Long-term Debt

12 Months Ended

Jun. 30, 2012

8. LONG-TERM DEBT

As of June 30, 2012, the Company’s facility is financed by a twenty-five year mortgage note bearing a five year fixed interest rate of 6.75%, and then reset every five years at 2.75% over the then New York Federal Home Loan Bank 5/20 Amortizing Advance Rate. The mortgage is secured by the real estate and improvements, accounts receivables, inventory and all rents from leases subsequently entered into, amortized with monthly payments. As of June 30, 2012, the book value of the real estate and improvements was $2,165,985.

As a result of the net losses for the years ended June 30, 2011 and June 30, 2012, the Company did not meet certain financial covenants required under the loan document. Loan modifications and/or covenant waivers were issued by the lender during each year.

Although waivers/modifications were granted by the lender, there is no certainty that future waivers/modifications would be granted.

Long-term debt is comprised of the following:

	June 30,
	2012			2011
Mortgage note	$	2,712,138		$	2,766,537
Less: Current Maturities		(55,899	)		(51,720	)
Long-term Debt, Net of Current Maturities	$	2,656,239		$	2,714,817

Maturities of the long-term debt are as follows:

Year ending June 30		As of June 30, 20111
	2013	$	55,899
	2014		59,847
	2015		64,074
	2016		68,119
	2017		73,410
	Thereafter		2,390,789
		$	2,712,138

HYDROMER INC 10-K/A