NorTech Systems Inc. Files 8-K for Material Agreement

TL;DR

NorTech Systems Inc. signed a big deal on Feb 29th. 8-K filed.

AI Summary

On February 29, 2024, NorTech Systems Incorporated entered into a material definitive agreement. The filing also includes financial statements and exhibits related to this agreement. The company is incorporated in Minnesota and its principal executive offices are located in Maple Grove, MN.

Why It Matters

This 8-K filing indicates NorTech Systems Inc. has entered into a significant new contract, which could impact its future financial performance and strategic direction.

Risk Assessment

Risk Level: medium — Entering into a material definitive agreement can introduce new risks and opportunities, the specifics of which are not detailed in this initial filing.

Key Players & Entities

• NorTech Systems Incorporated (company) — Registrant
• February 29, 2024 (date) — Date of earliest event reported
• Minnesota (jurisdiction) — State of incorporation
• Maple Grove, MN (location) — Principal executive offices

FAQ

Key Financial Figures

• $15 million — et backed line of credit agreement with $15 million Senior Secured Revolving Line of Credit
• $16 million — is an amendment and restatement of our $16 million asset backed line of credit agreement w

Filing Documents

• nsys20240304_8k.htm (8-K) — 26KB
• ex_634780.htm (EX-10.1) — 791KB
• 0001437749-24-006635.txt ( ) — 1086KB
• nsys-20240229.xsd (EX-101.SCH) — 3KB
• nsys-20240229_def.xml (EX-101.DEF) — 11KB
• nsys-20240229_lab.xml (EX-101.LAB) — 15KB
• nsys-20240229_pre.xml (EX-101.PRE) — 11KB
• nsys20240304_8k_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

ITEM 1.01 Entry into a Material Definitive Agreement On February 29, 2024, we replaced our asset backed line of credit agreement with $15 million Senior Secured Revolving Line of Credit with Bank of America, N.A. (the "Revolver"). The maturity date of the Revolver is February 29, 2027. The Revolver allows for borrowings at a defined base rate, or at the one, three or six month Secured Overnight Finance Rate, also known as "SOFR", plus a defined margin. If we prepay SOFR borrowings before their contractual maturity, we have agreed to compensate the bank for lost margin, as defined in the Revolver agreement. We are required to quarterly pay a 20-basis point fee on the unused portion of the Revolver. The Revolver is an amendment and restatement of our $16 million asset backed line of credit agreement with Bank of America which, as amended, was to expire on June 15, 2025. We were in compliance with all the financial covenants under the asset backed line of credit agreement as of and for the year ended December 31, 2023. No termination penalties were incurred by the Company in connection with the replacement of the asset backed line of credit agreement with the Revolver. The Revolver requires us to not exceed 2.5 times leverage ratio and requires us to maintain at least a 1.25 times minimum fixed charge coverage ratio, both of which are defined in the Revolver agreement. There are no subjective acceleration clauses under the Revolver that would accelerate the maturity of our outstanding borrowings. The Revolver contains certain covenants which, among other things, require us to adhere to regular reporting requirements, abide by shareholder dividend limitations, maintain certain financial performance, and limit the amount of annual capital expenditures. The Revolver is secured by substantially all our assets.

01 Financial Statements and Exhibits

ITEM 9.01 Financial Statements and Exhibits. Exhibits. Exhibit No. Description 10.1 Credit Agreement dated as of February 29, 2024, by and between Nortech Systems Incorporated and Bank of America, N.A. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: March 5, 2024 Nortech Systems Incorporated (Registrant) /s/ Andrew D.C. LaFrence Andrew D.C. LaFrence Senior Vice President of Finance and Chief Financial Officer EXHIBIT INDEX Exhibit No. Description 10.1 Credit Agreement dated as of February x, 2024, by and between Nortech Systems Incorporated and Bank of America, N.A. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

View Full Filing

View this 8-K filing on SEC EDGAR