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Note 13 - Line of Credit and PPP Loan

9 Months Ended

Jul. 31, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

13

– Line of credit and PPP loan

In

November 2019,

we entered into an agreement for a revolving line of credit (“LOC”) in the amount of

$5.0

million. Amounts outstanding under the LOC shall bear interest at a rate of

2.0%

plus LIBOR Daily Floating Rate (“base interest rate”), with interest payable on the

first

day of each month. Borrowings under the LOC are secured by a security interest in certain assets of the Company. The LOC contains certain loan covenants. Failure to maintain the loan covenants

may

constitute an event of default, resulting in all outstanding amounts of principal and interest becoming immediately due and payable. All outstanding principal and interest is due and payable on

December 1, 2021.

As of

July 31, 2020,

we are in compliance with all loan covenants. Additionally, as of

July 31, 2020,

no

amounts were outstanding under the line of credit.

In

May 2020

we applied for and received loans under the Paycheck Protection Program (“PPP”) of the CARES Act totaling approximately

$2.8

million (“PPP Loans”). The funds from the PPP Loans were used to retain employees, maintain payroll and benefits, and make lease and utility payments. Without the PPP Loans, we would have made material reductions in our workforce (particularly at our New York facility). We anticipate that most of the PPP Loans will be eligible for forgiveness in accordance with the provisions of the CARES Act. To the extent

not

forgiven, the PPP Loans have a

two

-year term, a fixed interest rate of

1%,

and principal and interest payments are deferred for

six

months.

Future minimum loan payments as of

July 31, 2020

were as follows:

Year ended October 31,		PPP Loan
2020 (excluding nine months ended July 31, 2020)		$	-
2021			1,699
2022			1,089
Total future minimum payments		$	2,788

X

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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- References

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