Line of Credit and Long-Term Debt

9 Months Ended

Jun. 30, 2012

Line of Credit and Long-Term Debt

Line of Credit and Long-Term Debt

Note K — Line of Credit and Long-Term Debt

In June 2006, in conjunction with an asset purchase agreement with Coloplast A/S, 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 and payable in five equal annual 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 consisted of a revolving line of credit of up to $25,000,000 with interest accruing at a monthly variable rate.  In conjunction with the closing of the Laprolan acquisition described under Note B, on April 7, 2011, the Company drew down $15,057,775 from its credit line.  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 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 June 30, 2012.  As of June 30, 2012, the Company had no outstanding balance under the revolving line of credit.