Note O - Subsequent Events

12 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Subsequent Events [Text Block]

O. Subsequent Events

On

August 18, 2021,

we entered into an amendment of our credit facility with Wells Fargo Bank, N.A.. The amended credit facility added a

$10.0

million term loan to the existing

$20.0

million credit facility, and permitted us to use the

$10.0

million term loan as part of the

$17.5

million purchase consideration for the acquisition of a manufacturing and warehouse property in Carlsbad California. In addition to the added borrowing capacity, the financial covenants included in the credit agreement were modified such that the ratio of total liabilities to tangible net worth is now required to be

not

greater than

1.50

to

1.0

at any time and now requires a rolling

4

-quarter fixed charge coverage ratio

not

less than

1.25

to

1.0

as of each fiscal quarter end. The amended credit agreement also increased the allowed capital expenditures for fiscal

2022

to increase from

$10.0

million to

$15.0

million (exclusive of amount paid for the acquisition of the property noted below). The Credit Agreement was amended and a new Revolving Line of Credit Note, Security Agreement, Term Note and real property security documents were added to the credit facility.

On

August 20, 2021,

we acquired a manufacturing and warehouse property in Carlsbad California from an unrelated party for

$17.5

million. We financed

$10.0

million of the purchase price through a term loan pursuant to our recently amended credit facility with Wells Fargo Bank, N.A. and paid the remainder of the purchase price and closing costs with our available cash. The approximately

54,154

square foot building includes environmentally controlled warehouse space, office and additional non-environmentally controlled warehouse space. We intend to retrofit a significant portion of the building into a dedicated high-volume powder blending and packaging facility. This new facility will also provide us with additional raw material storage capacity, and offices.

On

September 3, 2021,

we purchased

four

forward contracts designated and effective as cash flow hedges to protect against the foreign currency exchange risk inherent in a portion of our forecasted sales transactions denominated in Euros. The

four

contracts expire quarterly beginning

November 2022

and ending

August 2023.

The forward contracts have a notional amount of

€17.2

million and a weighted average forward rate of

1.1993.

On

September 18, 2021,

two

of our directors resigned without disagreement as to any matter regarding the Company, and only since they had served for many years, and for their personal and professional reasons determined it best for them and NAI for them to resign.

On

September 17, 2021,

the Board of Directors appointed Dr. Guru Ramanathan to a vacant seat on the Board of Directors, and determined to reduce the size of the Board of Directors from

six

to

four

members. Also on

September 17, 2021

the Board appointed Dr. Ramanathan to the Audit Committee, the Human Resources Committee, and the Nominating Committee, and appointed Laura Kay Matherly to the Nominating Committee.

Management has evaluated subsequent events through

September 20, 2021,

the date the Statements were available to be issued and there are

no

additional subsequent events that would require adjustment to or disclosure in the Statements.