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Note 7 - Corporate Debt
 3 Months Ended
Nov. 30, 2022
Notes to Financial Statements  
Debt Disclosure [Text Block]

7.

CORPORATE DEBT

 

The Company had a revolving line of credit with a bank of $7,000,000 as of November 30, 2022. The line of credit had a maturity date of January 7, 2023 and bore interest at an annual rate equal to the daily Bloomberg Short-Term Bank Yield (BSBY) Index plus 250 basis points (2.50%).

 

Borrowings of $5,450,000 and $5,900,000 were outstanding under the line of credit as of November 30, 2022 and August 31, 2022, respectively. The average interest rate was 5.80% and 2.57% during the three months ended November 30, 2022 and 2021.

 

The obligations of the Company under the loan agreement were secured by a lien on all of the Company’s personal property, excepting certain liens. The loan agreement contained 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. As of November 30, 2022, the Company was in compliance with all debt covenants.

 

As of November 30, 2022 and August 31, 2022, 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 the bank.

 

On January 6, 2023, the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A., which provides the Company with a senior secured revolving line of credit of up to $10.0 million, which includes a $5.0 million sublimit for standby letters of credit. In connection with the execution of the new Credit Agreement, the prior loan agreement was terminated. See Note 16 entitled “Subsequent Event.”