Revolving Lines of Credit and Related Interest

6 Months Ended

Jun. 30, 2012

Line of Credit Facility [Abstract]

Revolving Lines of Credit and Related Interest

Note 7 - Revolving Lines of Credit and Related Interest

On June 17, 2012, the Company extended a $1.0 million revolving line of credit with a lender, with interest due monthly at the rate equal to prime plus 1.25% with a floor of 7.0% for one month, which was originally entered into on June 17, 2011. The line of credit was collateralized by the Company’s accounts receivable, inventory, contract rights and general intangibles. The Company’s line of credit agreement contains certain restrictive covenants including the prohibition of the payment of distributions to members or stockholders other than for the payment of income taxes and certain affirmative covenants including maintenance of certain financial ratios related to its financial performance as defined in the line of credit agreement. For the quarter ended December 31, 2011, the Company failed to meet its Minimum Net Income Covenant. A waiver from the lender was obtained. At December 31, 2011 advances of $786,771 were outstanding under the credit agreement. The lender bank had not set a requirement for the Minimum Net Income Covenant for 1st or 2nd quarter. At June 30, 2012 advances of $859,244 were outstanding under the credit agreement. This revolving line of credit has subsequently been paid in full with proceeds from a new credit agreement and all liens released (see Note10 – Subsequent Events).