9.           Line of Credit

As of June 30, 2026 and September 30, 2025, the Company maintained an inventory line of credit with a borrowing capacity of $15.0 million. It may be used by the TS and HPP segments in the U.S. to purchase inventory from approved vendors with payment terms which exceed those offered by the vendors. No interest accrues under the inventory line of credit when advances are paid within terms, however, late payments are subject to an interest charge of the rate published in the Wall Street Journal as the “prime rate” plus 1%, which was 7.75% as of June 30, 2026. The line of credit automatically renews for one year periods unless terminated by the Company with at least 60 days’ notice or immediate termination by the lender. The collateral is a blanket UCC filing on Modcomp, Inc., a wholly-owned subsidiary, and CSPi assets. The credit agreement for the inventory line of credit contains financial covenants which require the Company to maintain the following TS segment-specific financial ratios: (1) a minimum current ratio of 1.2, (2) tangible net worth of no less than $4.0 million, and (3) a maximum ratio of total liabilities to total net worth of less than 5:1. As of June 30, 2026 and September 30, 2025, Company borrowings, all from the TS segment, under the inventory line of credit were $2.4 million and $0.9 million, respectively, and the Company was in compliance with all financial covenants. As of June 30, 2026 and September 30, 2025, this line of credit also included availability of a limited cash withdrawal of up to $1.0 million. As of June 30, 2026 and September 30, 2025 there were no cash withdrawals outstanding.

​