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Long-Term Debt
12 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
Long-Term Debt

9. LONG-TERM DEBT

Long-term debt consisted of the following:

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

CARES Act Paycheck Protection Plan Loans

 

$

3,234

 

 

$

0

 

Trace RDA Loan

 

 

0

 

 

 

2,999

 

Capital lease obligations

 

 

124

 

 

 

159

 

Total

 

 

3,358

 

 

 

3,158

 

Less unamortized debt costs

 

 

0

 

 

 

(195

)

Less current maturities

 

 

(1,401

)

 

 

(2,836

)

 

 

$

1,957

 

 

$

127

 

 

CARES Act Paycheck Protection Plan Loans— The CARES Act was enacted by the U.S. government on March 27, 2020. As part of the CARES Act, the PPP loan program was established and administered by the SBA. In April and May 2020, subsidiaries of the Company received approximately $3,234 of PPP loans through its regular bank. Forgiveness of PPP loans may be available if the loans are used to pay wages, rent, utilities and interest on certain debt during the eight-week period following receipt of the loan proceeds and subject to other Federally-established terms and conditions. During July 2020, the period for loan proceeds use was amended to allow for a 24-week period. The borrowing subsidiaries must apply for loan forgiveness with the bank within ten months after the allowable use period. The forgiveness applications will be reviewed by both the lending bank and SBA and a loan forgiveness amount, if any, will be determined. There can be no assurance, however, that any of the PPP loans to us will be forgiven, or if forgiven, the amount of such forgiveness. Loan proceeds not forgiven are payable over two years at a 1% annual interest rate. Prior to the July amendment, the two-year loan repayment begins six months after the loan was funded by SBA.

Trace RDA Loan— Southern Health Corporation of Houston, Inc. (“Trace”)’ a wholly owned subsidiary of the Company, closed on a $9,975 Mortgage Loan Agreement (“Trace RDA Loan”) with a bank, dated as of July 5, 2012. During the year ended June 30, 2020, the Company paid the entire outstanding balance of the Trace RDA Loan, which was scheduled to be repaid in July 2027. The pre-payment was made with cash on hand. The Company recorded a non-cash loss on early extinguishment of debt relating to the pre-payment of $178 during the fiscal year ended June 30, 2020. The Trace RDA Loan had a term of 15 years with level monthly payments of principal and interest. The Trace RDA Loan interest rate was the prime rate (as published in the Wall Street Journal) plus 1% with a floor of 5.5%. The Trace RDA Loan was collateralized by real estate and equipment of Trace. The Trace RDA Loan contained various covenants, terms and conditions, including financial restrictions and limitations, and affirmative and negative covenants and is guaranteed by SunLink. At June 30, 2019, Trace was not in compliance with the debt service coverage, fixed charge coverage and funded debt to EBITDA ratios and the entire outstanding amount of the Loan was classified as a current liability.

 

Debt Commitments —Annual required payments of debt and contractual commitments for interest on long-term debt are shown in the following table. The interest rate on variable interest debt is calculated at the interest rate at June 30, 2020.

 

 

 

Debt

 

 

Interest

 

2021

 

$

1,401

 

 

$

45

 

2022

 

 

1,904

 

 

 

33

 

2023

 

 

39

 

 

 

2

 

2024

 

 

14

 

 

 

0

 

2025

 

 

0

 

 

 

0

 

2026 and after

 

 

0

 

 

 

0

 

Total

 

$

3,358

 

 

$

80