Item 1.01 Entry into a Material Definitive Agreement.
On
The Loan Agreement replaced the Company's previous
The outstanding principal amount of any advance shall accrue interest at a
variable interest rate based on changes in an independent index, which is the
prime rate as published in the
The Loan Agreement also contains affirmative and negative covenants, including a requirement that the Company furnish to the Lender by the fifteenth (15th) day of each month an aging of the Company's accounts receivable aging details and accounts payable details, insurance policy/rider for foreign account receivables and a borrowing base certificate with supporting detail and any other documentation the Lender deems necessary. The Company has also agreed to deliver to the Lender within one hundred twenty (120) days after the end of each fiscal year a balance sheet, a statement of income and expense for the year, and a statement of change in financial position with an unqualified audit level report prepared by an independent public accountant.
In connection with the Loan Agreement, the Company has also entered into that
certain Promissory Note (the "Note") in the principal amount of
The Company has also entered into that certain Commercial Security Agreement (the "Security Agreement") with the Lender, pursuant to which the Lender was granted a security interest in the Company's assets.
The foregoing descriptions of the Loan Agreement, Note and Security Agreement do not purport to be complete and are qualified in their entireties by reference to the full texts of each of the Loan Agreement, Note and Security Agreement, which are attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively, and incorporated by reference herein.
Item 1.02 Termination of a Material Definitive Agreement.
On
The credit line under the Prior Loan Agreement bore interest at the rate of LIBOR plus 6.50% and was secured by substantially all of the assets of the Company. The Prior Loan Agreement included a financial covenant requiring the Company to meet quarterly income/loss targets provided at least on an annual basis by the Company for the following year.
The information set forth in Item 1.01 of this Form 8-K above regarding the Prior Loan Agreement is incorporated by reference in response to this Item 1.02.
-------------------------------------------------------------------------------- Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit Description Business Loan Agreement (Asset Based), dated as ofMay 5, 2023 , by 10.1 and between the Company andRockland Trust Company . Promissory Note, dated as ofMay 5, 2023 , from the Company in favor 10.2 ofRockland Trust Company . Commercial Security Agreement, dated as ofMay 5, 2023 , by and 10.3 between the Company andRockland Trust Company . Cover Page Interactive Data File (embedded within the Inline XBRL 104 document)
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