Note 10 - Debt and Commitments

During fiscal 2013, the Company borrowed from its investment margin account the aggregate purchase price of $29.5 million for two acquisitions, in each case pledging its marketable securities as collateral. In addition, there were subsequent borrowings of $45.5 million to purchase additional marketable securities bringing the margin loan balance up to $75 million during fiscal 2023. In March 2024, the Company sold a portion of its marketable securities for approximately $40.6 million and used these proceeds and excess cash from operations to pay down the margin loan balance to $27.5 million at last year-end. During the past fiscal quarter ended March 31, 2025, the Company was able to use excess cash from operations to pay down an additional $2.5 million of this margin loan reducing the balance to $25 million.

The interest rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 50 basis points with interest only payable monthly. The interest rate as of March 31, 2025 was approximately 5%. These investment margin account borrowings do not mature.

In November 2015, the Company purchased a 30,700 square foot office building constructed in 1998 on about 3.6 acres in Logan, Utah that had been previously leased for Journal Technologies. The Company paid $1.24 million and financed the balance with a real estate bank loan of $2.26 million which had a fixed interest rate of 4.66%. This loan is secured by the Logan facility and can be paid off at any time without prepayment penalty. In October 2020, the Company executed an amendment to lower the interest rate of this loan to a fixed rate of 3.33% for the remaining 10 years. This real estate loan had a balance of approximately $1.04 million as of March 31, 2025. Each monthly installment payment is approximately $16,700.

The Company owns its facilities in Los Angeles, California. The Company also leases space for its other offices under operating leases which expire at various dates through May 2026.

The Company is responsible for a portion of maintenance, insurance and property tax expenses relating to the leased properties. Rental expenses, inclusive of these expenses, for the six months ended March 31, 2025 and 2024 were $157,000 and $141,000, respectively. For the three months ended March 31, 2025 and 2024, rental expenses were $91,000 and $71,000, respectively.

Effective January 1, 2023, the Company began sponsoring a 401(k) retirement plan and a non-qualified deferred compensation plan for its employees. The 401(k) retirement plan is a defined contribution plan available to employees meeting minimum service requirements. Eligible employees can contribute up to 100% of their current compensation to the plan subject to certain statutory limitations. The Company matches 50% of the 401(k) contribution up to 4% of total compensation. Employer contributions to the retirement plan were $334,000 and $332,000 for the six months ended March 31, 2025 and 2024, respectively. Employer contributions for the three months ended March 31, 2025 and 2024 were $159,000 and $156,000, respectively. As of March 31, 2025, there were deferred compensation liabilities of approximately $1,015,000 of which $980,000 were held under a trust account for the non-qualified deferred compensation plan. There were deferred compensation liabilities of approximately $509,000 which were all held under a trust account for the non-qualified deferred compensation plan in the prior fiscal year period.