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Line of Credit and Long Term Debt (Tables)
 12 Months Ended
Dec. 31, 2013
Line of Credit and Long Term Debt [Abstract]  
Schedule of Long-term Debt

 

    DECEMBER 31,  
    2013     2012  
             
Cardinal Bank Mortgage Dated December 17, 2010 (1)   $ 484,532     $ 499,938  
Cardinal Bank Term Note Dated December 31, 2011 (2)     2,508,748       3,271,535  
Contingent Obligation Subordinated Seller Financed  Promissory Note Dated December 31, 2011 (3)     -       1,250,000  
Non-Contingent Obligation Subordinated Seller Financed                
 Promissory Note Dated December 31, 2011 (4)     666,667       1,000,000  
                 
Total     3,659,947       6,021,473  
Less: current portion     (1,150,455 )     (1,102,741 )
                 
Long-term debt, net of current portion   $ 2,509,492     $ 4,918,732  

 

(1) On December 17, 2010, the Company entered into a real estate purchase agreement to acquire an operations 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 million 5-year term note with Cardinal Bank 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 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 consolidated balance sheet. AGP floor and ceiling targets were not meet in fiscal 2012 which entitled the Company to reduce the face value of the contingent obligation by $0.9 million to a fair value of $1.25 million. AGS can earn up to $1.5 million in fiscal 2013 with the attainment of AGP of $6,752,000. The Company revised its fourth quarter 2013 forecasted AGP to reflect lower projected revenue growth from slower implementation of recently sold services. The Company believes these factors made it remote that the 2013 AGP target of $6,752,000 would be reached and accordingly revised the fair value of its contingent obligation to a zero at December 31, 2013. This contingent obligation is subordinated to the senior bank financing.

 

(4) On December 31, 2011, the Company entered into a $1 million subordinated 3-year term non-contingent promissory note ("term note" or "non-contingent obligation") with AGS to fund a portion of the purchase price paid in connection with the asset purchase agreement with Avalon Global Solutions, Inc. 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 notes are subordinated to the senior bank financing.

 
Summary of Future Repayments on Long-term Debt

 

2014   $ 1,150,455  
2015     1,186,309  
2016     892,443  
2017     20,187  
2018     21,432  
Thereafter     389,121  
         
Total   $ 3,659,947  

 
Schedule of Future Minimum Lease Payments under Capital Leases

 

2013   $ 51,364  
2014     51,464  
2015     9,243  
2016     -  
Thereafter     -  
         
Total     112,071  
Less portion representing interest     (9,827 )
Present value of minimum lease payments under capital lease agreements     102,244  
Less current portion     (45,125 )
Capital lease obligations, net of current portion   $ 57,119