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Credit Facility
3 Months Ended
Mar. 31, 2013
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

Note 13.    Credit Facility

 

On April 4, 2011, the Company entered into an Amended and Restated Business Financing Agreement (the “Amended Financing Agreement”) with Bridge Bank N.A. (“Bridge Bank”) which amended and restated its existing credit facility. The Amended Financing Agreement provides a credit facility to the Company of up to $5.0 million which bears interest at the higher of (i) the prime rate plus 2.0% or (ii) 5.25% percent, plus the payment of certain fees and expenses (the “Facility”). The Facility is secured by substantially all the personal property of the Company, including its accounts receivable and intellectual property. Subject to the terms of the Amended Financing Agreement, availability under the Facility is based on a formula pursuant to which Bridge Bank would advance an amount equal to the lower of $5.0 million or 80% of the Company’s eligible accounts receivable ($3.1 million at March 31, 2013) with account eligibility and advance rates determined by Bridge Bank in its sole discretion. Prior to the amendment of the Amended Financing Agreement described below the term of the Facility was two years and at the expiration of such term, all loan advances under the Facility would have become immediately due and payable. Under the Facility, the Company had outstanding borrowings of $1.3 million at March 31, 2013 and $2.4 million at December 31, 2012.

 

During the first quarter of 2013, the Company was not in compliance with a financial covenant under the Facility. On April 10, 2013, the Company entered into an agreement with Bridge Bank pursuant to which Bridge Bank agreed to waive such noncompliance, make certain other modifications and extend the maturity to July 3, 2013. The Company was in compliance with this financial convent as of March 31, 2013 and all subsequent measurement periods. Although the Company is in discussions with Bridge Bank about extending the Facility beyond July 3, 2013, the company cannot assure that it will be able to extend or renew the Facility on terms reasonably acceptable to the Company or at all. In the future, if the Company is unable to maintain its compliance or obtain a waiver of noncompliance with any covenants, Bridge Bank could accelerate the indebtedness, which could impair the Company’s ability to continue to conduct its business. If the Company’s indebtedness is accelerated in full or in part, it would be very difficult in the current financing environment for the Company to refinance its debt or obtain additional financing, which could adversely affect the Company’s ability to continue its business.