Debt

12 Months Ended

Sep. 30, 2020

Loan Agreement

On March 10, 2020, the Company entered into a loan agreement with its primary lender for $3.5 million, bearing interest at 6% per annum. The loan is payable in seven semi-annual installments of principal and interest with the first payment occurring June 30, 2020, and the final payment due June 30, 2023. Payment of the loan may be accelerated in the event of a default. The principal and interest payments correlate to the payment schedule for the promissory note with Leveling 8. The balance under this loan is now $1.2 million and the final payment will be June 30, 2023. The loan is secured by substantially all of the assets of the Company, including, without limitation, the promissory note that the Company received in connection with the sale of its Cable TV segment in 2019 to Leveling 8, Inc.

Line of Credit and Notes Payable

Credit Agreement

The Company has a line of credit ("LOC") agreement with its primary lender. This credit agreement contains a $4.0 million revolving line of credit and had a maturity date of December 17, 2020. The Company renewed the line of credit for another year subsequent to September 30, 2020. During the fiscal year 2020, the line of credit required quarterly interest payments based on the prevailing Wall Street Journal Prime Rate ("WSJP") (3.25% at September 30, 2020), and the interest rate was reset monthly. The credit agreement provides that the Company maintain a fixed charge coverage ratio of not less than 1.25 to 1.00 measured annually. At September 30, 2020, the Company was not in compliance with this ratio. At September 30, 2020, there was $2.8 million outstanding under the line of credit. Future borrowings under the line of credit are limited to the lesser of $4.0 million or the sum of 80% of eligible accounts receivable and 60% of eligible Telco segment inventory. Under these limitations, the Company’s total line of credit borrowing capacity was $3.3 million at September 30, 2020, and remaining availability was $0.5 million.

Subsequent to September 30, 2020, the Company renewed its revolving bank line of credit for one year to a maturity date of December 17, 2021. As part of this renewal, the revolving bank line of credit remained $4.0 million, or the sum of 80% of eligible accounts receivable and 25% of eligible inventory. Quarterly interest payments are based on WSJP, floating, with the addition of a 4% floor rate and a fixed charge coverage ratio of 1.25 to be tested quarterly beginning June 30, 2021.

Paycheck Protection Program Loan

On April 14, 2020, the Company received a SBA Payroll Protection Program (“PPP”) loan pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), with its primary lender for $2.9 million. The PPP loan bears interest at 1% per annum, with monthly payments of principal and interest in the amount of $164,045 commencing on November 10, 2020, and matures on April 10, 2022. The Paycheck Protection Program provides that the PPP loan may be partially or fully forgiven if the funds are used for certain qualifying expenses as described in the CARES Act. The Company has applied for forgiveness of the PPP loan in accordance with the requirements and limitations under the CARES Act, the PPP Flexibility Act and SBA regulations and requirements.

As of September 30, 2020, the aggregate maturities of debt for the next five years and thereafter are as follows (in thousands):



2021	$	4,509
2022	2,440
Thereafter	—


Total	$	6,949