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Note 11 - Debt

12 Months Ended

Jun. 30, 2025

Note 11 - Debt

On June 20, 2025, the Company and certain of its subsidiaries entered into Eclipse Amendment No. 6, which provided for among other things, an increase in the Eclipse Term Loan principal amount of $13.0 million on the closing date of the Eclipse Amendment No. 6 and an extension of the maturity date of the Eclipse Term Loan to June 12, 2029, as well as certain amendments to the Eclipse Revolving Loan described further in Note 10 - Revolving Credit Facility.

The Eclipse Term Loan incurs interest at a rate of the SOFR plus 7.0%, with a four-year term maturing, as amended, on June 12, 2029, and a straight-line loan amortization period of seven years, which would provide for a loan balance at the end of the four-year term of $5.6 million to be repaid on the maturity date of June 12, 2029. The Company used proceeds from the Eclipse Term Loan and a portion of the proceeds from the exercise of warrants to repay a $15.0 million term loan in full, which resulted in the Company recording a loss on extinguishment of debt of $0.6 million in the fourth quarter of fiscal 2024. The Company incurred interest expense on the $15.0 million term loan including debt discount amortization of $3.4 million for the year ended June 30, 2024.

In the event that, for any reason, all or any portion of the Eclipse Agreement is terminated prior to the scheduled maturity date, in addition to the payment of all outstanding principal and unpaid accrued interest, the Company is required to pay a fee equal to (i) 3.0% of the Eclipse Term Loan if such event occurs on or before June 12, 2026, (ii) 2.0% of the Eclipse Term Loan if such event occurs after June 12, 2026, but on or before June 12, 2027, (iii) 1.0% of the Eclipse Term Loan if such event occurs after June 12, 2027, but on or before June 12, 2028, and (iv) 0.5% of the Eclipse Term Loan if such event occurs after June 12, 2028, but on or before June 12, 2029. The Company may also be required to pay an early termination fee related to the Eclipse Revolving Loan as further described in Note 10 - Revolving Credit Facility. The Company may permanently terminate the Eclipse Agreement upon written notice to Eclipse. The Company’s obligations under the Eclipse Agreement are secured by substantially all of the Company’s assets, as further defined in the Eclipse Agreement.

The Eclipse Agreement contains customary affirmative covenants, negative covenants and events of default, as defined in the Eclipse Agreement, including covenants and restrictions that, among other things, require the Company to satisfy certain capital expenditure limitations and other financial covenants, and restricts the Company’s ability to incur liens, incur additional indebtedness, make certain dividends and distributions with respect to equity securities, engage in mergers and acquisitions or make certain asset sales without the prior written consent of the Eclipse Lender. A failure to comply with these covenants could permit the Eclipse Lender to declare the Company’s obligations under the agreement, together with accrued interest and fees, to be immediately due and payable, plus any applicable additional amounts relating to a prepayment or termination, as described above. As of June 30, 2025, the Company was in compliance with the covenants under the Eclipse Agreement.

The Company recorded debt discount and allocated debt issuance costs of less than $0.1 million to the Eclipse Term Loan as a result of Eclipse Amendment No. 6, bringing to the total unamortized debt discount and debt issuance costs related to the Eclipse Term Loan as of June 30, 2025, to $0.2 million, which will be amortized over the term of the loan. The Company incurred interest expense on the Eclipse Term Loan, including debt discount and issuance costs amortization of $1.5 million and $0.1 million for the years ended June 30, 2025, and 2024, respectively. The effective interest rate on the Eclipse Term Loan was 11.4% as of June 30, 2025.

Debt consists of the following:

	*June 30,*
	*2025*			*2024*
	(in thousands)
Term loan principal amount	$	13,000		$	13,000
Unamortized debt discount and issuance costs		(248	)		(266	)
Total debt		12,752			12,734
Less: current portion of debt		(1,857	)		(1,857	)
Total debt, net of current portion	$	10,895		$	10,877

Future principal payments of debt are as follows:

	*June 30,*
	(in thousands)
2026	$	1,857
2027		1,857
2028		1,857
2029		7,429
Total future principal payments		13,000
Less: unamortized debt discount and issuance costs		(248	)
Less: current portion of debt		(1,857	)
Total debt, net of current portion	$	10,895