Credit Facilities

3 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Credit Facilities

NOTE 11.            Credit Facilities

On November 11, 2010, we entered into a Credit and Security Agreement (as amended to date, the “Credit Facility”) with Wells Fargo Bank, N.A. The Credit Facility is secured by the Company’s assets and is subject to a borrowing base formula based on the Company’s eligible accounts receivable, inventory, and machinery and equipment accounts.

The Credit Facility matures in November 2021 and currently provides us with a revolving credit line of up to $15.0 million, subject to a borrowing base formula, that can be used for working capital requirements, letters of credit, acquisitions, and other general corporate purpose subject to a requirement, for certain specific uses, that the Company have liquidity of at least $25.0 million after such use. The Credit Facility requires us to maintain (a) liquidity of at least $7.5 million, which amount shall automatically increase to at least $10.0 million on March 1, 2020 and (b) excess availability of at least $1.0 million.

As of December 31, 2019, there was $4.5 million outstanding under this Credit Facility and the Company was in compliance with all financial covenants. Also, as of December 31, 2019, the Credit Facility had approximately $0.5 million reserved for one outstanding stand-by letter of credit and $0 available for borrowing.