On October 1, 2026, FatPipe, Inc. entered into two Business Loan Agreements with KeyBank National Association to establish new credit facilities. The agreements provide for a secured revolving line of credit with a maximum borrowing capacity of $1.5 million and a secured term loan with a principal amount of $4.5 million.
The primary purpose of the term loan is to refinance an existing Small Business Administration loan held with Fortis Bank. On October 1, 2026, approximately $4.47 million of the term loan proceeds were used to repay the outstanding balance of the Fortis Bank loan in full, terminating that obligation.
The new facilities carry different maturity dates and repayment schedules. The term loan matures on October 1, 2029, and requires 35 monthly principal payments of $75,000 beginning November 1, 2026, along with monthly interest payments. The revolving line of credit matures on September 30, 2027, and requires only monthly interest payments, with all principal due at maturity.
Regarding interest rates, the Company expects an approximate reduction of 110 basis points in its annual borrowing costs. The Fortis Bank loan bore interest at the Prime Rate plus 1.00%. In contrast, borrowings under both the new term loan and revolving line of credit bear interest at the Adjusted Daily SOFR Index plus 3.00%. The origination fees for the term loan and revolving line of credit are $22,500 and $7,500, respectively.
The credit facilities are secured by security interests in substantially all personal property assets of FatPipe and its wholly owned subsidiary, FatPipe Technologies, Inc., including intellectual property. The agreements include financial covenants requiring a Total Funded Debt to EBITDA ratio of no greater than 2.50 to 1.00 and a Fixed Charge Coverage Ratio of 1.20 to 1.00, tested quarterly.
