Notes Payable

The following table summarizes our notes payable balances as of June 30, 2014 and December 31, 2013:



	June 30, 2014			December 31, 2013
Term note payable - 9.25 percent at June 30, 2014 (prime plus 6 percent), due March 10, 2015.	$	1,972,222		$	2,888,888
Revolving credit line - 4.25 percent at June 30, 2014 (prime plus 1 percent), due March 29, 2015	3,343,275			3,254,745
Total	5,315,497			6,143,633
Less: current portion	(5,315,497		)	(2,548,333		)
Term note payable and revolving credit line - long term portion	$	—		$	3,595,300

On March 1, 2012 we entered into a Business Financing Agreement with Bridge Bank. The agreement provided us with a $5 million term loan and access to a revolving credit line of up to $10 million which we use to help satisfy our working capital needs. We have provided Bridge Bank with a first priority perfected security interest in all of our accounts and personal property as collateral for the credit facility.

Available funds under the revolving credit line are 80% of eligible accounts receivable balances plus $1 million, up to a limit of $10 million. Eligible accounts receivable is generally defined as those from United States based customers that are not more than 90 days from the date of invoice. We had approximately $446,000 available under the revolving credit line as of June 30, 2014.

At December 31, 2013, the Company was not in compliance with certain financial covenants. Bridge Bank provided a waiver of those covenants. As of June 30, 2014, we were in compliance with all Bridge Bank requirements.

During March 2014, the Company entered into the Fourth Business Financing Modification Agreement with Bridge Bank that revised the targets for our financial covenants to a Debt Service Coverage Ratio of at least 1.75 to 1.0 tested on the immediate proceeding three month period beginning May 2014; and an Asset Coverage Ratio of not less than .70 to 1.0 at February 2014, .90 to 1.0 at March and April 2014, 1.00 to 1.0 at May, June, and July 2014, and 1.25 to 1.0 at August 2014 and thereafter. In addition, it requires that there be no negative fluctuation from the submitted forecast greater than twenty percent. The modification accelerates the payment of the remaining balance of the term loan such that it is fully amortized by March 2015 and changed the interest rate of the term loan from prime plus 1% to prime plus 6%. An additional 5% may be incurred during any period that an event of default has occurred or is continuing.