Revolving Line of Credit

9 Months Ended

Jul. 31, 2012

Revolving Line of Credit [Abstract]

Revolving Line of Credit

REVOLVING LINE OF CREDIT

The Company had a Loan Agreement with a bank. Under the Loan Agreement, the Company had a revolving line of credit with a maximum of $6,000,000 available through March 2013 that was secured by substantially all of the Company's assets. The interest rate on the revolving line of credit was at 0.25 percentage points above the prime rate as reported by the Wall Street Journal, with a minimum rate of 4.0%.  The interest rate on the revolving line of credit at July 31, 2012 was 4.0%, the minimum rate under the terms of the agreement. At July 31, 2012, the Company had no outstanding balance on this line of credit. The Company was required to maintain a savings account balance with the Bank totaling 10% of the maximum amount available on the line of credit to serve as collateral on this line of credit.  At both July 31, 2012 and October 31, 2011, this amount totaled $600,000 and is included in restricted cash.

Subsequent to the quarter ended July 31, 2012, the Company terminated this revolving line of credit and entered into two new credit facilities with a different bank. The first is a revolving line of credit with a maximum of $6,000,000 available through August 2013. The second is a revolving term loan with a maximum of $8,000,000 available. The interest rates for both facilities are based on the one-month LIBOR rate plus 2.65% and 2.90% on the line of credit and revolving term loan, respectively. There are no savings account balance collateral requirements as part of this new credit facility. The Company currently has not made any advances on either of these two credit facilities.

The Company also has letters of credit totaling $386,928 as part of a credit requirement of Northern Natural Gas. Subsequent to the quarter ended July 31, 2012, these letters of credit were transferred to the Company's new lender as part of the new credit facilities. These letters of credit reduce the amount available under the revolving line of credit to approximately $5,613,000.