Note 5 — Credit Line Facility

Gulfstream Credit Line Facility

On September 4, 2009, the Company entered into a one-year Business Loan Agreement, Promissory Note and Assignment of Deposit (collectively, the “Gulfstream Credit Line Facility”) with a lender. Pursuant to the Gulfstream Credit Line Facility, the lender agreed to advance the Company a maximum of $500,000 secured by the Company’s $500,000 certificate of deposit held by the lender. Interest was payable on any advance under the Gulfstream Credit Line Facility at a rate of 1.000 percentage point under the corporate loan base rate index published by the Wall Street Journal, with a minimum interest rate of 4.750% per annum.

On November 2, 2009, the Company entered into a revised Gulfstream Credit Line Facility with the same lender discussed above. Under the revised loan agreement, the lender agreed to advance the Company a maximum of $1,000,000 secured by the existing $500,000 certificate of deposit held by the lender plus an additional $550,000 certificate of deposit to be held by the lender. The revised Credit Line Facility expired on September 8, 2010. All other terms of the September 4, 2009 Credit Line Facility remained unchanged.

In November and December 2009, the Company borrowed $750,000 from the Gulfstream Credit Line Facility. In June 2010, the Company repaid the $750,000 balance under the credit line facility.

In September 2010, the Company elected not to renew the Gulfstream Credit Line Facility.

Interest expense related to the Gulfstream Credit Line Facility for the nine months ended June 30, 2011 and 2010, was $0 and $18,000, respectively.

PNC Credit Line Facility

On February 11, 2011, the Company entered into a Committed Line of Credit agreement (the “PNC Credit Line Facility”) with PNC Bank, National Association ("PNC"). Pursuant to the PNC Credit Line Facility, the PNC will provide a maximum of $8,500,000 of revolving credit secured by the Company’s personal property, including inventory and accounts receivable. Interest is payable on any advance at LIBOR plus 2.75%. Advances under the PNC Credit Line Facility are subject to a Borrowing Base Rider, which establishes a maximum percentage amount of the Company’s accounts receivable and inventory that can constitute the permitted borrowing base. The PNC Credit Line Facility expires in February 2013.

The PNC Credit Line Facility requires the Company to comply with certain financial covenants which are defined in the credit agreement. As of June 30, 2011, these financial covenants included:

The Company will maintain as of the end of each fiscal quarter, on a rolling four quarter basis, a ratio of Senior Funded Debt to EBITDA of less than 2.0 to 1; and

The Company will maintain as of the end of each fiscal quarter, on a rolling four quarters basis, a Fixed Charge Coverage Ratio of at least 1.25 to 1.

As of June 30, 2011, the Company was in compliance with all applicable financial covenants pursuant to the PNC Credit Line Facility. The permitted borrowing base as of June 30, 2011, was $6,857,000. As of June 30, 2011, the Company had an outstanding principal balance of $500,000 with $6,357,000 available to borrow from the PNC Credit Line Facility.

Interest expense related to the PNC Credit Line Facility for the nine months ended June 30, 2011 and 2010, was $1,000 and $0, respectively.