Note 7 - Short-term and long-term debt

Elements of short-term and long-term debt are as follows:

December 31,	2011			2010
(in thousands)
Short-term & long-term debt
Short-term debt:
- Bank credit line	$	2,843		$	1,373
- Long-term debt: current		3,518			3,639
Subtotal		6,361			5,012
Long-term debt:
- Bank credit line		2,500			3,500
- Building and land mortgage		903			972
- Vehicle and equipment loans		114			113
- Capital lease obligations		122			72
- Less: current maturities		(3,518	)		(3,639	)
Subtotal		121			1,018
Total short-term & long-term debt	$	6,482		$	6,030

Bank Credit Line

On April 17, 2008, Hudson amended its credit facility with Keltic Financial Partners, LLP (“Keltic”) and secured participation from Bridge Healthcare Financial, LLC (“Bridge”) to provide for borrowings up to $15,000,000 (the “Facility”). On September 23, 2009, Keltic advised the Company that it has assumed all of Bridge’s rights under the Facility. The Facility consists of a revolving line of credit and two term loans, which expires on June 26, 2012. Advances under the revolving line of credit are limited to (i) 85% of eligible trade accounts receivable and (ii) 55% of eligible inventory. Advances available to Hudson under the A and B term loans may not exceed $2,500,000 and $4,500,000, respectively. At December 31, 2011, the Facility bore interest at 6.5%. Substantially all of Hudson's assets are pledged as collateral for its obligations under the Facility. In addition, among other things, the agreement restricts Hudson's ability to declare or pay any cash dividends on its capital stock. As of December 31, 2011, Hudson had in the aggregate $2,843,000 of borrowings outstanding and $7,052,000 available for borrowing under the revolving line of credit. In addition, as of December 31, 2011, the Company had $2,500,000 of borrowings outstanding under the A and B term loans and all such amounts are included as current debt due to the Facility’s expiration date in June 2012. The Company is seeking to renew and possibly increase its existing Facility but there can be no assurance that the Company will be successful.

In connection with the April 2008 amendment to the Facility, the Company issued 100,000 five-year common stock purchase warrants exercisable at $1.88 per share. The Company utilizes the Black-Scholes pricing model to compute the fair value of the 100,000 stock purchase warrants. The fair value of the warrants was $74,000 and is being amortized over the life of the Facility. As of December 31, 2011 the warrants are fully amortized.

Building Mortgage

In May 2005, the Company purchased its Champaign, Illinois facility for a total purchase price of $999,999. The Company financed the purchase with a loan in the amount of $945,000, with payments based upon a 15 year amortization and with a balloon payment of $636,000 due on June 1, 2012. The note bears interest at 7% for the first five years and then adjusts annually based on prime plus 2%. As of December 31, 2011 and 2010, the Company has approximately $650,000 and $705,000, respectively, outstanding under the loan.

Land Mortgage

In April 2008, the Company purchased five acres of vacant land adjacent to its Champaign, Illinois facility for $300,000. The Company financed the purchase with a loan in the amount of $300,000 with payments based upon a 15 year amortization and with a balloon payment of $248,000 due on June 1, 2012. The note bears an interest rate at 6.7% and as of December 31, 2011, $253,000 is outstanding.

Vehicle and Equipment Loans

The Company had entered into various vehicle and equipment loans. These loans are payable in 60 monthly payments through October 2016 and bear interest from 4.9% to 8.7%.

Scheduled maturities of the Company's long-term debt and capital lease obligations are as follows:

Years ended December 31,	Amount
(in thousands)
-2012	$	3,518
-2013		61
-2014		38
-2015		13
-2016		9
Total	$	3,639

Capital Lease Obligations

The Company rents certain equipment with a net book value of approximately $171,000 at December 31, 2011 under leases, which have been classified as capital leases. Scheduled future minimum lease payments under capital leases net of interest are as follows

Years ended December 31,	Amount
(in thousands)
-2012	$	94
-2013		31
-2014		5
		130
Less Interest expense		(8	)
Total	$	122