NOTES PAYABLE AND FINANCING TRANSACTIONS

3 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

NOTES PAYABLE AND FINANCING TRANSACTIONS

NOTE 10. NOTES PAYABLE AND FINANCING TRANSACTIONS

Minnesota Bank & Trust (“MBT”)

As previously disclosed, we have several outstanding term loans as well as a revolving loan (the “Amended Revolving Loan”) with MBT. Additionally, on July 31, 2024 (the “Fourth Amendment Date”), we entered into Amendment No. 4 to our Amended and Restated Credit Agreement (the “Fourth Amendment”) with MBT which amends the Company’s Amended and Restated Credit Agreement. The Fourth Amendment (i) provides for a new term loan, Term Loan C, in the amount of $5.0 million, (ii) uses the proceeds from Term Loan C to repay the entire $3.0 million balance that was outstanding on the Fourth Amendment Date under the Amended Revolving Loan, and (iii) terminates our Supplemental Loan, under which no amounts had been drawn. Loan origination fees in the amount of $10,000 were paid to MBT in conjunction with Term Loan C.

The balance on our outstanding loans (in thousands) is as follows (exclusive of unamortized loan fees):

	September 30, 2024		June 30, 2024
Notes Payable:
Term Loan A	$	3,579	$	3,834
Term Loan B		533		571
Term Loan C		4,916		—
Property Loan		4,501		4,551
Amended Revolving Loan		—		3,000
Total notes payable	$	13,529	$	11,956

Term Loan A and B both bear interest at a fixed rate of 3.84% per annum, the Property Loan bears interest at a fixed rate of 3.55% per annum and both Term Note C and the Amended Revolving Loan bear interest at an annual rate equal to the greater of (a) 5%, or (b) SOFR for a one-month period from the website of the CME Group Benchmark Administration Limited plus 2.5% (the “Adjusted Term SOFR Rate”). Term Loan A and B are both fully amortizing and mature on November 1, 2027, Term Loan C is fully amortizing and matures on August 1, 2029, the Property Loan matures on November 1, 2030, at which time a balloon payment of $3.1 million is due, and the Amended Revolving Loan matures on December 29, 2025.

Any payment on Term Loan A, Term Loan B, Term Loan C, the Property Loan, or Amended Revolving Loan (collectively, the “Loans”) not made within seven days after the due date is subject to a late payment fee equal to 5% of the overdue amount. Upon the occurrence and during the continuance of an event of default, the interest rate of all Loans will be increased by 3% and MBT may, at its option, declare all of the Loans immediately due and payable in full. The Loans are secured by substantially all of the Company’s assets pursuant to a Security Agreement entered into on September 6, 2018, between the Company and MBT.

The Amended Credit Agreement, Amended Security Agreement, Term Note A, Term Note B, Term Note C, Property Note, and Amended Revolving Note contain representations and warranties, affirmative, negative and financial covenants, and events of default that are customary for loans of this type. We believe that we are in compliance with all of our debt covenants as of September 30, 2024, but there can be no assurance that we will remain in compliance for the duration of the term of these loans.