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Revolving Line of Credit
12 Months Ended
Jul. 31, 2012
Debt Disclosure [Abstract]  
Revolving Line Of Credit [Text Block]

Note 8 – Revolving Line of Credit

 

On May 9, 2011, advances under the credit line were secured with substantially all of the Company’s assets, were subject to interest at 1% above the Wall Street Journal prime rate index, and were subject to the following restrictive covenants: (i) the current ratio shall not be less than 1.2 times; (ii) the debt to tangible net worth ratio shall not exceed 2.5 times; and (iii) the quarterly EBITDA shall not be less than $30,000 on a rolling four quarter basis.

 

As of July 2012, the Company chose not to renew this credit line and did not have a balance as of July 31, 2012.

 

The Company incurred interest expense of $3,082 and $25,172 during the years ended July 31, 2012, and 2011, respectively.