(6) Line of Credit

12 Months Ended

Jun. 30, 2015

Notes

(6) Line of Credit

(6)  Line of Credit

Until March 2015, the Company maintained a line of credit with a bank.  In March 2015, the Company moved the line of credit to a new lender. Interest on the new line of credit is based on the prime rate plus 5%, with a minimum rate of 8.25%. At June 30, 2015 the rate was 8.25%. Payments are due monthly, with minimum monthly interest of $5,000. The borrowing base on the new line of credit is approximately $2,600,000 and is collateralized by accounts receivable and inventory.  Borrowing limitations under the new line of credit are based on 85% of eligible accounts receivable and $700,000 of eligible inventory, up to a maximum credit facility of $3,000,000. The new line of credit matures on March 5, 2016. The line of credit has no negative loan covenants, however, there are affirmative covenants to provide accounts receivable ageing and financial statements within 90 days of month end and are in compliance with these covenants. 

The outstanding balance on the line of credit decreased $1,611,290 to $1,909,919 as of June 30, 2015, compared to $3,521,209 as of June 30, 2014.  This reduction was primarily made possible by the sale and leaseback of the Company’s Utah facility which provided approximately $2,100,000 in net cash to pay down the line of credit (see Note 8).