(3)

RECEIVABLES:

Receivables consist of:

	April 30,
	2015		2014
	(in thousands)

Fulfillment Services	$	7,993	$	11,406
Buyer Promissory Note (refer to Note 2)		1,600		-
Line of Credit receivable (refer to Note 2)		2,000		-
Real estate operations and corporate		116		-
		11,709		11,406
Less allowance for doubtful accounts		(444)		(450)
	$	11,265	$	10,956

The Company extends credit to various companies in its businesses that may be affected by changes in economic or other external conditions. Financial instruments that may potentially subject the Company to a significant concentration of credit risk primarily consist of trade accounts receivable from publishers in the magazine industry. As industry practices allow, the Company’s policy is to manage its exposure to credit risk through credit approvals and limits and, on occasion (particularly in connection with real estate sales), the taking of collateral. The Company also provides an allowance for doubtful accounts for potential losses based upon factors surrounding the credit risk of specific customers, historical trends and other financial and non-financial information.

In connection with the Stock Purchase Agreement discussed in Note 2 above, MD Buyers entered into the Buyer Promissory Note, which requires MD Buyers to pay ARIC $1,600,000. In addition, ARIC provided the Company Group with the Line of Credit in connection with the Stock Purchase Agreement. The Line of Credit permits the Company Group to borrow from ARIC up to a maximum principal amount of $2,000,000 from February 9, 2015 until May 11, 2015, $1,500,000 from May 12, 2015 until August 5, 2016 and $1,000,000 from August 6, 2016 until February 9, 2017. The receivable due to ARIC under the line of credit totaled $2,000,000 at April 30, 2015, which amount was repaid to ARIC on May 1, 2015 and may be reborrowed by the Company Group in the future. Refer to Note 2 for further details regarding the note receivable and the receivable resulting from the line of credit lending.

During 2015, revenues from one major customer of the Company’s Fulfillment Services business totaled $5,537,000 or 11.1% of total revenues for the Company. As of April 30, 2015, the Company’s Fulfillment Services business had $835,000 outstanding accounts receivable from this customer, which were paid in full by June 2015.