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Line of Credit and Long Term Debt | 6 Months Ended
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Jun. 30, 2014
Line of Credit and Long Term Debt [Abstract] |
Debt Disclosure [Text Block] |
8. | Line of Credit and Long Term Debt
Commercial Loan Agreement Facility The Company has an $8,000,000 working capital line of credit facility with Cardinal Bank. The amount available varies from month to month depending upon the amount of qualified customer accounts receivable which currently consists of up to 90% of qualified federal receivables and up to 80% of qualified commercial receivables, less any amounts outstanding on the Cardinal Bank term note. The line of credit facility was extended on June 27, 2014 by Cardinal Bank to September 30, 2014 to permit the Company time to incorporate its recent acquisition of SCL on May 1, 2014. The Company was advanced approximately $4.3 million and repaid approximately $5.2 million during the six month period ended June 30, 2014. There was no outstanding balance on the credit facility at June 30, 2014. Long-Term Debt Long-term debt consisted of the following:
|  | JUNE 30, |  | DECEMBER 31, |
|  | 2014 |  | 2013 |
|  | (Unaudited) |
Cardinal Bank mortgage dated December 17, 2010 (1) |  | $ | 476,432 |  | $ | 484,532 |
Cardinal Bank term note dated December 31, 2011 (2) |  |  | 2,113,920 |  |  | 2,508,748 |
Non-contingent subordinated unsecured promissory note dated December 31, 2011 (3) |  |  | 333,334 |  |  | 666,667 |
Contingent subordinated unsecured loan note payable dated May 1, 2014 (4) |  |  | 1,000,000 |  |  | - |
Total |  |  | 3,923,686 |  |  | 3,659,947 |
Less: current portion |  |  | (2,164,185) |  |  | (1,150,455) |
Long-term debt, net of current portion |  | $ | 1,759,501 |  | $ | 2,509,492 |
(1) On December 17, 2010, the Company entered into a real estate purchase agreement to acquire an operations and call 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 $4.0 million 5-year term note with Cardinal Bank (“Cardinal Bank Term Note”) to fund a portion of the purchase price paid in connection with the asset purchase agreement with Avalon Global Solutions, Inc. (“AGS”) dated December 30, 2011. The term note bears interest at 4.5% 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 $1.0 million subordinated 3-year term non-contingent note (“term note”) with AGS 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 3.0% with estimated remaining annual principal payments of $333,334 payable on April 15, 2015. The note matures on April 15, 2015. The Company paid the second installment due on April 15, 2014. The term note is subordinated to the Cardinal Bank Term Note. (4) On May 1, 2014, the Company entered into a $1.0 million 1-year term contingent subordinated unsecured loan note with SCL to fund a portion of the purchase price paid in connection with the Share Sale and Purchase Agreement with SHL dated May 1, 2014. The term note bears interest at 3.0% with an estimated lump-sum principal payment of $1.0 million payable on May 1, 2015. The term note is subordinated to the Cardinal Bank Term Note. Financial Covenant Compliance The credit facility with Cardinal Bank requires the Company to maintain certain financial covenants, including maintaining (i) a debt service ratio of at least 1.2:1.0, (ii) a tangible net worth of at least $4.5 million and (iii) a current ratio of at least 1.1:1.0. On March 3, 2014, the Company completed a public offering of common stock which immediately brought the Company into compliance with its tangible net worth and current ratio financial covenants. As of June 30, 2014, the Company was not in compliance with its debt service ratio. The Company previously obtained a waiver from its financial institution as of December 31, 2013 through December 31, 2014 for compliance with such covenants. The Company is in the process of renewing its credit facility with Cardinal Bank and believes that it is more likely than not that the credit facility will be renewed and covenant compliance matters remediated. The Company believes the presentation of its debt obligations as long term remains appropriate at June 30, 2014. Capital Lease Obligations The Company has leased certain equipment under capital lease arrangements which expire in 2016. Except for the assumption of certain capital lease arrangements in connection with the acquisition of SCL, there were no changes to existing lease arrangements during the three or six month periods ended June 30, 2014.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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