DUE FROM FACTOR

6 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

DUE FROM FACTOR

NOTE 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, as defined in the agreement. Borrowed funds will bear interest at a rate of prime plus 2 percent (5.75%), 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. Pursuant to the terms of the Summit Loan, during the third quarter of fiscal 2017 we informed Summit of our intent to terminate the loan in accordance with its initial loan commitment period ending on March 9, 2017. We have commenced preliminary discussions with our bank to obtain a revolving credit facility with them. As of the present time, there is no additional facility available to us, nor can we provide any assurance that there will be in the future.

As of December 31, 2016, the total amount of receivables that have been assigned to the Factor pursuant to the Summit Loan is $2.4 million and we bear the risk of loss in the event of non-payment by the customers. During the three and six months ended December 31, 2016, we borrowed $200,000 and $600,000, respectively, under the Summit Loan, which amounts were paid in full by December 31, 2016. Therefore, at December 31, 2016, we had no outstanding borrowings against the Summit Loan.