| SECURED NOTES PAYABLE |
NOTE 12. SECURED NOTES PAYABLE During fiscal 2026, the Company reclassified two notes payable outstanding at June 30, 2025, with an aggregate carrying amount of $453, from unsecured notes payable to secured notes payable to conform to the current year presentation, reflecting that the notes are secured on a subordinated basis by inventory and accounts receivable. The June 30, 2025 comparative amounts present $344 as current secured notes payable and $109 as long-term secured notes payable. The reclassification had no effect on total current liabilities, total liabilities, net loss, shareholders’ equity or cash flows for any period presented. Secured notes payable at June 30, 2026 and June 30, 2025, consisted of the following: | | June 30 | | | June 30 | | | | 2026 | | | 2025 | | | | (in thousands) | | Secured notes payable to third party, with 18% interest, due March 26, 20277 (1) | | | 93 | | | | 121 | | Secured notes payable to third party, with 19.2% interest, due July 3, 2026 (2) | | | 5 | | | | 223 | | Secured notes payable to third party, with 19.2% interest, due October 23, 2026 (3) | | | 83 | | | | - | | Total current secured notes payable | | $ | 181 | | | $ | 344 | | | | | | | | | | | Secured notes payable to third party, with 18% interest, due March 26, 2027 (1) | | | - | | | | 93 | | Secured notes payable to third party, with 19.2% interest, due July 3, 2026 (2) | | | - | | | | 16 | | Secured notes payable to third party, with 19.2% interest, due October 23, 2026 (3) | | | - | | | | - | | Total long-term secured notes payable | | $ | - | | | $ | 109 | | Total secured notes payable | | $ | 181 | | | $ | 453 | |
| (1) | On March 25 2025, the Company entered into a secured note payable in the amount of $250,000 with a monthly payment of $12,485 with 24-months term at an imputed monthly interest rate of 1.5%. At the end of fiscal 2025, this note was presented as an unsecured note payable and has been reclassified to secured notes payable. It is subordinated secured by inventory and accounts receivable. | | | | | (2) | On June 4, 2025, the Company entered into a secured note payable in the amount of $250,000 with a lender. The note is paid back on a weekly basis in the amount of $5,366 for fifty six payments concluding on July 3, 2026. The note is personally guaranteed by the Company’s CEO and principal shareholder. At the end of fiscal 2025, this note was presented as an unsecured note payable and has been reclassified to secured notes payable. It is subordinated secured by inventory and accounts receivable. | | | | | (3) | On September 26, 2025, the Company entered into a secured note payable in the amount of $250,000 with a lender. The note is paid back on a weekly basis in the amount of $5,366 for fifty six payments concluding on October 23, 2026. The note is personally guaranteed by the Company’s CEO and principal shareholder. It is subordinated secured by inventory and accounts receivable. |
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