Note 4 - Senior Credit Facility

9 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Debt Disclosure [Text Block]

Note 4. Senior Credit Facility and Lines of Credit

As of April 15, 2025, the Company paid off its outstanding obligations under its Senior Credit Facility, terminating the Credit Facility and entered into a Loan Agreement (the “Loan Agreement”) with PNC Bank, National Association (“PNC”).  As of March 31, 2025 and June 30, 2024, the Company had no debt outstanding under its Senior Credit Facility.

Loan Agreement

The Loan Agreement provides a committed revolving line of credit under which the Borrower may request and PNC will make advances to the Borrower from time to time until April 5, 2026, (the "Expiration Date"), in an aggregate amount outstanding at any time not to exceed $4,000 (the "Line of Credit") and a Convertible Equipment Line of Credit in an aggregate amount outstanding at any time not to exceed $500 (the "Convertible ELOC").  Advances under the Convertible ELOC will be used for the purchase of equipment and/or vehicles.

The Line of Credit bears interest at a rate per annum which is equal to the sum of (A) Daily one-month SOFR plus (B) 250 basis points (2.50%). Accrued interest will be due and payable on the same day of each month, beginning with the payment due on May 15, 2025. The outstanding principal balance and any accrued but unpaid interest shall be due and payable on the Expiration Date.

Prior to any Conversion Date, amounts outstanding under the Convertible ELOC will bear interest at a rate per annum (the "Daily Rate”) equal to the sum of (i) Daily one-month SOFR plus (ii) 250 basis points (2.50%) and from and after the Conversion Date, amounts outstanding under this Convertible ELOC will bear interest for the remaining term at either: (i) a rate per annum equal to the Daily Rate; or (ii) a fixed rate of interest per annum as offered to the Borrower by PNC in its sole discretion and agreed upon in writing between the Borrower and PNC.

The Company also entered into a Reimbursement Agreement for Standby and Commercial Letter(s) of Credit whereby, from time to time, the Borrower may request the issuance of one or more letters of credit (each a "Credit").  The Credit bears interest at the same rate as the Line of Credit under the Loan Agreement as described above.

In addition, in connection with the Loan Agreement, the Company and MDC (collectively, the "Grantors") each entered into a Security Agreement with PNC, pursuant to which each of the Grantors assigned and granted to PNC, as secured party, a continuing lien on and security interest in all right, title and interest of such Grantor in, to, and under all of the assets of such Grantor.

Senior Credit Facility

On April 15, 2025, the Company, MDC, AgroLabs, IHT, IHT Properties Corp. (“IHT Properties”) and Vitamin Factory (collectively, the “Borrowers”) terminated the Revolving Credit, Term Loan and Security Agreement (the “Amended Loan Agreement”) with PNC Bank, National Association as agent and lender (“PNC”) and the other lenders party thereto entered into on June 27, 2012, as amended on February 19, 2016, May 15, 2019, June 28, 2019, March 16, 2023 and May 9, 2024.

The Amended Loan Agreement provided for a total of $5,000 in senior secured financing (the “Senior Credit Facility”) as follows: (i) discretionary advances (“Revolving Advances”) based on eligible accounts receivable and (ii) eligible inventory in the maximum amount of $5,000 (the “Revolving Credit Facility”).  The Senior Credit Facility was secured by all assets of the Borrowers, including, without limitation, machinery and equipment, and real estate owned by IHT Properties.  Revolving Advances bore interest at PNC’s Base Rate (7.50% and 8.50% as of March 31, 2025 and June 30, 2024, respectively) or the Term SOFR Rate plus the SOFR Adjustment. The Term SOFR Rate, for any day, shall be equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate). The SOFR Adjustment is defined as 10 basis points (0.10%). 

Upon and after the occurrence of any event of default under the Amended Loan Agreement, and during the continuation thereof, interest was payable at the interest rate then applicable plus 2%.  The Senior Credit Facility was paid off on April 15, 2025, prior to its maturity date of May 15, 2026 (the “Senior Maturity Date”).

The principal balance of the Revolving Advances was payable on the Senior Maturity Date, (i) subject to acceleration, based upon a material adverse event clause, as defined in the Amended Loan Agreement, (ii) subject to accelerations for borrowing base reserves, as defined in the Amended Loan Agreement, (iii) upon the occurrence of any event of default under the Amended Loan Agreement or (iv) upon the earlier termination of the Amended Loan Agreement pursuant to the terms thereof.

The Revolving Advances were subject to the terms and conditions set forth in the Amended Loan Agreement and were made in aggregate amounts at any time equal to the lesser of (x) $5,000 or (y) an amount equal to the sum of: (i) up to 85%, subject to the provisions in the Amended Loan Agreement, of eligible accounts receivables (“Receivables Advance Rate”), plus (ii) up to the lesser of (A) 75%, subject to the provisions in the Amended Loan Agreement, of the value of the eligible inventory (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), (B) 85% of the appraised net orderly liquidation value of eligible inventory (as evidenced by the most recent inventory appraisal reasonably satisfactory to PNC in its sole discretion exercised in good faith) and (C) the inventory sublimit in the aggregate at any one time (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), minus (iii) the aggregate Maximum Undrawn Amount, as defined in the Amended Loan Agreement, of all outstanding letters of credit, minus (iv) such reserves as PNC reasonably deemed proper and necessary from time to time.

In connection with the Senior Credit Facility, the following loan documents were executed: (i) a Stock Pledge Agreement with PNC, pursuant to which the Company pledged to PNC the shares of common stock that it owned of iBio, Inc.; (ii) a Mortgage and Security Agreement with PNC and IHT Properties; and (iii) an Environmental Indemnity Agreement with PNC.