CONVERTIBLE NOTES PAYABLE DUE TO STOCKHOLDERS

3 Months Ended

Sep. 30, 2015

NOTE 5 – CONVERTIBLE NOTES PAYABLE DUE TO STOCKHOLDERS

On August 15, 2014, the Company raised gross proceeds, in a debt financing transaction, of $90 from its two principal stockholders, and issued secured promissory notes in the principal amount of $45 to each of them (the “August 2014 Notes”). On December 18, 2014, the Company raised gross proceeds, in a debt financing transaction, of $150 from its two principal stockholders, and issued secured promissory notes in the principal amount of $75 to each of them (the “December 2014 Notes”). On May 15, 2015, the Company raised gross proceeds, in a debt financing transaction, of $100 from its two principal stockholders, and issued secured promissory notes in the principal amount of $50 to each of them (the “May 2015 Notes”). The notes had a Maturity Date of July 31, 2015 and bear interest at the rate of 5.0% per annum, payable at maturity. Any amounts that remain unpaid after July 31, 2015, shall thereafter bear interest at the rate of twelve percent (12%) per annum. Interest is calculated on the basis of actual number of days elapsed over a year of 360 days. The notes are secured by all the assets of the Company.

On September 3, 2015, effective as of July 31, 2015, the maturity dates of the February 2014 Notes, the August 2014 Notes, the December 2014 Notes and the May 2015 Notes (collectively, the “Prior Notes”), in the aggregate principal amount of $515, were extended to August 31, 2016 and the Prior Notes were amended to permit conversion of the principal and accrued interest due and payable under the Prior Notes into shares of the Company’s common stock.

On September 3, 2015, the Company issued secured convertible promissory notes (the “Secured Convertible Notes”) in the principal amount of $25 to each of its two principal stockholders, for an aggregate of $50, each an existing secured lender to the Company. The Secured Convertible Notes have a maturity date of August 31, 2016 and bear interest at the rate of 5.0% per annum, payable at maturity. The outstanding principal and accrued interest of each Secured Convertible Note is convertible, subject to a 4.99% Beneficial Ownership Cap (as defined in the Secured Convertible Notes), into shares of the Company’s common stock at an initial conversion price of $5.00 per share (subject to adjustment), at the option of the respective holders.

The obligations of the Company under the Secured Convertible Notes are secured by a first priority security interest in all of the property of the Company pursuant to letter agreements, dated September 3, 2015, with its two principal stockholders. The proceeds of the Secured Convertible Notes will be utilized by the Company to fund its working capital needs.

	Amount Due
Outstanding as of June 30, 2015	$	515
Issued		50
Outstanding as of September 30, 2015	$	565

During the three months ended September 30, 2015 and 2014, interest expense amounted to approximately $7 and $3, respectively. Accrued interest as of September 30, 2015 and June 30, 2015was approximately $28 and $21, respectively.