Note 14 - Subsequent Events

12 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 14 – Subsequent Events

Effective July 24, 2013, we entered into new credit facilities with two lenders, Salus and King Trade.

In connection with the entry into these credit arrangements, we also entered into agreements with two significant licensors and three significant vendors to address outstanding accounts payable owed to these parties. Generally, the arrangements with these parties consist of the agreement (i) to pay a portion of the outstanding amount owed within specified time periods following the closing of the Credit Facility, and (ii) to pay the remainder of the outstanding amounts pursuant to unsecured, subordinated promissory notes. The aggregate amount financed through the use of the unsecured, subordinated promissory notes is $8.9 million and such notes bear interest at varying interest rates. Although the individual notes contain varying payment terms, the final principal and interest under such notes is due either July 15, 2014 or July 15, 2015.

On August 27, 2013 we announced the appointment of Roger R. Hemminghaus, a director since June 2000 and our lead independent director, as Chief Executive Officer and Chairman and a new plan of responsibilities for existing members of the management team, both of which were in response to the resignation of Rod McGeachy, our previous Chairman, Chief Executive Officer and President.

In connection with our March 2013 restructuring plan we ceased development and marketing of gifts under the Sharper Image® license and recognized all future obligations ($895,000) as set forth in the original license agreement.  In August 2013, we entered into a settlement agreement for the Sharper Image® license in which we would pay $350,000 to settle all remaining contractual obligations and terminate the license.  As a result of this settlement, we recognized a gain of $545,000 during first quarter fiscal 2014.

On September 26, 2013 we, along with our subsidiaries, H.A. Sheldon Canada, Ltd. and TBAC Investment Trust, and our senior lender Salus Capital Partners LLC, entered into a First Amendment to Credit Agreement, dated July 24, 2013 (the “Amendment”).  Pursuant to the Amendment, our lender formally waived the going concern qualification in the audit report as an event of default, our failure to satisfy a minimum availability requirement for certain weeks, and extended the time period to deliver certain post-close deliverables.