FINANCE RECEIVABLES

12 Months Ended

Jun. 30, 2020

The Company’s finance receivables consist of financed devices under the QuickStart program and Cantaloupe devices contractually associated with the Seed platform. Predominately all of the Company’s finance receivables agreements are classified as non-cancellable sixty month sales-type leases. As of June 30, 2020 and 2019, finance receivables consist of the following:



	As of June 30,
($ in thousands)	2020		2019

Current finance receivables, net	$	7,468	$	6,727
Finance receivables due after one year, net	11,213		12,642
Total finance receivables, net of allowance of $150 and $606, respectively	$	18,681	$	19,369

The Company routinely evaluates outstanding finance receivables for impairment based on past due balances or accounts otherwise determined to be at a higher risk of loss. A finance receivable is classified as nonperforming if it is considered probable the Company will be unable to collect all contractual interest and principal payments as scheduled.

At June 30, 2020 and 2019, credit quality indicators consisted of the following:



	As of June 30,
($ in thousands)	2020		2019

Performing	$	18,681	$	19,369
Nonperforming	150		606
Gross finance receivables	$	18,831	$	19,975

As part of the financing under the Quickstart program and Cantaloupe devices contractually associated with the Seed platform, the Company has contractually granted deferred payment terms, where the entire sequence of up to 60 monthly payments are deferred by an agreed upon period. The “Deferred Payment Arrangements / Timing” column represents amounts subject to the agreed upon deferral period or amounts subject to adjustments related to situations where a third party is financing the receivable. The “Other Finance Receivables” column represents an aging schedule for finance receivables not subject to such deferral arrangements and other non-performing receivables.



	As of June 30, 2020						As of June 30, 2019
($ in thousands)	Deferred Payment Arrangements / Timing		Other Finance Receivables		Total		Deferred Payment Arrangements / Timing		Other Finance Receivables		Total

Current	$	17,534	$	27	$	17,561	$	18,780	$	353	$	19,133
30 days and under	168		100		268		178		12		190
31 - 60 days	28		12		40		38		11		49
61 - 90 days	103		35		138		135		11		146
Greater than 90 days	566		258		824		238		219		457
Total finance receivables	$	18,399	$	432	$	18,831	$	19,369	$	606	$	19,975

Cash to be collected on our performing finance receivables due for each of the fiscal years after June 30, 2020 are as follows:



($ in thousands)

2021	$	9,129
2022	5,627
2023	4,237
2024	2,459
2025	886
Total amounts to be collected	$	22,338
Less: interest	(3,507		)
Less: allowance for nonperforming receivables	(150		)
Total finance receivables	$	18,681

Sale of Finance Receivables

The Company accounts for transfers of finance receivables as sales when it has surrendered control over the related assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred. During fiscal year 2018, the Company transferred certain groups of finance receivables with no recourse to third-party financing entities for approximately $2.3 million. The transfers were accounted for as sales with derecognition of the associated finance receivables. Gains and losses stemming from such transfers are immaterial.

Transfers of finance receivables that do not qualify for sale accounting are reported as collateralized borrowings. Accordingly, the related assets remain on the Company’s balance sheet and continue to be reported and accounted for as if the transfer had not occurred. Cash proceeds from these transfers are reported as financing obligations (debt), with attributable interest expense recognized over the life of the related transactions. During December 2017, the Company transferred certain groups of finance receivables to third-party financing entities for approximately $1.1 million. Such transfers are subject to recourse provisions for the first 3 months after the date of transfer, after which the recourse provisions expire. Accordingly, the related finance receivables remained on the balance sheet at December 31, 2017 and the cash proceeds of approximately $1.1 million were reported as financing obligations at December 31, 2017. During March 2018, the recourse provisions expired resulting in the finance receivables and financing obligations being derecognized.