Financing Arrangements |
6 Months Ended |
---|---|
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 6. Financing Arrangements
The Company has a credit facility that provides for a $2,500,000 revolving line of credit through December 18, 2025, if not renewed before such date. There was outstanding principal balance on the line of credit as of December 31, 2023, or June 30, 2023. Interest on borrowings under the line of credit, if any, accrues at the prime rate (8.50% on December 31, 2023) less 1.00% and is payable monthly. The amount eligible for borrowing on the line of credit is limited to the lesser of $2,500,000 or 57.00% of eligible accounts receivable. On December 31, 2023, the maximum $2,500,000 was eligible for borrowing. Payment obligations under the line of credit, if any, are secured by a security interest in substantially all the tangible and intangible assets of the Company.
The documents governing the line of credit contain certain financial and non-financial covenants that include a minimum tangible net worth covenant of not less than $10,125,000 and restrictions on the Company’s ability to incur certain additional indebtedness or pay dividends. |