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Line of Credit and Equipment Lease Facility Agreements
3 Months Ended
Sep. 29, 2012
Debt Disclosure [Abstract]  
Line of Credit and Equipment Lease Facility Agreements

(7) Line of Credit and Equipment Lease Facility Agreements

In May of 2012 the Company increased its $1 million revolving line of credit (“LOC”) to $2 million and renewed it $1.25 million equipment finance facility (“Lease Line”) with Sovereign Bank.   Both agreements mature in May 2013.  The Lease Line was subsequently reduced to $500 thousand in November 2012. The LOC is secured by the accounts receivable and other assets of the Company, has an interest rate of prime plus one percent (1.75%) and a one-year term. Under the terms of the agreement, the Company is required to maintain its operating accounts with Sovereign Bank. The LOC and the Lease Line are cross defaulted and cross collateralized. The Company is also subject to certain financial covenants within the terms of the line of credit that require the Company to maintain a targeted coverage ratio as well as targeted debt to equity and current ratios. The borrowing base under the line of credit was $912,000 of which $400,000 was outstanding at September 29, 2012. At September 29, 2012, the Company had $235,000 of capital equipment financed by the Lease Line and $1.015 million available remaining on the equipment finance facility. The Company is in compliance with both facilities. (See Subsequent Events for more detail.)