Line of Credit and Long-Term Debt

12 Months Ended

Sep. 30, 2012

Line of Credit and Long-Term Debt

Line of Credit and Long-Term Debt

12. Line of Credit and Long-Term Debt

        In June 2006, in conjunction with the asset purchase agreement with Coloplast, the Company entered into an unsecured loan note deed with Coloplast with an outstanding principal amount of $5,340,000. The promissory note was non-interest bearing, payable and due in five equal installments of $1,068,000 payable annually on June 2. The Company discounted the note at 6.90%, which reflected the Company's cost of borrowing at the date of the purchase agreement and the discount was amortized over the life of the note. The final payment of $1,068,000 was paid in May 2011.

        In December 2010, the Company entered into a credit facility with RBC Wealth Management. The credit facility consists of a revolving line of credit of up to $25,000,000 with interest accruing monthly at a variable rate. In conjunction with the closing of the Laprolan acquisition described under Note 3, on April 7, 2011, the Company drew down $15,057,775 from the line of credit. In January 2012, the Company used a portion of its cash and cash equivalents and marketable securities and paid off its entire outstanding balance on its line of credit. The borrowings under this credit facility are limited to the value of eligible assets held with RBC Wealth Management. The credit facility now consists of a revolving line of credit of up to $5,000,000 with interest accruing monthly at a variable rate of 1.375% as of September 30, 2012. As of September 30, 2012, the Company had no outstanding balance under the revolving line of credit.