XML 40 R23.htm IDEA: XBRL DOCUMENT
v3.21.2

Loans Payable | 12 Months Ended
--- | ---
Jun. 30, 2021
Loans Payable [Abstract] |
Loans Payable | BankUnited Loans On February 26, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) with BankUnited for (i) a revolving line of credit up to maximum amount of $2,000,000 (the “BankUnited Revolving Line”), (ii) a term loan in the amount of up to $5,813,500 (“BankUnited Term Loan”), and (iii) a non-revolving guidance line of credit up to a maximum amount of $10,000,000 (the “Guidance Line” and, together with the BankUnited Revolving Line and BankUnited Term Loan, the “BankUnited Loans”). Each of the BankUnited Loans is evidenced by a promissory note in favor of BankUnited (the “BankUnited Notes”). On May 6, 2019, the Company entered into that certain First Amendment to Loan Agreement, effective February 26, 2019, with BankUnited (the “Amendment” and, together with the Loan Agreement, the “Amended Loan Agreement”). The Amendment amended the definition of the fixed charge coverage ratio to more accurately reflect the parties’ understandings at the time the Loan Agreement was executed. On September 9, 2021, the Company entered into a letter agreement with BankUnited (the “Letter Agreement”). The Letter Agreement: (i) reduces the fixed charge coverage ratio to 1.0 for the quarter ending September 30, 2021 and to 1.1 for the quarter ended December 31, 2021; (ii) modifies the calculation for both the fixed charge coverage ratio and the total leverage ratio to provide for adjustments related to expenses incurred in connection with the events at LPOI and LPOIZ, which expenses must be approved by BankUnited; (iii) terminates the Guidance Line; and (iv) requires approval from BankUnited prior to our being able to draw upon the Revolving Line, subject to our compliance with the fixed charge coverage ratio for the quarters ending September 30, 2021 and December 31, 2021. The Letter Agreement also granted the Company a waiver of default arising prior to the Letter Agreement for its failure to comply with the fixed charge coverage ratio measured on June 30, 2021. Based on the waiver, the Company no longer in default of the Amended Loan Agreement. Finally, in connection with the Letter Agreement, the Company paid BankUnited a fee equal to $10,000. BankUnited Revolving Line Pursuant to the Amended Loan Agreement, BankUnited will make loan advances under the BankUnited Revolving Line to the Company up to a maximum aggregate principal amount outstanding not to exceed $2,000,000, which proceeds will be used for working capital and general corporate purposes. Pursuant to the Letter Agreement, advances from the BankUnited Revolving Line will require specific lender approval, which will not be granted in the absence of compliance with all applicable covenants, as amended. Amounts borrowed under the BankUnited Revolving Line may be repaid and re-borrowed at any time prior to February 26, 2022, at which time all amounts will be immediately due and payable. The advances under the BankUnited Revolving Line bear interest, on the outstanding daily balance, at a per annum rate equal to 2.75% above the 30-day LIBOR. Interest payments are due and payable, in arrears, on the first day of each month. As of June 30, 2021, the applicable interest rate was 2.84% and there were no amounts outstanding under the BankUnited Revolving Line. BankUnited Term Loan Pursuant to the Amended Loan Agreement, BankUnited advanced the Company $5,813,500 to satisfy in full the amounts owed to Avidbank and to pay the fees and expenses incurred in connection with closing of the BankUnited Loans. The BankUnited Term Loan is for a 5-year term, but co-terminus with the BankUnited Revolving Line should the BankUnited Revolving Line not be renewed beyond February 26, 2022. Management expects the BankUnited Revolving Line to be renewed. The BankUnited Term Loan bears interest at a per annum rate equal to 2.75% above the 30-day LIBOR. Equal monthly principal payments of $48,445.83, plus accrued interest, are due and payable, in arrears, on the first day of each month during the term. Upon maturity, all principal and interest shall be immediately due and payable. As of June 30, 2021, the applicable interest rate was 2.84% and the outstanding balance on the BankUnited Term Loan was approximately $4.5 million. Guidance Line Prior to the Letter Agreement, the Amended Loan Agreement provided that BankUnited, in its sole discretion, could make loan advances to the Company under the Guidance Line up to a maximum aggregate principal amount outstanding not to exceed $10,000,000, which proceeds could have been used for capital expenditures and approved business acquisitions. Such advances were required to be in minimum amounts of $1,000,000 for acquisitions and $500,000 for capital expenditures, and would be limited to 80% of cost or as otherwise determined by BankUnited. Amounts borrowed under the Guidance Line could not be re-borrowed. The advances under the Guidance Line would bear interest, on the outstanding daily balance, at a per annum rate equal to 2.75% above the 30-day LIBOR. Interest payments would be due and payable, in arrears, on the first day of each month. On each anniversary of the Amended Loan Agreement, monthly principal payments would become payable, amortized based on a ten-year term. There were no amounts outstanding under the Guidance Line at June 30, 2021. The Guidance Line was terminated after the end of fiscal 2021 in accordance with the Letter Agreement. Security and Guarantees The Company’s obligations under the Amended Loan Agreement are collateralized by a first priority security interest (subject to permitted liens) in all of its assets and the assets of the Company’s U.S. subsidiaries, GelTech, and ISP, pursuant to a Security Agreement granted by GelTech, ISP, and the Company in favor of BankUnited. The Company’s equity interests in, and the assets of, its foreign subsidiaries are excluded from the security interest. In addition, all of the Company’s subsidiaries have guaranteed the Company’s obligations under the Amended Loan Agreement and related documents, pursuant to Guaranty Agreements executed by the Company and its subsidiaries in favor of BankUnited. General Terms The Amended Loan Agreement contains customary covenants, including, but not limited to: (i) limitations on the disposition of property; (ii) limitations on changing the Company’s business or permitting a change in control; (iii) limitations on additional indebtedness or encumbrances; (iv) restrictions on distributions; and (v) limitations on certain investments. The Amended Loan Agreement also contains certain financial covenants, including obligations to maintain a fixed charge coverage ratio of 1.25 to 1.00 and a total leverage ratio of 4.00 to 1.00. The Letter Agreement granted the Company a waiver of default arising prior to the Letter Agreement from its failure to comply with the fixed charge coverage ratio measured on June 30, 2021. Based on the waiver, the Company is no longer in default of the Amended Loan Agreement. As of June 30, 2021, the Company was in compliance with all other covenants. We may prepay any or all of the BankUnited Loans in whole or in part at any time, without penalty or premium. Late payments are subject to a late fee equal to five percent (5%) of the unpaid amount. Amounts outstanding during an event of default accrue interest at a rate of five percent (5%) above the 30-day LIBOR applicable immediately prior to the occurrence of the event of default. The Amended Loan Agreement contains other customary provisions with respect to events of default, expense reimbursement, and confidentiality. Financing costs related to the BankUnited Loans were recorded as a discount on debt and are being amortized over the term. Amortization of approximately $19,000 is included in interest expense for each the years ended June 30, 2021 and 2020. In December 2020, ISP Latvia entered into an equipment loan with a third party (the “Equipment Loan”), which party is also a significant customer, and which the Equipment Loan is subordinate to the BankUnited Loans, and collateralized by certain equipment. The initial advance under the Equipment Loan was 225,000 EUR (or USD $275,000), payable in equal installments over 60 months, the proceeds of which were used to make a prepayment to a vendor for equipment to be delivered at a future date. The Equipment Loan bears interest at a fixed rate of 3.3%. An additional 225,000 EUR (or USD $275,000) is expected to be drawn when the final payment is due to the vendor for the equipment. Future maturities of loans payable are as follows:
|  | BankUnited Term Loan |  |  | Equipment Loan |  |  | Unamortized Debt Costs |  |  | Total |
Fiscal year ending: |  |  |  |  |  |  |  |  |  |  |  |
June 30, 2022 |  | $ | 581,350 |  |  | $ | 55,075 |  |  |  | (18,572 | ) |  | $ | 617,853 |
June 30, 2023 |  |  | 581,350 |  |  |  | 55,075 |  |  |  | (18,572 | ) |  |  | 617,853 |
June 30, 2024 |  |  | 3,342,763 |  |  |  | 55,075 |  |  |  | (12,382 | ) |  |  | 3,385,456 |
June 30, 2025 |  |  |  |  |  |  | 55,075 |  |  |  | - |  |  |  | 55,075 |
After June 30, 2025 |  |  |  |  |  |  | 15,974 |  |  |  | - |  |  |  | 15,974 |
Total payments |  | $ | 4,505,463 |  |  | $ | 236,274 |  |  | $ | (49,526 | ) |  |  | 4,692,211 |
Less current portion |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (634,846 | )
Non-current portion |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,057,365 |

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_LoansPayableAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration