Quarterly report pursuant to sections 13 or 15(d)

NOTE 6 - LINE OF CREDIT AND TERM LOAN

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NOTE 6 - LINE OF CREDIT AND TERM LOAN
9 Months Ended
Sep. 30, 2013
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
NOTE 6 – LINE OF CREDIT AND TERM LOAN

Line of Credit

In October 2011 the Company negotiated a line of credit from a bank. On August 1, 2013, the Company negotiated a new line of credit and term loan from the bank. The term for the line of credit is two years and expires on July 31, 2015. The agreement included a borrowing base calculation tied to accounts receivable with a maximum availability of $750,000 at prime plus 1.75% interest (currently 5%).  The line is collateralized by substantially all of the assets of the Company and is guaranteed by the Company’s Chief Executive Officer, Mr. Meller.  The credit facility requires the Company to pay a monitoring fee of $1,000 a month. At September 30, 2013, the Company was in compliance with the required financial covenants, the fixed charge ratio and debt to net worth. As of September 30, 2013, the availability under this line was $750,000. 

Term Loan

The Company borrowed $350,000 in July 2013 from a bank. The term of the loan is for two years and expires on July 31, 2015. Monthly payments are at $15,776 including interest at 8%. The term loan is collateralized by substantially all of the assets of the Company and is guaranteed by the Company’s Chief Executive Officer, Mr. Meller.  At September 30, 2013 the outstanding balance was $320,750.