Long-Term Debt

6 Months Ended

Dec. 31, 2024

Long-Term Debt [Abstract]

Long-Term Debt

9. Long-Term Debt

On June 26, 2024, Grafiti and Streeterville Capital, LLC (“Streeterville” or “Investor”) entered into a note purchase agreement, pursuant to which Grafiti agreed to sell, and Streeterville agreed to purchase, a secured promissory note in an aggregate original principal amount of $6,470,000 (the “Streeterville Note”). The Streeterville Note accrues interest on the outstanding balance of the note at the rate of 10% per annum, and all principal plus accrued interest is due and payable in December 2025. The Streeterville Note carries an original issue discount of $1,450,000 and $20,000 of issuance costs to cover legal, accounting, due diligence, monitoring and other transaction costs.

Starting on the earlier of 13 months after the closing of the Business Combination or January 1, 2026, the Investor may require the borrower to redeem up to one-sixth of the note’s initial principal and accrued interest monthly, and any unexercised redemption amounts can be carried over to future months. Grafiti has also agreed to not issue or sell any equity securities for capital raising purposes without the Investor’s prior consent.

Long-Term Debt as of December 31, 2024 consisted of the following:

Long-term debt:	Maturity	December 31, 2024		June 30, 2024
Streeterville Note (net of $1,157,515 and $450,059 unamortized debt discount and issuance costs)	12/26/2025	$	5,725,101	$	-
Total long-term debt		$	5,725,101	$	-

As of December 31, 2024, debt discount and issuance costs in the amount of $1,450,000 related to the Streeterville Note was recorded as a contra liability within long-term debt, which will be amortized over the term of the note.

Interest expense on long-term debt for the three and six months ended December 31, 2024 totaled $553,854 (three and six months ended September 30, 2023 - $nil), which was not paid and included in the long-term debt balance in the consolidated balance sheet as of December 31, 2024.