Debt

9 Months Ended

Sep. 30, 2013

Debt [Text Block]

Note 8 – Debt

		September 30,		December 31,
		2013		2012
Credit Facility	$	1,541	$	10, 883
Counsel Loan		3,649		—
Total debt	$	5,190	$	10,883

At September 30, 2013 and December 31, 2012, all of the Company’s outstanding debt was current. At September 30, 2013 it consisted of a revolving credit facility (the “Credit Facility”), which had a balance of $1,541, and debt payable to a related party (the “Counsel Loan”), which had a balance of $3,649. At December 31, 2012, the only outstanding debt was the $10,883 balance of the Credit Facility.

The Credit Facility is provided to HG LLC by a U.S. bank under the terms and provisions of a certain Loan and Security Agreement (the “Loan Agreement”) dated as of June 2, 2009 and most recently amended as of September 27, 2012 (the “Amendment Date”). It is utilized to finance the acquisition of eligible property and equipment for purposes of resale. The Credit Facility bears interest at the greater of prime rate + 1.0%, or 4.5%, and the maximum borrowing available under the Credit Facility is US $15,000, subject to HG LLC maintaining a 1:2 ratio of capital funds, i.e. the sum of HG LLC’s tangible net worth plus subordinated indebtedness, as defined in the Loan Agreement, to the outstanding balance. The amount of any advance is determined based upon the value of the eligible assets being acquired, which serve as collateral. At September 30, 2013, $6,964 of such assets served as collateral for the loan (December 31, 2012 - $13,392). A monthly fee is payable with respect to unused borrowing (“Unused Line Fee”). The Unused Line Fee is equal to the product of 0.50% per annum multiplied by the difference between $15,000 and the average loan amount outstanding during the month. Effective the Amendment Date, an annual facility fee (“Facility Fee”) of $75 was payable to the lender. Subsequent payments of $50 will be due on each anniversary of the Amendment Date. The Credit Facility also contains other terms and provisions customary for agreements of this nature, and has been guaranteed by both the Company and Counsel. At September 30, 2013 and December 31, 2012 the Company was in compliance with all covenants of the Credit Facility.

The Counsel Loan outstanding at September 30, 2013 consisted of net advances received by the Company from Counsel under an existing loan facility, and accrued interest payable of $91. The Counsel Loan, which was originally entered into during the fourth quarter of 2003, accrues interest at 10% per annum compounded quarterly from the date funds are advanced, and is due on demand. Any outstanding balance under the Counsel Loan is secured by the assets of the Company. At December 31, 2012, the balance of the Counsel Loan was zero due to the Company having a net receivable of $2,929 from Counsel. For further discussion of transactions with Counsel, see Note 11.