8. Long-Term Debt

12 Months Ended

Jun. 30, 2020

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

As of June 30, 2020 and 2019, long-term debt was $3,604,935 and $303,349, respectively. Long-term debt is primarily comprised of the mortgage loan on the Company's office and manufacturing facility in Tennessee maturing in 2021 and Paycheck Protection Program (the “PPP”) loan. 

On April 29, 2020, the Company entered into a promissory note (the “Note”) with Bank of the West to evidence a loan to the Company in the amount of $3,477,412 under the PPP established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), administered by the U.S. Small Business Administration (“SBA”).

In accordance with the requirements of the CARES Act, the Company expects to use the proceeds from the loan exclusively for qualified expenses under the PPP, including payroll costs, mortgage interest, rent and utility costs, as further detailed in the CARES Act and applicable guidance issued by the SBA. Interest will accrue on the outstanding balance of the Note at a rate of 1.00% per annum. The Company intends to apply for forgiveness of all amounts due under the Note, in an amount equal to the sum of qualified expenses under the PPP incurred during the 24 weeks following initial disbursement. Notwithstanding the Company's expected eligibility to apply for forgiveness, no assurance can be given that the Company will obtain forgiveness of all or any portion of amounts due under the Note.

Subject to any forgiveness granted under the PPP, the Note is scheduled to mature two years from the date of initial disbursement under the Note and is payable in monthly installments beginning 10 months after the completion of the 24 week covered period. The Note may be prepaid at any time prior to maturity without penalty. The Note contains customary provisions related to events of default, including, among others, failure to make payments, bankruptcy, breaches of representations, significant changes in ownership, and material adverse effects. The occurrence of an event of default may result in the collection of all amounts owing under the Note, and/or filing suit and obtaining judgment against us. The Company's obligations under the Note are not secured by any collateral or personal guarantees.

Long-term debt consists of the following as of June 30:

	2020			2019
6.44% promissory note secured by trust deed on real property, maturing January 2021, payable in monthly installments of $13,278	$	90,979		$	239,229
5.99% promissory note secured by a vehicle, payable in monthly installments of $833 through December 2020		4,914			14,311
5.01% promissory note secured by copier equipment, payable in monthly installments of $924 through October 2022		24,363			33,965
3.99% promissory note secured by equipment, payable in monthly installments of $247 through February 2023		7,267			9,886
3.97% promissory note secured by equipment, payable in monthly installments of $242 through February 2021		-			4,668
7.56% promissory note secured by copier equipment, payable in monthly installments of $166 through February 2020		-			1,290
1.00% Paycheck Protection Program promissory note maturing April 2022		3,477,412			-
		3,604,935			303,349
Less current portion		(108,713	)		(173,921	)
	$	3,496,222		$	129,428

The aggregate maturities of long-term debt for each of the years subsequent to June 30, 2020 are as follows:

2021	$	108,713
2022		3,490,860
2023		5,362
Total	$	3,604,935