Notes Payable and Line of Credit

6 Months Ended

Mar. 31, 2023

Line of Credit

Line of Credit

10.          Notes Payable and Line of Credit

In September 2019, the Company borrowed $1.0 million with a 5.0% rate of interest related to a multi-year agreement with a customer. See Note 6 for the disclosure related to the receivables.

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.

Interest expense related to the notes for the three months ended March 31, 2023 and 2022 was $6 thousand and $13 thousand, respectively. Interest expense related to the notes for the six months ended March 31, 2023 and 2022 was $11 thousand and $27 thousand, respectively.

	March 31, 2023		September 30, 2022
	(Amounts in thousands)
Current	$	449	$	449
Less: notes discount		11		22
Notes payable - current portion	$	438	$	427
Noncurrent	$	—	$	449
Less: notes discount		—		—
Notes payable - noncurrent portion	$	—	$	449

As of March 31, 2023 and September 30, 2022, 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 U.S. 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, 2023 and September 30, 2022, Company borrowings, all from the TS segment, under the inventory line of credit were $1.3 million and $3.1 million, respectively, and the Company was in compliance with all financial covenants. As of March 31, 2023 and September 30, 2022, this line of credit also includes availability of a limited cash withdrawal of up to $1.0 million. As of March 31, 2023 and September 30, 2022 there were no cash withdrawals outstanding.