Note 9 - Corporate Debt

3 Months Ended

Nov. 30, 2021

Notes to Financial Statements

Debt Disclosure [Text Block]

9. CORPORATE DEBT

The Company has a revolving line of credit with PNC Bank, National Association (“PNC Bank”) of $5,000,000 as of November 30, 2021. This line of credit was increased from $3,000,000 to $5,000,000 effective as of August 31, 2021. Borrowings of $2,500,000 were outstanding under the line of credit as of November 30, 2021 and no amounts were outstanding as of August 31, 2021. Outstanding advances under the line of credit bear interest at a rate equal to the daily BSBY rate plus 2.50%. The weighted average interest rate during the three months ended November 30, 2021 was 2.57%. The line of credit matures on February 22, 2022. The line of credit is governed under an amended and restated loan agreement. The loan agreement contains covenants, including affirmative financial covenants, such as the maintenance of a minimum fixed charge coverage ratio, and negative covenants, which, among other things, limit the incurrence of additional indebtedness, loans and equity investments, disposition of assets, mergers and consolidations and other matters customarily restricted in such agreements. Under the loan agreement, the Company is subject to a minimum fixed charge coverage ratio of 1.10:1.00. As of November 30, 2021, the Company was in compliance with all debt covenants.

As of November 30, 2021 and August 31, 2021, the Company did not have any letters of credit outstanding with respect to the letter of credit sub-facility available under the revolving line of credit with PNC Bank. As of November 30, 2021 and August 31, 2021, the Company had $104,363 of letters of credit with JP Morgan Chase Bank that are performance based and set to expire between 2021 and 2022.