Note 7. Line of Credit	6 Months Ended
Dec. 31, 2014
Notes
Note 7. Line of Credit	NOTE 7. LINE OF CREDIT The outstanding balance on our line of credit decreased $1,998,518 to $1,522,691 as of December 31, 2014, compared to $3,521,209 as of June 30, 2014. This reduction was made possible by the sale and leaseback of our Cottonwood Heights, Utah facilities in which we generated approximately $2,100,000 in net cash to pay down our line of credit. Interest on the line of credit is based on the 90-day LIBOR rate (0.26% as of December 31, 2014) plus 3.5%. The line of credit is collateralized by accounts receivable and inventories. Borrowing limitations are based on approximately 45% of eligible inventory and up to 80% of eligible accounts receivable, up to a maximum credit facility of approximately $2,400,000. The maximum borrowing limit on our line of credit facility was reduced in August 2014 from $4,500,000 to $2,400,000 to reflect the reduction achieved through the previously reported payment of $2,100,000 on the line from the sale-leaseback of our Utah facilities. Interest payments on the line are due monthly. All borrowings under the line of credit are presented as current liabilities in the accompanying consolidated balance sheet. The line of credit agreement includes covenants requiring us to maintain certain financial ratios. As of December 31, 2014, we were not in compliance with all loan covenants. The line of credit matured on January 31, 2015. The bank has agreed to leave the line open until February 28, 2015 to allow us to replace the line of credit with a new credit facility with another lender. We are working with a new lender who has agreed in principle to pay off the bank by the end of February. The terms of this new credit facility are not as favorable as our bank line of credit had been. We expect that when fees are considered together with interest payable under the new line of credit agreement, the effective interest rate on borrowed money will be approximately 10%, compared to the rate payable on the bank line of credit which was approximately 4% per annum. The lending limit on the new line of credit will be approximately $3,000,000. Should we be unable to obtain this financing, we have offers from other lenders to provide financing. We believe that amounts available under the new line of credit with the new lender as well as cash generated from operating activities will continue to be sufficient to meet our annual operating requirements. Failure to obtain replacement financing would have a material adverse effect on our business operations and would raise doubt in regards to our ability to continue our normal business operations.

Note 7. Line of Credit

6 Months Ended

Dec. 31, 2014

NOTE 7. LINE OF CREDIT

The outstanding balance on our line of credit decreased $1,998,518 to $1,522,691 as of December 31, 2014, compared to $3,521,209 as of June 30, 2014. This reduction was made possible by the sale and leaseback of our Cottonwood Heights, Utah facilities in which we generated approximately $2,100,000 in net cash to pay down our line of credit. Interest on the line of credit is based on the 90-day LIBOR rate (0.26% as of December 31, 2014) plus 3.5%. The line of credit is collateralized by accounts receivable and inventories. Borrowing limitations are based on approximately 45% of eligible inventory and up to 80% of eligible accounts receivable, up to a maximum credit facility of approximately $2,400,000. The maximum borrowing limit on our line of credit facility was reduced in August 2014 from $4,500,000 to $2,400,000 to reflect the reduction achieved through the previously reported payment of $2,100,000 on the line from the sale-leaseback of our Utah facilities. Interest payments on the line are due monthly. All borrowings under the line of credit are presented as current liabilities in the accompanying consolidated balance sheet.

The line of credit agreement includes covenants requiring us to maintain certain financial ratios. As of December 31, 2014, we were not in compliance with all loan covenants. The line of credit matured on January 31, 2015. The bank has agreed to leave the line open until February 28, 2015 to allow us to replace the line of credit with a new credit facility with another lender. We are working with a new lender who has agreed in principle to pay off the bank by the end of February. The terms of this new credit facility are not as favorable as our bank line of credit had been. We expect that when fees are considered together with interest payable under the new line of credit agreement, the effective interest rate on borrowed money will be approximately 10%, compared to the rate payable on the bank line of credit which was approximately 4% per annum. The lending limit on the new line of credit will be approximately $3,000,000. Should we be unable to obtain this financing, we have offers from other lenders to provide financing. We believe that amounts available under the new line of credit with the new lender as well as cash generated from operating activities will continue to be sufficient to meet our annual operating requirements. Failure to obtain replacement financing would have a material adverse effect on our business operations and would raise doubt in regards to our ability to continue our normal business operations.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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