RELATED PARTY TRANSACTIONS

9 Months Ended

Mar. 30, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE M – RELATED PARTY TRANSACTIONS

Quadrant Management Inc. and Everest Hill Group Inc. (formerly known as Brean Murray Carret Group, Inc.)

ARC, Everest Hill Group Inc. (“Everest Hill Group”), Quadrant Management Inc. (“QMI”), and QMT are under common control. Prior to the Acquisitions, QMI, through Everest Hill Group, owned 74.0% of the membership interests of QMT. As a result of the Acquisitions, Everest Hill Group became the controlling shareholder of ARC. Specifically, Everest Hill Group controls 100% of the ownership interests of QMI, as well as, via certain wholly-owned intermediaries, 61.5% of the shares of ARC.

In addition, the following officers and directors of ARC are also affiliated with QMI and Everest Hill Group:

· Mr. Jason Young, the Company’s Chairman and Chief Executive Officer, has been a Managing Director at QMI since 2005, where he is responsible for making investments in US and emerging market companies, and where he frequently serves in active management or director-level roles.

· Mr. Theodore Deinard, who served as the Company’s Interim Chief Executive Officer and as a director of the Company until he resigned as the Interim Chief Executive Officer of the Company and as a member of the Company’s Board of Directors on April 29, 2013, is a Managing Director of QMI and serves as Chief Executive Officer of ARC Wireless, Inc. Mr. Deinard is also related by marriage to an officer of QMI.

· Mr. Young and Mr. Deinard are each deemed to share voting and investment power over the shares beneficially owned by Everest Hill Group.

· Mr. Jason Young and Mr. Alan Quasha, an officer of QMI, each serve on the Board of Directors of QMT and receive fees for such services.

Pursuant to the original terms of the ARC Advisory Agreement entered into on January 21, 2009, (the “ARC Advisory Agreement”), QMI provided ARC financial advisory and business consulting services, including restructuring services. The ARC Advisory Agreement expired on December 31, 2013 and was not extended.

In addition, QMI and QMT entered into a non-exclusive financial advisory agreement, (the “QMT Financial Advisory Agreement”), whereby QMI performed ongoing consulting and advisory services for QMT through QMI personnel (acting at all times as independent contractors to QMT). The scope of such services included business consulting services, financial advisory services, and other services. The QMT Financial Advisory Agreement continued in effect following the acquisition of QMT by the Company until December 31, 2013 in accordance with an Amendment to the QMT Financial Advisory Agreement.

There were no fees earned by QMI for the three months ended March 30, 2014 due to the expiration of the agreements as of December 31, 2013. Fees earned by QMI for the three months ended March 31, 2013 were $163 thousand. Fees earned by QMI for the nine months ended March 30, 2014 and March 31, 2013 were $835 thousand and $513 thousand, respectively.

As of March 30, 2014, QMT owed its members $20 thousand for state income tax withheld on membership distributions.