Note Payable and Line of Credit

6 Months Ended

Mar. 31, 2024

Note Payable and Line of Credit.

Note Payable and Line of Credit

9.          Notes Payable and Line of Credit

In October 2019, the Company borrowed $2.0 million with a 5.1% rate of interest related to a multi-year agreement with a customer.

There was no interest expense related to the note payable for the six months ended March 31, 2024. Interest expense related to the notes for the three and six months ended March 31, 2023 was $6 thousand and $11 thousand, respectively.

	March 31, 2024		September 30, 2023
	(Amounts in thousands)
Current	$	—	$	449
Less: notes discount		—		—
Note payable - current portion	$	—	$	449

As of March 31, 2024 and September 30, 2023, the Company maintained an inventory line of credit with a borrowing capacity of $15.0 million. It may be used by the TS and HPP segments in the US to purchase inventory from approved vendors with payment terms which exceed those offered by the vendors. No interest accrues under the inventory line of credit when advances are paid within terms, however, late payments are subject to an interest charge of Prime plus 5%. The credit agreement for the inventory line of credit contains financial covenants which require the Company to maintain the following TS segment-specific financial ratios: (1) a minimum current ratio of 1.2, (2) tangible net worth of no less than $4.0 million, and (3) a maximum ratio of total liabilities to total net worth of less than 5.0:1. As of March 31, 2024 and September 30, 2023, Company borrowings, all from the TS segment, under the inventory line of credit were $1.0

million and $1.5 million, respectively, and the Company was in compliance with all financial covenants. As of March 31, 2024 and September 30, 2023, this line of credit also includes availability of a limited cash withdrawal of up to $1.0 million. As of March 31, 2024 and September 30, 2023 there were no cash withdrawals outstanding.