Quarterly report pursuant to Section 13 or 15(d)

Debt

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Debt
 9 Months Ended
Mar. 31, 2012
Debt Disclosure [Abstract]  
Debt Disclosure Text Block
Debt
Long term debt relates to a $1.7 million note payable issued in January 2011. This note will be fully amortized in June 2014, and the outstanding principal as of March 31, 2012, and June 30, 2011, consisted of the following:
 
March 31, 2012
 
June 30, 2011
 
(In thousands)
Note payable
$
1,002

 
$
1,422

Less current portion of note payable
(504
)
 
(552
)
Long term debt, excluding current portion
$
498

 
$
870


As of March 31, 2012, the minimum future principal maturities of long term debt were as follows:
 
March 31, 2012
 
(In thousands)
One year
$
504

Two years
411

Three years
87

Total
$
1,002


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 March 31, 2012, resulting in an interest rate of 6.25% per annum as of March 31, 2012. Under the note payable, NP is required to maintain certain customary financial and restrictive covenants. As of March 31, 2012, NP was in compliance with all financial and restrictive covenants. 
In addition, 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 $0.7 million and $500 at March 31, 2012, and June 30, 2011, respectively. The line of credit bears interest at a variable rate, which was 6.25% as of March 31, 2012. The line of credit also secures both a letter of credit in the amount of $25 thousand in favor of the Bureau of Land Management and business credit cards in the amount of $25 thousand. As of March 31, 2012, $0.3 million was available under this line of credit.
The note payable, letters of credit, and business credit cards are collateralized by a first mortgage and an assignment of production for Poplar and are guaranteed by Magellan 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, due to the variable rate, which resets based on the market rates.