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Credit Facility
12 Months Ended
Dec. 31, 2011
Credit Facility [Abstract]  
Credit Facility

Note 6—Credit Facility

In December 2011, the Company entered into a credit agreement whereby the Company obtained a secured credit facility in the form of a revolving line of credit up to a maximum of $15.0 million (the "Revolving Line of Credit") and an equipment term loan up to a maximum of $12.5 million (the "Equipment Term Loan") (together, the "Credit Facility"). In general, amounts borrowed under the Credit Facility are secured by a lien on all of the Company's assets other than our intellectual property. In addition, under the credit agreement, the Company is required to pledge 65% of its equity interests in its Swiss subsidiary. The Company has also agreed not to encumber any of our intellectual property. The agreement also contains certain restrictive covenants that limit the Company's ability to, amongst other things; (i) incur additional indebtedness or guarantees; (ii) create liens or other encumbrances on our property; (iii) enter into a merger or similar transaction; (iiii) invest in another entity; (iv) declare or pay dividends; (v) invest in fixed assets in excess of a defined dollar amount. Repayment of amounts owed pursuant to the Credit Facility may be accelerated in the event that the Company is in violation of the representations, warranties and covenants made in the credit agreement, including certain financial covenants. The financial covenants that the Company must meet on a quarterly basis during the term of the credit agreement include a minimum liquidity ratio, a minimum quick ratio, and quarterly EBITDA and net income targets. It is uncertain whether the Company will be able to meet these financial covenants over the term of the credit agreement. If the Company fails to comply with the terms and conditions of this credit agreement, then the credit facility may be withdrawn and the bank could require immediate repayment of any outstanding obligation.

Revolving Line of Credit

The Company may use borrowings under the Revolving Line of Credit for general working capital and corporate purposes. Amounts borrowed under the Revolving Line of Credit bear interest, payable monthly, at either (i) the bank's prime rate or (ii) LIBOR plus 2.25%, at the Company's option subject to certain limitations. The Company must also pay an unused commitment fee, payable quarterly, equal to 0.25% per annum of the average daily unused amount of the Revolving Line of Credit. The Revolving Line of Credit matures on December 5, 2013, and may be prepaid in whole or in part at any time.

 

Equipment Term Loan

The Company may use borrowings under the Equipment Term Loan to finance 80% of eligible equipment purchases made between April 1, 2011 and April 30, 2012. Amounts borrowed under the Equipment Term Loan bear interest at either (i) the bank's prime rate or (ii) LIBOR plus 2.25%, at the Company's option subject to certain limitations. Interest under the Equipment Term Loan is payable monthly through April 30, 2012, after which time principal and interest owned shall be repaid in 36 equal monthly installments such that the Equipment Term Loan has been fully repaid by the maturity date of April 30, 2015, but may be prepaid in whole or in part at any time.

As of December 31, 2011, no amounts were outstanding under either the Revolving Line of Credit or the Equipment Term Loan. Further, as of December 31, 2011, the Company was in compliance with the terms of the credit agreement, therefore, the full amount of the credit facility was available.