BK Technologies Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
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Item 1.01 Entry into a Material Definitive Agreement.
On October 30, 2024, BK Technologies, Inc. (the “Borrower”), a wholly owned subsidiary of BK Technologies Corporation (the “Company”), entered into a Credit Agreement by and between the Borrower, as borrower, and Fifth Third Bank, National Association (the “Lender”), as the lender (the “Fifth Third Credit Agreement”). The Fifth Third Credit Agreement provides for a one-year revolving line of credit with a maximum commitment of $6 million, with an accordion feature, if certain conditions are met, for up to an additional $4 million of borrowing capacity, totaling a maximum commitment of $10 million. Borrower’s repayment obligations are evidenced by a Revolving Credit Promissory Note issued by the Borrower in favor of the Lender (the “Promissory Note”).
The Borrower’s repayment obligations under the Fifth Third Credit Agreement are guaranteed by the Company and RELM Communications, Inc. (“-RELM” and the Borrower collectively with the Company and RELM, the “Loan Parties”), pursuant to a Continuing Guaranty Agreement by and among the Company, RELM and the Lender (the “Guarantee”), and secured by a pledge of essentially all of the assets of the Loan Parties pursuant to a Security Agreement by and among the Borrower, the Company and RELM in favor of the Lender (the “Security Agreement” and collectively with the Fifth Third Credit Agreement, the Promissory Note, and the Guarantee, the “Loan Documents”).
Each advance under the Fifth Third Credit Agreement shall accrue interest on the outstanding principal amount thereof at a rate of the Secured Overnight Financing Rate (“SOFR”) plus 2.5% per annum. Each advance may be prepaid at any time without penalty and the entire line of credit commitment may be permanently terminated by the Borrower at any time upon 10 days’ prior written notice to the Lender without penalty.
The Loan Parties are subject to customary negative covenants under the Loan Documents, including with respect to their ability to incur additional indebtedness, encumber and dispose of their assets and enter into affiliate transactions. The Borrower must also comply with: (i) a maximum total funded debt ratio of 2.00 to 1.00; and (ii) a minimum fixed charge coverage ratio of 1.20 to 1.00, each measured at the end of every fiscal quarter.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure made under Item 1.01 of this Current Report on Form 8-K is also responsive to Item 2.03 hereof and is incorporated herein by reference. Copies of the Fifth Third Credit Agreement, Promissory Note, Guarantee, and Security Agreement are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and are hereby incorporated into this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BK TECHNOLOGIES CORPORATION |
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Date: November 4, 2024 | By: | /s/ Scott A. Malmanger |
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| Scott A. Malmanger |
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| Chief Financial Officer |
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