Debt

12 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

6. Debt

On September 14, 2020, the Company entered into a secured revolving credit facility pursuant to a Loan and Security Agreement, which was amended by a First Amendment on July 2, 2021 and by a Second Amendment on March 7, 2022 (as amended, the "Loan Agreement") with Bridgewater Bank (“Bridgewater”). The Loan Agreement provided for availability under a secured revolving line of credit of up to $25 million (the "Bridgewater Revolving Credit Facility"). The outstanding balance on the Bridgewater Revolving Credit Facility was $10.0 million as of each of September 30, 2022 and 2021.

As of September 30, 2022, the Bridgewater Revolving Credit Facility was scheduled to mature on September 14, 2023. The Company's obligations under the Loan Agreement were secured by substantially all of the Company’s and its material subsidiaries' assets, other than intellectual property, real estate and foreign assets, including equity in foreign subsidiaries. The Company also pledged the stock of certain of its subsidiaries to secure such obligations. Interest under the Loan Agreement accrued at a rate per annum equal to the greater of (i) 3.25% and (ii) the 90-day interest rate yield for U.S. Government Treasury Securities plus 2.75%. A facility fee was payable on unused commitments at a rate of 0.075% quarterly. As of September 30, 2022 and 2021, the weighted average interest rate on outstanding borrowings on the Bridgewater Revolving Credit Facility was 6.1% and 3.3%, respectively.

The Loan Agreement contained affirmative and negative covenants customary for a facility of its type which, among other things, required the Company to meet certain financial tests, including (i) minimum liquidity, (ii) minimum current ratio, (iii) minimum quarterly revenue, and (iv) minimum tangible net worth. The Loan Agreement also contained covenants which, among other things, limited the Company's ability to incur additional debt, make certain investments, create or permit certain liens, create or permit restrictions on the ability of subsidiaries to pay dividends or make other distributions, consolidate or merge, and engage in other activities customarily restricted in such agreements, in each case subject to exceptions permitted by the Loan Agreement. The Loan Agreement also contained customary events of default, the occurrence of which would permit Bridgewater to terminate its commitment and accelerate the Bridgewater Revolving Credit Facility.

See Note 14 Subsequent Events for information on financing arrangements subsequent to September 30, 2022.