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Line of Credit and Long Term Debt | 12 Months Ended
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Dec. 31, 2014
Line of Credit and Long Term Debt [Abstract] |
Debt Disclosure [Text Block] |
9. | Line of Credit and Long Term Debt
Commercial Loan Agreement Facility On December 30, 2011, the Company entered into a new Commercial Loan Agreement (collectively referred to as the “Cardinal Loans”) to obtain a $4.0 million term loan (the “$4.0 Million Term Loan”) and to increase the revolving line of credit for net working capital from $5.0 million to $8.0 million. The available amount under the $8,000,000 working capital line of credit facility with Cardinal Bank varies from month to month depending upon the amount of qualified customer accounts receivable which currently consists of up to 90% of qualified United States Federal Government receivables and up to 80% of United States domestic commercial and other non-federal government receivables, less any amounts outstanding on the Cardinal Bank term note. On September 26, 2014, the Company renewed its credit facility with Cardinal Bank and extended the maturity date to October 31, 2015 and modified financial covenants. The credit facility with Cardinal Bank requires the Company to maintain (i) a tangible net worth of at least $4.5 million and (ii) a current ratio of at least 1.1:1.0. As of September 30, 2014, the Company was not in compliance with its tangible net worth financial covenant. The Company placed a full valuation allowance of approximately $3.7 million that caused non-compliance with its tangible net worth financial covenant. The Company previously obtained a waiver from its financial institution as of December 31, 2013 through December 31, 2014 for compliance with such covenant. On October 28, 2014, the Company completed a second public offering of common stock which immediately brought the Company into compliance with its tangible net worth financial covenant. Advances made under the $4.0 Million Term Loan bear interest at 4.5% with monthly principal and interest payments of $74,694 and matures on December 30, 2016. Term loan advances were used to fund a portion of the purchase consideration paid in connection with the AGS business combination that closed on December 31, 2011. The Company was advanced approximately $12.0 million and repaid approximately $12.9 million during the year ended December 31, 2014. There was no outstanding balance on the credit facility at December 31, 2014. Long-Term Debt Long-term debt consisted of the following:
|  | DECEMBER 31, |
|  | 2014 |  | 2013 |
Cardinal Bank mortgage dated December 17, 2010 (1) |  | $ | 468,163 |  | $ | 484,532 |
Cardinal Bank term note dated December 31, 2011 (2) |  |  | 1,710,319 |  |  | 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 |  |  | 3,511,816 |  |  | 3,659,947 |
Less: current portion |  |  | (2,184,016) |  |  | (1,150,455) |
Long-term debt, net of current portion |  | $ | 1,327,800 |  | $ | 2,509,492 |
(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 $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 subordinated 1-year term contingent 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. See Note 4 regarding the determination of fair value of this contingent obligation. Future repayments on long-term debt are as follows for fiscal years ending December 31:
2015 |  | $ | 2,184,016 |
2016 |  |  | 898,256 |
2017 |  |  | 21,114 |
2018 |  |  | 22,416 |
2019 |  |  | 23,798 |
Thereafter |  |  | 362,216 |
Total |  | $ | 3,511,816 |
Capital Lease Obligations The Company has leased certain equipment and automobiles under capital lease arrangements that expire in 2017. 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 year ended December 31, 2014. For the year ended December 31, 2013, the Company did not enter into any capital lease agreements. For the years ended December 31, 2014 and 2013 there were no disposals of equipment leases. For the year ended December 31, 2012 there were disposals of certain expired equipment leases with a gross value and accumulated depreciation of approximately $130,700, respectively. The following sets forth the Company’s future obligations under capital lease agreement for fiscal years ending December 31:
2015 |  | $ | 79,320 |
2016 |  |  | 35,334 |
2017 |  |  | 4,185 |
Total |  |  | 118,839 |
Less portion representing interest |  |  | (5,573) |
Present value of minimum lease payments under capital lease agreements |  |  | 113,266 |
Less current portion |  |  | (76,597) |
Capital lease obligations, net of current portion |  | $ | 36,669 |

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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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