XML 58 R16.htm IDEA: XBRL DOCUMENT v2.4.0.6
Revolving Credit Facility
6 Months Ended
Dec. 31, 2012
Revolving Credit Facility [Abstract]  
Revolving Credit Facility

9. Revolving Credit Facility

     We have a $10,000,000 credit line (the "Revolver") with Silicon Valley Bank (the "Bank") that matures on December 31, 2013. Advances against the Revolver bear interest on the outstanding principal at a rate per annum equal to the greater of 4.0% or either: (1) the prime rate, or (2) the LIBOR rate plus a LIBOR rate margin of 2.75%. We have borrowing availability of up to $10,000,000 under this Revolver as long as we maintain cash at or through the Bank of $15,000,000 or more. At all times that we maintain cash at or through the Bank of less than $15,000,000, the amount available for advance under the Revolver is calculated from a formula that is primarily based upon a percentage of eligible accounts receivable, which may result in less than, but no more than, $10,000,000 of availability.

     The interest rate on the Revolver was 4.0% as of December 31, 2012. The outstanding principal amount plus all accrued but unpaid interest is payable in full at the expiration of the credit facility on December 31, 2013. Based on our cash balance at the Bank as of December 31, 2012, $10,000,000 was available to us under the Revolver. As of December 31, 2012, $0 was drawn under the Revolver, and we did not draw against the Revolver at any time during the six months ended December 31, 2012.

     Under the Revolver, we are obligated to maintain a consolidated tangible net worth (total assets minus total liabilities and intangible assets) of at least $13,528,000 as of the last day of each quarter, increasing by 100% of quarterly net income and 100% of issuances of equity, net of issuance costs, and a consolidated adjusted quick ratio of at least 1.25 to 1.00 (cash, short-term investments and accounts receivable divided by current liabilities, excluding deferred revenue). Additionally, we are subject to certain negative covenants whereby we must first receive the banks written consent prior to any dispositions, changes in business, management, or business locations, mergers or acquisitions, indebtedness, encumbrances, maintenance of collateral accounts, investments or subordinated debt. As of December 31, 2012, we were in compliance with these covenants as our consolidated adjusted quick ratio was 5.52 to 1.00 and our tangible net worth was $22,690,000. The Revolver is secured by substantially all of the assets of the company.

     On July 30, 2012, we entered into a Waiver and Second Modification (the "Modification") to the Second Amended and Restated Loan and Security Agreement (the "Credit Agreement") with Silicon Valley Bank governing the Revolver. The Modification permits us to make payments of quarterly cash dividends. We may pay quarterly cash dividends, as approved by our board of directors from time to time, so long as an Event of Default (as defined in the Credit Agreement) does not exist at the time of declaration or payment of any such cash dividend and would not exist after giving effect to such cash dividend, and provided such cash dividends do not exceed an aggregate of $3,000,000 per fiscal year. In addition, on December 31, 2012, we entered into a consent with the Bank that permits a one-time special dividend (described in Note 12 below) of up to $5 million to be paid no later than December 31, 2012, without a creating an Event of Default.