Revolving Line of Credit

3 Months Ended

Oct. 31, 2013

NOTE 7 – 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 2013, the Company chose not to renew this credit line and did not have a balance as of October 31, 2013.

The Company incurred interest income net of expenses of $286 for the three months ended October 31, 2013. The Company incurred interest income of $1 during the three months ended October 31, 2012.