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Note 9. Debt
 12 Months Ended
Sep. 30, 2012
Debt Disclosure [Text Block]
9.   Debt

Debt consists of the following:

   
September 30,
 
   
2012
   
2011
 
Line of credit borrowings
  $ 2,382     $ 2,392  
Bank term loan
    1,692       2,000  
Subordinated promissory notes
    338       375  
Total debt
  $ 4,412     $ 4,767  
Less current portion
  $ 1,424     $ 1,750  
Long term debt, net of current portion
  $ 2,988     $ 3,017  

Line of Credit

In September 2008, the Company entered into a Loan and Security Agreement (the “SVB Agreement”) with Silicon Valley Bank (“SVB”) that provided for a revolving working capital line of credit of up to the lesser of (i) $1.25 million and (ii) 80% of eligible accounts receivable, subject to specified adjustments. Borrowings under the credit line were due in September 2009 and subject to interest at prime plus 1.0%. Borrowings were secured by all of the Company’s accounts receivable, investment property and financial assets.

In December 2008, the Company amended its Loan and Security Agreement with SVB (the “Amendment”). The Amendment extended the term of the SVB Agreement to December 28, 2009 and increased availability under the credit line to the lesser of (i) $3.0 million and (ii) 80% of eligible accounts receivable, subject to specified adjustments.  Borrowings were subject to interest at prime plus 2.0%, with a minimum interest rate of 8.0% and were secured by all of the Company’s assets.  At September 30, 2009, the Company had an outstanding balance under the credit line of $1 million at 8% (prime was 3.25%) which was repaid in October 2009. The Company obtained an extension of this Amendment to March 31, 2010.

In March 2010, the Company entered into an Amended and Restated Loan and Security Agreement with SVB (the “Loan Agreement”). The Loan Agreement has a two year term which expires on March 31, 2012. The Loan Agreement provides for up to $5 million of revolving credit advances, of which $3.0 million may be used for acquisitions and up to $5.0 million may be used for working capital purposes. Borrowings are limited to the lesser of (i) $5 million and (ii) 80% of eligible receivables as defined. In the event that the borrowing base formula results in less than $5 million in available borrowing, the Company can borrow up to $2.0 million in out of formula borrowings (provided such amount does not exceed $5 million) for specified periods of time.   Borrowings bear interest at SVB’s prime plus 1.00% or 1.25%, depending on the level of the adjusted EBITDA, as defined.  The Company pays an annual commitment fee of 0.50% and an unused fee of 0.25%. Borrowings are secured by all of the Company’s assets and all of the Company’s intellectual property. The Company is also required to comply with certain financial and performance covenants.  The Loan Agreement replaced the Company’s prior credit facility with SVB, which expired on March 31, 2010.

In May 2011, the Company amended its loan arrangement (the “Amendment”) with Silicon Valley Bank (“SVB”). Under the terms of the existing agreement with SVB, the Company’s line of credit was limited to the lesser of (i) $5 million and (ii) 80% of eligible receivables as defined, and up to $2 million could be borrowed in out of formula borrowings for specified periods of time (provided the total amount outstanding does not exceed $5 million).

The Amendment:  (i) extended the maturity date of the line of credit for one year to March 31, 2013; (ii) revised certain financial covenants; and (iii) amended the out of formula borrowings to be structured as a $2 million term loan and interest on the term loan will be at SVB’s prime rate plus 1.75%.  Interest on the term loan was paid until April 1, 2012 and on and after April 2, 2012, principal and interest on the term loan was being paid over 36 months ending on April 1, 2015. In May 2012, we amended our loan agreement (the “2012 Amendment”) with SVB, extending the maturity date of the line of credit for one year to March 31, 2014.  The 2012 Amendment also revised a financial covenant, increasing our minimum liquidity requirement. Minimum liquidity is defined as funds held with SVB plus borrowing availability on our line of credit.

At September 30, 2012, the Company had an outstanding balance under the credit line of $2.4 million and $1.7 million outstanding on the term loan, of which $0.8 million was repaid in October 2012.

Subordinated Promissory Note

In May 2010, in connection with the acquisition of TMX, the Company issued a $500 thousand subordinated promissory note (“the Note”) payable to TMX.  The Note is subordinated to the Company’s primary lender (Silicon Valley Bank) and is payable in twelve quarterly installments of $42 thousand, plus interest at 1%, with the first payment due on January 15, 2011. The Note may be paid in whole or in part at any time without discount, premium, or penalty.

In May 2012, the Company assumed two Promissory Notes in connection with the acquisition of Marketnet, Inc. The first Promissory Note in the amount of $63 thousand is payable in eight equal installments of $8 thousand, including interest accrued at 5%, and matures in May 2014. The first installment was due in July 2012. The second Promissory Note in the amount of $80 thousand is payable in twelve equal installments of $7 thousand, including interest accrued at 5%, and matures in May 2015. The first installment was due in July 2012.

As of September 30, 2012, the Company had the following minimum debt obligation payments remaining:

   
Amount
 
Year Ending September 30,
       
2013
  $ 1,424  
2014
    2,875  
2015
    113  
2016
    -  
2017
    -  
Total
  $ 4,412  
Less interest at a weighted average of 1.00%
    10  
Total debt obligations
  $ 4,402  

Capital Lease Obligation

   
September 30,
 
   
2012
   
2011
 
Capital lease obligations
  $ 357     $ 431  
Less: Current portion
    (230 )     (216 )
Capital lease obligations
  $ 127     $ 215  

As of September 30, 2012, the Company’s future minimum lease payments due under capitalized lease obligations due in fiscal 2013, 2014, and 2015 consist of $248 thousand, $99 thousand and $10 thousand, respectively.