Quarterly report pursuant to Section 13 or 15(d)

Debt

v2.4.0.6
Debt
 3 Months Ended 6 Months Ended
Dec. 31, 2011
Dec. 31, 2011
Debt Disclosure [Abstract]    
Debt Disclosure Text Block
                December 31, 2011   June 30, 2011
                         
Note payable               $ 1,134,438   $ 1,422,438
Less current portion of note payable                 528,000     552,000
Long-term debt, excluding current portion               $ 606,438   $ 870,438
                         

Note 17 Debt

Long-term debt relates to a note payable with monthly installments of varying amounts, plus interest at 6.25%, through June 25, 2014. As of December 31, 2011 and June 30, 2011 long-term debt consisted of the following:

As of December 31, 2011 the minimum future principal maturities of long-term debt were as follows:

                December 30, 2011    
One year               $ 528,000      
Two years                 432,000      
Three years                 174,438      
Total               $ 1,134,438      
                         

The variable rate of the note is based upon the Wall Street Journal Prime Rate (the “index”) plus 3.00%, subject to a floor rate of 6.25%. The index was 3.25% at December 31, 2011, resulting in an interest rate of 6.25% per annum as of December 31, 2011. Under the note payable, NP is required to maintain certain customary financial and restrictive covenants. As of December 31, 2011, NP was in compliance with all financial and restrictive covenants.

 

The Company has a $1.0 million working capital line of credit classified as short term debt. The amount due on the line of credit was $775,000 and $500 at December 31, 2011, and June 30, 2011, respectively. The line of credit bears interest at a variable rate, being 6.50% as of December 31, 2011. The line of credit also secures two letters of credit in the amount of $25,000 each, one in favor of the Bureau of Land Management and another secures a business credit card. As of December 31, 2011, $175,000 was available under this line of credit.

The note payable, letters of credit and business credit card are collateralized by a first mortgage and an assignment of production for Poplar and are guaranteed by MPC up to $6.0 million, not to exceed the amount of the principal owed.

The carrying amount of the Company's long term debt approximates its fair value, because of the variable rate, which resets based on the market rates.