10. LINE OF CREDIT	6 Months Ended
Nov. 30, 2012
Line Of Credit
Line of Credit	10. LINE OF CREDIT On August 25, 2011, the Company entered into a working capital credit facility agreement allowing the Company to borrow up to $1.5 million based upon qualified accounts receivable, and export-related inventory. On May 29, 2012 the credit agreement was amended to increase the borrowing limit to $2.0 million. On September 11, 2012 the Company entered into the Second Amendment to Loan and Security Agreement to increase the borrowing limit under the credit facility from $2.0 million to $2.5 million. Each account receivable financed by the lender will bear an annual interest rate or finance charge equal to the greater of the lender's prime rate less 0.5%, or 3.50%, when the Company meets certain borrowing base requirements. If the Company does not meet the borrowing base requirements, each account receivable financed by the lender will bear an annual interest rate or finance charge equal to the greater of the lender's prime rate plus 0.75%, or 4.75%. The applicable interest is calculated based on the full amount of the account receivable and export-related inventory provided as collateral for the actual amounts borrowed. Depending on the composition of the collateral items, whether or not the Company meets certain borrowing base requirements and the relative cash position of the Company, the equivalent annual interest rate applied to the actual loan balances may vary from 3.89% to 8.94%, assuming that the bank’s prime rate is 4.00% or less. At November 30, 2012 the weighted average interest rate on the outstanding loan balance was 3.95%. The average loan balance for the three and six months of fiscal 2013 was $1,381,000 and $1,043,000, respectively. The line of credit is collateralized by all the Company’s assets except for intellectual property, and has a maturity date of August 23, 2013. At November 30, 2012 the Company had drawn $1,685,000 against the credit facility. The balance available to borrow under the line at November 30, 2012 was $815,000. The Company was in compliance with all covenants at November 30, 2012.

10. LINE OF CREDIT

6 Months Ended

Nov. 30, 2012

10. LINE OF CREDIT

On August 25, 2011, the Company entered into a working capital credit facility agreement allowing the Company to borrow up to $1.5 million based upon qualified accounts receivable, and export-related inventory. On May 29, 2012 the credit agreement was amended to increase the borrowing limit to $2.0 million. On September 11, 2012 the Company entered into the Second Amendment to Loan and Security Agreement to increase the borrowing limit under the credit facility from $2.0 million to $2.5 million. Each account receivable financed by the lender will bear an annual interest rate or finance charge equal to the greater of the lender's prime rate less 0.5%, or 3.50%, when the Company meets certain borrowing base requirements. If the Company does not meet the borrowing base requirements, each account receivable financed by the lender will bear an annual interest rate or finance charge equal to the greater of the lender's prime rate plus 0.75%, or 4.75%. The applicable interest is calculated based on the full amount of the account receivable and export-related inventory provided as collateral for the actual amounts borrowed. Depending on the composition of the collateral items, whether or not the Company meets certain borrowing base requirements and the relative cash position of the Company, the equivalent annual interest rate applied to the actual loan balances may vary from 3.89% to 8.94%, assuming that the bank’s prime rate is 4.00% or less. At November 30, 2012 the weighted average interest rate on the outstanding loan balance was 3.95%. The average loan balance for the three and six months of fiscal 2013 was $1,381,000 and $1,043,000, respectively. The line of credit is collateralized by all the Company’s assets except for intellectual property, and has a maturity date of August 23, 2013. At November 30, 2012 the Company had drawn $1,685,000 against the credit facility. The balance available to borrow under the line at November 30, 2012 was $815,000. The Company was in compliance with all covenants at November 30, 2012.