Annual report pursuant to Section 13 and 15(d)

Factoring Agreement

Factoring Agreement
12 Months Ended
Dec. 31, 2018
Factoring Agreement [Abstract]  
Factoring Agreement

7. Factoring Agreement


On June 15, 2016 the Company entered into a factoring agreement with CSNK Working Capital Finance Corp. (d/b/a Bay View Funding) (“Bay View”) whereby it sells select accounts receivable with recourse.


Under the terms of the agreement, Bay View may make advances to the Company of amounts representing up to 80% of the net amount of eligible accounts receivable. The factor facility was collateralized by a general security agreement over all the Company’s personal property and interests. Fees paid to Bay View for factored receivables are 1.80% for the first 30 days and is and 0.65% for every ten days thereafter, to a maximum of 90 days total outstanding. The Company bears the risk of credit loss on the receivables. These receivables are accounted for as a secured borrowing arrangement and not as a sale of financial assets.


Factor expense of $718 and $391 for the years ended December 31, 2018 and 2017 respectively, is recorded as interest expense in other expense on the consolidated statements operations and comprehensive loss. The amount of the factored receivables outstanding was $2,434 and $1,816 as of December 31, 2018 and 2017, respectively. There was $566 and $1,184 available for future advances as of December 31, 2018 and 2017 respectively.