Margin Account Loan

12 Months Ended

Dec. 31, 2011

Margin Account Loan

Margin Account Loan

(21) Margin Account Loan

A "Margin Account" loan was established with Wells Fargo Advisors for which the proceeds of this flexible form of indebtedness effectively serves the Company as a line of credit to finance the capital improvement project underway at the New Brunswick, New Jersey Manufacturing facility. In order to maintain this Margin Account, established on July 26, 2011 with an estimated maximum dollar value of $6.5 million, the Company needs to pledge, restrict from sale and segregate to a dedicated Margin Account its Marketable Securities at an approximate ratio of two to one of security collateral to debt undertaken. With the exception of collateral requirements, the Company maintains all the rights and benefits of ownership including receipt of interest, dividends or proceeds from the securities. While this Margin Account has no material establishment or maintenance fees, it currently carries an effective interest rate of approximately 3% per annum applied against the "Margin Debit Balance" (i.e., those funds withdrawn and outstanding), based on the prevailing "Wells Fargo Base Rate" less 2.75%. At December 31, 2011, the principal loan balance of the Margin Account was approximately $1,695,000, for which approximately $3,101,000 in Marketable Securities became restricted as dedicated collateral for the indebtedness. As a result of the loan being outstanding for only three months at December 31, 2011, the finance charge was approximately $6,000 for 2011. (see Note 6: Marketable Securities - Restricted).