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Revolving Credit Agreement
9 Months Ended
Sep. 30, 2012
Notes to Financial Statements  
Note 7. Revolving Credit Agreement

On June 30, 2010, the Company entered into a secured a revolving credit facility with a financial institution for $200,000 which was secured by a $200,000 certificate of deposit. The facility is for a period of 3 year and 6 months from July 1, 2010 to December 31, 2013. The interest rate on a drawdown from the facility is the certificate of deposit rate plus 1.25% with interest payable monthly and the principal due at maturity. The financial institution also renewed the $200,000 irrevocable letter of credit for the full amount of the credit facility in favor of Sunshine Distribution LP, with respect to the lease of the Company’s corporate headquarters at 1560 West 190th Street, Torrance, California.

 

On November 7, 2012, Sunshine Distribution LP initiated a drawdown from the irrevocable standby letter of credit in order to pay October rent and unpaid retro-active rent adjustments for the Company’s corporate headquarters in the amount of $72,735. The financial institution redeemed part of the certificate of deposit in the same amount to fund the drawdown on the irrevocable standby letter of credit.