longs,
very nice change in the Liquidity and Capital Resources section of the new 10k.
Liquidity and Capital Resources
In 2007, our primary sources of capital were proceeds from private placements of our common stock, loans from shareholders and bank lines of credit. We began to experience positive cash flow in the third quarter of 2007, and this trend continued throughout 2008. As a result, we have been able to provide our own operating capital for our operations and reduced the need to access outside capital sources to support current operations.
We currently require approximately $130,000 per month to fund our recurring operations. This amount would likely increase if we expand our sales and marketing efforts and continue to develop new products and services as are our plans. Our cash needs are primarily attributable to funding sales and marketing efforts, strengthening technical and helpdesk support, expanding our development capabilities, and building administrative infrastructure, including costs and professional fees associated with being a public company. We intend to meet our immediate capital needs from cash flow provided from operations. We believe that we have sufficient funding to cover our cash needs for the next 12 months, although there can be no assurance in this regard.
The Company has a $300,000 revolving line of credit with Frost National Bank. The interest rate on the outstanding balance of the revolving line of credit is a floating rate of prime plus 1%, and a payment of all accrued interest is due monthly throughout the term of the line of credit. This revolving line of credit is secured by our accounts receivable. The outstanding principal balance on this line of credit as of September 30, 2008 was $300,000. This line of credit will mature on February 13, 2010.
At December 31, 2008, we also had a $434,355 promissory note with an outstanding balance of $340,718 and payable at a floating rate of interest of prime plus 1%. The note is related to the purchase of Occupational Testing, Inc.
As of September 30, 2008, we also had a $300,000 promissory note with an outstanding balance of $280,000 and payable at an interest rate of 4% per annum and payable on December 31, 2008.
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