Annual report pursuant to Section 13 and 15(d)

LONG-TERM DEBT AND NOTES PAYABLE

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LONG-TERM DEBT AND NOTES PAYABLE
 12 Months Ended
Dec. 31, 2013
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]
8.
LONG-TERM DEBT AND NOTES PAYABLE
 
Long-term debt and notes payable are summarized as follows.
 
 
 
December 31,
 
December 31,
 
 
 
2013
 
2012
 
 
 
 
 
 
 
 
 
Note payable to a bank due in monthly installments of $4,406 including interest at Wall Street Journal Prime + 1% (minimum of 5.5%); remaining balance due October 10, 2018; collateralized by substantially all of the Company's assets and guaranteed by an officer of the Company
 
$
218,119
 
$
236,110
 
 
 
 
 
 
 
 
 
Line of credit to a bank, expires April 10, 2014, interest rate of Wall Street Journal Prime (currently 3.25%) plus 1%, floor rate of 5%
 
 
472,000
 
 
-
 
 
 
 
 
 
 
 
 
Note payable to a bank, matures August 5, 2014, interest rate of Wall St. Journal Prim (currently 3.25%) plus 1%
 
 
38,614
 
 
-
 
 
 
 
 
 
 
 
 
Loan agreement with an outside company on December 23, 2013, interest at 1% per month, accrued interest and principal due February 23, 2014, unsecured
 
 
150,000
 
 
-
 
 
 
 
878,733
 
 
236,110
 
Current portion of long-term debt
 
 
700,168
 
 
236,110
 
Long-term debt, less current portion
 
$
178,565
 
$
-
 
 
On April 11, 2013, the Company and Paragon Commercial Bank (“Paragon”) entered into a credit agreement (the “Credit Agreement”). The Credit Agreement provides for an additional $500,000 revolving credit facility with a one (1) year term from the Closing Date. This increases the Company’s obligation to Paragon to a total of approximately $718,119 at December 31 2013, which includes a prior note payable’s current outstanding balance of $218,119 and a revolving credit facility balance of $472,000 at December 31, 2013. The Credit Agreement is available to be drawn at the Company’s discretion to finance investments in new business ventures and for the Company’s general corporate working capital requirements in the ordinary course of business. The note payable originally matured on August 10, 2013 and on November 4, 2013 the note was extended to October 10, 2018 with monthly principal and interest payments of $4,406, whereas the new credit facility expires on April 10, 2014.
 
Borrowings under the Credit Agreement bear monthly interest at the greater of: (i) floor rate of 5.00% or (ii) the Wall Street Journal’s prime plus rate (currently 3.25%) plus 1.00%. All unpaid principal and interest are due one (1) year after the Closing Date. Any borrowings are secured by a lien on all of the Company’s assets. The obligations under the Credit Agreement are guaranteed by Mike Pruitt, the Company’s Chief Executive Officer.
 
ARB entered into a term note with TD Bank in 2008 for $300,000, which has a balance of $38,614 at December 31, 2013 and has a maturity date of August 4, 2014 The interest rate is 1.75% above the Wall Street Journal prime rate (3.25%), and the monthly principal and interest payments is $4,836, subject to adjustment by TD Bank, except for the last payment which shall be the unpaid balance at maturity The term note is personally guaranteed by two former shareholders of ARB and TD Bank has a first lien on all ARB’s assets.
 
On December 23, 2013, the Company entered into a loan agreement with an outside company for $150,000, due on February 23, 2014. Interest is compounded monthly at a rate of 1%. As of February 23, 2014, the Company was not in compliance with the terms of this note due to non-payment of principal and interest on March 21, 2014, the Company paid the note holder $25,000 of principal and $4751 of accrued interest. However, the note holders have not issued to the Company a formal notice of default.