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Short-term Debt
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9 Months Ended |
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Jun. 30, 2013
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| Short-term Debt [Abstract] | |
| Short-term Debt |
6. Short-term Debt
The Company entered into a two-year, $4,500,000 account purchase agreement ("AR Credit Facility") with Wells Fargo Bank N.A. ("Wells Fargo") which has been subsequently amended. The AR Credit Facility as amended, provides for borrowings, on a revolving basis, of up to 85% of the Company's eligible accounts receivable less than 90 days old and bears interest at a rate equal to the three month LIBOR (minimum of 0.5%) plus 5.25% (effective rate was 5.75% as of June 30, 2013 and September 30, 2012). Under the terms and subject to the conditions in the agreement, Wells Fargo may determine which receivables are eligible receivables, may determine the amount it will advance on any such receivables, and may require the Company to repay advances made on receivables and thereby repay amounts outstanding under the AR Credit Facility on demand. Wells Fargo also has the right to require the Company to repurchase receivables that remain outstanding 90 days past their invoice date. The Company continues to be responsible for the servicing and administration of the receivables purchased and carries the receivables and any outstanding borrowings on its consolidated balance sheet.
As of June 30, 2013, the availability under this agreement was approximately $150,000 and the outstanding borrowings, which are classified as short-term debt on the condensed consolidated balance sheet, were approximately $2,955,000. Total interest expense related to the line of credit for the three months ended June 30, 2013 and 2012 approximated $44,000 and $44,000 respectively, and approximated $130,000 and $131,000 for the nine months ended June 30, 2013 and 2012, respectively.
The AR Credit Facility includes certain covenants which require compliance until termination of the agreement. As of the date of this report, the Company was in compliance with all such covenants.
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