Bank Term Loan and Line of Credit

On October 4, 2021, the Company entered into a Loan Agreement with Main Street Bank of Marlborough, Massachusetts (the “Lender”), which provided for a $2,600,000 Term Loan and a $250,000 Revolving Line of Credit Loan Facility (the “Revolver”), which was increased to $500,000 effective May 17, 2022, and $1,250,000 effective June 2, 2023. Borrowings under the Revolver are limited by the borrowing base comprised of a percentage of accounts receivable and inventory and secured by all assets of the Company. Borrowings under the Revolver will bear interest payable monthly at the prime lending rate plus 1.5% per annum and shall not be less than 4.75% per annum. Borrowings under the Revolver are due upon demand. There were no borrowings under the Revolver at June 30, 2025.

The Company’s Loan Agreement with the Lender contains a minimum annual debt service coverage ratio covenant of 1.2x. The Company did not meet this annual debt service coverage ratio for the fiscal year ended June 30, 2024. The Company’s Lender has agreed to waive compliance with such debt service ratio covenant for the period ending June 30, 2024. In addition to such waiver, the Lender and the Company have entered into an amendment dated September 30, 2024 to that certain Term Loan dated October 4, 2021, as amended and that certain Promissory Note dated June 2, 2023 (collectively, the “Notes”) which amendments provide for a six-month period of interest only payments from October 15, 2024 through March 15, 2025 for the Notes. The Company commenced payments of principal and interest under the Notes beginning with the payments due on April 15, 2025, with a new amortization schedule for the remaining term for such Notes through their maturity date. On February 14, 2025, the lender agreed to waive compliance with the annual debt service coverage ratio covenant for the fiscal year ending June 30, 2025, subject to a $30,000 waiver fee and the completion of an equity raise of at least $4,500,000 by February 24, 2025, which the Company satisfied on February 21, 2025. Any future advances are contingent on the Company achieving a minimum Debt Service Coverage ratio of 1.20x based on quarterly testing. There were no other changes to or modifications to the Loan Agreement or the Notes.

Long-Term Debt

Long-term debt consists of the following at June 30, 2025 and 2024:

At June 30, 2025 principal payments due on long-term debt are as follows:

In March 2021 the Company entered into a five-year capital lease in the amount of $161,977 and in January 2020, the Company entered into a five-year capital lease for $47,750, both for manufacturing equipment. The net book value of fixed assets under capital lease obligations as of June 30, 2025 is $27,368.

On July 1, 2019 the Company entered into a three-year operating lease for its facility in El Paso, Texas, and in February 2022 the Company entered into an extension of the lease for an additional three years through June 2025. In May 2025, this lease was extended for an additional three years through May 2028. Remaining minimum lease payments at June 30, 2025 total $148,029. Total lease costs including base rent and common area expenses was $67,552 and $64,621 during the fiscal years ended June 30, 2025 and 2024, respectively. On October 4, 2021 the Company assumed the remaining term of the Windham Maine lease as part of the Lighthouse acquisition. The lease expired on July 31, 2025. Remaining minimum lease payments at June 30, 2025 total $11,477. Total lease costs including base rent and common area expenses was $137,728 and $137,728 during the fiscal year ended June 30, 2025 and 2024, respectively. The amount of variable lease payments is immaterial. Included in the accompanying balance sheet at June 30, 2025 is a right-of-use asset of $141,825 and current and long-term right-of-use operating lease liabilities of $50,995 and $90,954, respectively.

On May 15, 2025 the Company entered into an seven-year lease in South Portland, Maine with two five-year extension options. On June 2, 2025 the Company entered into a seven-year operating lease in Littleton, Massachusetts with two five-year extension options.

As of June 30, 2025, the Company had entered into additional operating leases with total fixed payment obligations of $3.8 million that have not yet commenced. The leases are expected to commence in fiscal year 2026 and have initial lease terms of approximately 8 years.

At June 30, 2025 future minimum lease payments under the capital lease and operating lease obligations are as follows:

The Company’s four facilities in Gardner, Massachusetts, which are used for offices, production and storage spaces, are leased primarily on a tenant-at-will basis. Rent expense on these operating leases was $206,309 and $200,678 for the fiscal years ended June 30, 2025 and 2024, respectively.