Term Note B is for
Under the terms of the revolving line of credit, the Company can borrow up to
$5.0 million. The Company incurs interest expense on funds borrowed at the prevailing LIBOR rate plus 4.5-5.0% per annum with a minimum rate of 6.50% (6.50% at July 31, 2013). The revolver has a maturity date of June 30, 2015. As of July 31, 2013there is $2.5 millionborrowed on the revolving line of credit, none of which is current. The Company is obligated to maintain certain minimum consolidated adjusted EBITDA levels, certain minimum liquidity levels, certain total leverage ratios, and certain fixed charge coverage ratios, all as calculated in accordance with the terms and definitions determining such amounts as contained in the Wells Fargo Credit Agreement. The Wells Fargo Credit Agreement also contains various information and financial reporting requirements. The Company is in compliance with all such covenants and requirements at July 31, 2013. In June 2011, the Company issued through a private placement 1,666,667 shares of preferred stock to a group of related party institutional investors at a price of $2.40per share for a total of $4.0 million. The preferred stock automatically convert on a 1-for-1 basis into shares of common stock of the Company on June 30, 2013. The preferred stock included an annual dividend of $0.24per share, payable in cash or stock at the Company's option. In August 2013, the Company paid $66,000in preferred stock dividends through the period through conversion.
We believe that funds generated from operations, plus our existing cash resources and amounts available under our credit agreement, will be sufficient to meet our anticipated working capital and other needs.
Operating Cash Flows. For the three months ended
July 31, 2013cash provided by operations was $0.9 millionand was primarily the result of changes in working capital, including a reduction in accounts receivable. For the three months ended July 31, 2012cash provided by operations was $0.6 million, also primarily the result of changes in working capital. Investing Cash Flows. Net cash provided by investing activities was $0.4 millionfor the three months ended July 31, 2013and was the result of proceeds from the sale of the Mainframe Composer product line. Net cash provided by investing activities was $1.0 millionfor the three months ended July 31, 2012and was the result of proceeds from the sale of our Unify trade name. Financing Cash Flows. Net cash used in financing activities for the three months ended July 31, 2013was $1.7 millionand was the result of principal payments on debt and capital lease obligations. Net cash used in financing activities for the three months ended July 31, 2012was $1.9 millionand was primarily the result of principal payments on debt obligations.
A summary of certain contractual obligations as
July 31, 2013(in thousands)
Payments Due by Period
1 year After Contractual Obligations Total or less 2-3 years 4-5 years 5 years Debt financing
$ 15,741 $ 1,224 $ 14,517$ - $ - Estimated interest expense 1,919 1,039 880 - - Other liabilities 541 401 - - 140 Capital lease obligations 251 124 127 - - Operating leases 3,647 1,389 1,884 374 - Total contractual cash obligations $ 22,099 $ 4,177 $ 17,408 $ 374 $ 140
Other liabilities primarily include mandatory severance costs associated with a French statutory government regulated plan covering all