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Bank Loan

12 Months Ended

Sep. 30, 2012

(7)

Bank Loan

On March 11, 2004, the Company secured financing from US Bank National Association to purchase the management contracts for certain Lindner funds in the amount of $7.9 million. The loan agreement required fifty-nine (59) monthly payments in the amount of $94,060 plus interest at the bank’s prime rate as it may change from time to time and was secured by the Company’s assets. On July 1, 2005, the loan was amended to provide an additional $6.7 million to fund purchase of the management contract for the Henlopen Fund. An additional $2.0 million was loaned to the Company on September 27, 2010, and the loan was amended to require 60 monthly payments in the amount of $52,083 plus interest at the bank’s prime rate (currently 3.25%, in effect since December 17, 2008) less one percent (effective interest rate of 2.25%) and is secured by the Company’s assets. The final installment of the then outstanding principal and its interest are due September 30, 2015. The loan balance is $1.93 million as of September 30, 2012 compared to $2.55 million at the end of the prior comparable period. The note maturity schedule is as follows:


Year ended September 30:
2013	$	625,000
2014		625,000
2015		677,083

Total	$	1,927,083

The loan agreement includes certain reporting requirements and loan covenants requiring the maintenance of certain financial ratios. The Company was in compliance with the loan covenants for the fiscal years ending September 30, 2012 and 2011.

In connection with securing the financing discussed above, the Company incurred loan costs in the amount of $31,250. These costs are included in other assets and the unamortized balance of $31,250 (as of the loan amendment date of September 27, 2010) is being amortized on a straight-line basis over 60 months. Amortization expense during the fiscal year ended September 30, 2012 was $6,250 compared to $17,324 for the prior comparable period. Future amortization expense is as follows:


Year ended September 30:
2013	$	6,250
2014		6,250
2015		6,250

Total	$	18,750

In connection with the purchase of the assets related to the FBR Funds, the Company funded part of the purchase price by entering into an amendment to the existing bank loan, bringing the total loan balance to $18.4 million. See Footnote 13 for more detail on the amendment to the loan agreement.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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