Note 4 - Related Party Debt Agreements |
6 Months Ended |
|---|---|
Dec. 31, 2017 | |
| Notes to Financial Statements | |
| Related Party Debt Agreement Disclosure [Text Block] |
NOTE 4 - RELATED PARTY DEBT AGREEMENTSEsenjay Unrestricted Line o f Credit We are party to an Unrestricted Line of Credit with Esenjay. The Unrestricted Line of Credit has a maximum borrowing amount of
$10,000,000, is convertible at a rate of $0.60 per share, bears interest at 8% per annum and matures on January 31, 2019. Advances under the Unrestricted Line of Credit are subject to Esenjay's approval.The outstanding principal balance of the Unrestricted Line of Credit as of December 31, 2017 was $8,400,000, resulting in a remaining $1,600,000 available for future draws under this agreement, subject to lender’s approval. During the
three and six months ended December 31, 2017, the Company recorded approximately $151,000 and $272,000, respectively of interest expense in the accompanying condensed consolidated statements of operations related to the Unrestricted Line of Credit. Subsequent to December 31, 2017, we have borrowed an additional $555,000 under the credit facility (see Note 9 ). Shareholder Convertible Promissory Note On
April 27, 2017, we formalized an oral agreement for advances totaling $500,000, received from a shareholder (“Shareholder”) into a written Convertible Promissory Note (the “Convertible Note”). Borrowings under the Convertible Note accrue interest at 12% per annum, with all unpaid principal and accrued interest due and payable on October 27, 2018. In addition, at any time commencing on or after the date that is six (6 ) months from the issue date, at the election of Shareholder, all or any portion of the outstanding principal, accrued but unpaid interest and/or late charges under the Convertible Note may be converted into shares of the Company’s common stock at a conversion price of
$1.20 per share; provided, however, the Shareholder shall not have the right to convert any portion of the Convertible Note to the extent that the Shareholder would beneficially own in excess of 5% of the total number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon conversion of the Convertible Note. During the three and six months ended December 31, 2017, we recorded $15,000 and $30,000 of interest expense in the accompanying condensed consolidated statements of operations related to the Convertible Note. |