jointly entered into a term loan with M&T Bank for $2,500,000 million that matures in February of 2017. The balance of the note fully amortizes via monthly principal and interest payments up through the maturity of the note. The note carries an interest of 1 month LIBOR plus 3.50%. At March 31, 2014, Portables had repaid $638,147 in principal; the outstanding balance of the note was $1,861,853. The Company accounted for the outstanding balance of $1,861,853 with $613,830 as short term, and the remainder of $1,248,023 as long term. On May 20, 2014, the Company was released by M&T Bank as co-borrower for the term note. The Company will recognize a gain in the second quarter of 2014 for $1,861,853 million reflecting the release.