On January 20, 2022, Lantronix, Inc., Lantronix Holding Company, Lantronix Canada, ULC and Lantronix Technologies Canada (Taiwan) Ltd. and TNI (Borrowers) terminated that certain Mezzanine Loan and Security Agreement, dated as of August 2, 2021, with SVB Innovation Credit Fund VIII, L.P. (Lender), pursuant to which the Lender funded a $12,000,000 term loan facility. Advances under the Mezzanine Credit Facility bore interest at LIBOR or the Prime Rate, at the option of the Company, plus a margin of 9.00% with a floor of 1.00% in the case of LIBOR and a margin of 7.50% with a floor of 3.50% in the case of the Prime Rate. The Borrowers were also obligated to pay other customary facility fees for credit facilities of the similar size and type.

The Mezzanine Credit Facility required the Borrowers and their subsidiaries, on a consolidated basis, to comply with a maximum senior leverage ratio, a minimum fixed charge coverage ratio and a minimum liquidity test. In addition, the Mezzanine Credit Facility contained customary representations and warranties, affirmative and negative covenants, including covenants that limit or restrict the Borrower's and its subsidiaries' ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements. The Mezzanine Credit Facility included a number of events of default, including, among other things, non-payment defaults, covenant defaults, cross-defaults to other materials indebtedness, bankruptcy and insolvency defaults and material judgment defaults.

If any event of default had occurred (subject, in certain instances, to specified grace periods), the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts Mezzanine Credit Facility would have become due and payable immediately.