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BANK INDEBTEDNESS	9 Months Ended
May 31, 2023
Bank Indebtedness
BANK INDEBTEDNESS	7. BANK INDEBTEDNESS Bank indebtedness under the Company’s $12,000,000 line of credit as of May 31, 2023 was $8,000,000 (August 31, 2022 - $7,000,000). During the quarter ended May 31, 2023, the $10,000,000 line of credit was temporarily increased to $12,000,000. The temporary increase is available through August 31, 2023. Bank indebtedness, when it exists, is secured by an assignment of accounts receivable and inventory. Interest was previously calculated solely on the one-month LIBOR rate plus 175 basis points. Beginning with the monthly interest payment due March 31, 2022, the Company’s Bank Line of Credit agreement was revised to change the calculation of the interest rate from the one-month LIBOR rate to the one-month Secured Overnight Financing Rate (SOFR). Interest is now calculated based on the one-month SOFR plus 157 basis points, which as of May 31, 2023 was 6.65% (5.08% + 1.57%). The temporary increase in the available borrowing under the line of credit includes additional financial covenants, which require the Company to maintain certain leverage ratios of borrowed funds to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). The Company is currently in compliance with these covenants.

BANK INDEBTEDNESS

9 Months Ended

May 31, 2023

7. BANK INDEBTEDNESS

Bank indebtedness under the Company’s $12,000,000 line of credit as of May 31, 2023 was $8,000,000 (August 31, 2022 - $7,000,000). During the quarter ended May 31, 2023, the $10,000,000 line of credit was temporarily increased to $12,000,000. The temporary increase is available through August 31, 2023.

Bank indebtedness, when it exists, is secured by an assignment of accounts receivable and inventory. Interest was previously calculated solely on the one-month LIBOR rate plus 175 basis points. Beginning with the monthly interest payment due March 31, 2022, the Company’s Bank Line of Credit agreement was revised to change the calculation of the interest rate from the one-month LIBOR rate to the one-month Secured Overnight Financing Rate (SOFR). Interest is now calculated based on the one-month SOFR plus 157 basis points, which as of May 31, 2023 was 6.65% (5.08% + 1.57%).

The temporary increase in the available borrowing under the line of credit includes additional financial covenants, which require the Company to maintain certain leverage ratios of borrowed funds to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). The Company is currently in compliance with these covenants.