Due from Factor

12 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Due from Factor

5. Due from Factor

On September 9, 2015, we entered a Loan and Security Agreement (the “Summit Loan”) with Summit Financial Resources LP, (the “Factor”) whereby we can borrow up to $1.0 million against our eligible receivables, on a revolving basis, as defined in the agreement. Borrowed funds will bear interest at a rate of prime plus 2 percent, and incur an additional administrative fee of 0.7 percent on the monthly average outstanding balance. The Summit Loan has an initial period of 18 months with successive one year renewal options and requires an annual facility fee of $10,000.

As of June 30, 2016, the total amount of receivables assigned to the Factor pursuant to the Summit Loan was $1.4 million and we bear the risk of loss in the event of non-payment by the customers. During the fiscal year ended June 30, 2016, we borrowed $1.7 million, on a revolving basis, under the Summit Loan, which amounts were paid in full by June 30, 2016. Therefore, at June 30, 2016, we had no outstanding borrowings against the Summit Loan.