Debt Disclosure Text

3 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

Note 7. Debt

In February 2021, we entered into an amendment to our existing Loan and Security Agreement (Loan Agreement) with a third-party financial institution. Under the terms of the amended Loan Agreement, the bank extended a revolving line of credit (Revolver) whereby the borrowing base is comprised of eligible accounts receivable and direct to consumer deposits. Borrowings may not exceed $6.5 million and are reduced by a $0.4 million standby letter of credit entered into with the bank in connection with certain lease agreements. Advances bear interest at a rate equal to one-half of one percentage point (0.5%) above the greater of the prime rate or 3.25%. The Loan Agreement contains customary covenants, including financial covenants, minimum EBITDA levels to be updated annually, and maintaining a minimum balance of $1.5 million unrestricted cash at the bank. Effective August 1, 2022, the Revolver was extended to August 1, 2024.

We paid and capitalized $0.6 million of financing fees to enter into the Revolver in August 2019, and the financing fees which were amortized over the original term of the credit agreement, which ended on August 1, 2022.