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(6) Line of Credit
12 Months Ended
Jun. 30, 2012
Notes  
(6) Line of Credit

(6)     Line of Credit

The Company has a revolving line-of-credit facility with a commercial bank in the amount of $7,000,000. Borrowing limitations are based on 45% of eligible inventory and up to 80% of eligible accounts receivable resulting in a borrowing limit of $5,115,000 as of June 30, 2012. As of June 30, 2012 and 2011, the outstanding balance was approximately $3,498,000 and $2,584,000, respectively. Available borrowings as of June 30, 2012 were $1,617,000.  The line of credit is collateralized by inventory and accounts receivable and bears interest at a rate based on the lender’s 90-day LIBOR rate plus 3%. The interest rate was 3.5% and 3.2% as of June 30, 2012 and 2011, respectively. This line is subject to biennial renewal and matures on December 15, 2012. Accrued interest is payable monthly.

The Company’s revolving line of credit agreement includes covenants requiring the Company to maintain certain financial ratios. As of June 30, 2012, management believes the Company was in compliance with its loan covenants.