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BANK DEBT
 12 Months Ended
Dec. 31, 2012
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
6. BANK DEBT

 

During the third quarter of 2010, we agreed to terms of certain credit facilities with TD Bank, N.A. aggregating up to approximately $2,100,000, which are secured by substantially all of our assets. These credit facilities are comprised of a $1,000,000 ten-year mortgage loan, a $600,000 fifty-four month note and a $500,000 line of credit, which is renewable annually. Proceeds from the $1,000,000 mortgage were received during the third quarter of 2010. Based on a 15-year amortization schedule, a balloon principal payment of $451,885 will be due in the third quarter of 2020. We hedged our interest rate exposure on this mortgage loan with an interest rate swap agreement that effectively converted a floating interest rate to the fixed rate of 6.04%. All derivatives are recognized on the balance sheet at their fair value. The agreement has been determined to be highly effective in hedging the variability of the identified cash flows and has been designated as a cash flow hedge of the variability in the hedged interest payments. Changes in the fair value of the interest rate swap agreement are recorded in other comprehensive (loss) income, net of taxes. The original notional amount of the interest rate swap agreement of $1,000,000 amortizes in accordance with the amortization of the mortgage. As the result of our decision to hedge this interest rate risk, we recorded other comprehensive (loss) income, net of taxes, in the amount of ($9,308), ($50,443) and $9,631 during the years ended December 31, 2012, 2011 and 2010, respectively, which reflects the change in fair value of the interest rate swap (liability) asset, net of taxes. The fair value of the interest rate swap has been determined using observable market-based inputs or unobservable inputs that are corroborated by market data. Accordingly, the interest rate swap is classified as level 2 within the fair value hierarchy provided in Codification Topic 820, Fair Value Measurements and Disclosures. Proceeds from the $600,000 note were received during the first quarter of 2011. Interest on the note is variable at the higher of 4.25% per annum or the one month London Interbank Offered Rate (LIBOR) plus 3.25% per annum. The $500,000 line of credit is available as needed and has been extended through May 31, 2013 and is renewable annually thereafter. Interest on any borrowings against the line of credit will be variable at the higher of 4.25% per annum or the one month LIBOR plus 3.5% per annum. These credit facilities are subject to certain financial covenants. Principal payments due under debt outstanding as of December 31, 2012 are reflected in the following table by the year that payments are due:

 

Period   $1,000,000 mortgage     $600,000 note     Total  
Twelve months ending December 31, 2013   $ 47,908     $ 133,583     $ 181,491  
Twelve months ending December 31, 2014     50,900       139,490       190,390  
Twelve months ending December 31, 2015     54,044       96,213       150,257  
Twelve months ending December 31, 2016     57,384       —       57,384  
Twelve months ending December 31, 2017     61,056       —       61,056  
After December 31, 2017     627,481       —       627,481  
Total   $ 898,773     $ 369,286     $ 1,268,059