Quarterly report pursuant to Section 13 or 15(d)

Convertible Revolving Note Payable To Shareholder

 v2.3.0.11
Convertible Revolving Note Payable To Shareholder
6 Months Ended
Jun. 30, 2011
Convertible Revolving Note Payable To Shareholder  
Convertible Revolving Note Payable To Shareholder
7. Convertible Revolving Note Payable to Shareholder

On June 29, 2011, the Company entered into a Third Amendment (the "Third Amendment") to its unsecured convertible revolving credit facility agreement with the Koski Family Limited Partnership (the "KFLP") (the "Credit Facility"). As a result of the Third Amendment, the Company increased its availability under the Credit Facility by $2,000,000 from $5,000,000 to $7,000,000. Future draws of the $2,000,000 in increased availability provided by the Third Amendment to the Credit Facility are limited to $1,000,000 increments beginning no earlier than August 2011 and October 2011, respectively. All other terms of the Credit Facility remained the same including the interest rate at LIBOR plus 6.0% and the automatic conversion of any amounts borrowed and outstanding under the Credit Facility into Company securities that may be issued by the Company in subsequent securities offerings. Any automatic conversion of amounts outstanding under the Credit Facility would be on the same terms of any such offering. In addition, the Amendment provides the KFLP with the right to put any undrawn available amounts under the Credit Facility, as amended, to the Company and thereby have a note issued to the KFLP. The KFLP can exercise its put right to the extent it desires to fully participate, through the automatic conversion provision, in any subsequent offering by the Company.