ALLIED HEALTHCARE PRODUCTS, INC. (NASDAQ:AHPI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On February 27, 2017, Allied Healthcare Products, Inc. (the
Company) entered into that certain Loan and Security Agreement
(the Credit Agreement) with Summit Financial Resources, L.P.
(Summit) to which the Company obtained a secured revolving credit
facility (the Credit Facility). The Companys obligations under
the Credit Facility are secured by all of the Companys personal
property, both tangible and intangible, to the terms and subject
to the conditions set forth in the Credit Agreement. Availability
of funds under the Credit Agreement is based on the Companys
accounts receivable and inventory but will not exceed
$2,000,000.00.
The Credit Facility will be available, subject to its terms, on a
revolving basis until it expires on February 27, 2019, at which
time all amounts outstanding under the Credit Facility will be
due and payable. Advances will bear interest at a rate equal to
2.00% in excess of the prime rate as reported in the Wall Street
Journal. Interest is computed based on the actual number of days
elapsed over a year of 360 days.
Regardless of the amount borrowed under the Credit Facility, the
Company will pay a minimum amount of .25% (25 basis points) per
month on the maximum availability ($5,000 per month). In the
event the Company prepays or terminates the Credit Facility, the
Company will be obligated to pay an amount equal to twelve months
of minimum monthly payments, minus the number of months elapsed
since the effective date of the Credit Agreement.
Under the Credit Agreement, advances are generally subject to
customary borrowing conditions and to Summits sole discretion to
fund the advances. The Credit Agreement also contains covenants
with which the Company must comply during the term of the Credit
Facility. Among other things, such covenants require the Company
to maintain insurance on the collateral, operate in the ordinary
course and not engage in a change of control, dissolve or wind up
the Company.
The Credit Agreement also contains certain events of default
including, without limitation: the failure to make payments when
due; the material breach of representations or warranties
contained in the Credit Agreement or other loan documents;
cross-default with other indebtedness of the Company; the entry
of judgments or fines that may have a material adverse effect on
the Company; failure to comply with the observance or performance
of covenants contained in the Credit Agreement or other loan
documents; insolvency of the Company, appointment of a receiver,
commencement of bankruptcy or other insolvency proceedings;
dissolution of the Company; the attachment of any state or
federal tax lien; attachment or levy upon or seizure of the
Companys property; or any change in the Companys condition that
may have a material adverse effect. After an event of default,
and upon the continuation thereof, the principal amount of all
loans made under the Credit Facility would bear interest at a
rate per annum equal to 20.00% above the otherwise applicable
interest rate (provided, that the interest rate may not exceed
the highest rate permissible under law), and Summit would have
the option to accelerate maturity and payment of the Companys
obligations under the Credit Facility.
As of the date of this Current Report on Form 8-K, the Company
has no borrowings outstanding under the Credit Facility.
The foregoing summary of the Credit Agreement is qualified in its
entirety by reference to the Credit Agreement, a copy of which is
filed herewith as Exhibit 99.1, and incorporated by reference
herein.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information related to the Credit Facility discussed under
Item 1.01 set forth above is hereby incorporated by reference
under this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
| (a) | Not applicable. |
| (b) | Not applicable. |
| (c) | Not applicable. |
| (d) | Exhibits. |
| Exhibit Number | Description |
| 99.1 |
Loan and Security Agreement, dated February 27, 2017, by and between the Allied Healthcare Products, Inc. and Summit Financial Resources, L.P. |
About ALLIED HEALTHCARE PRODUCTS, INC. (NASDAQ:AHPI)
Allied Healthcare Products, Inc. manufactures a range of respiratory products used in the healthcare industry in a range of hospital and alternate site settings, including sub-acute care facilities, home healthcare and emergency medical care. The Company’s respiratory care products are used in the treatment of acute and chronic respiratory disorders such as asthma, emphysema, bronchitis and pneumonia. Respiratory care products are used in both hospitals and alternate care settings. Its medical gas equipment consists of hospitals, alternate care settings and surgery centers. The Company’s medical gas equipment products include medical gas system construction products, medical gas system regulation devices, disposable oxygen and specialty gas cylinders, and portable suction equipment. Its emergency medical products include respiratory/resuscitator products and trauma patient handling products. It also offers trauma and patient handling products, including spine immobilization products. ALLIED HEALTHCARE PRODUCTS, INC. (NASDAQ:AHPI) Recent Trading Information
ALLIED HEALTHCARE PRODUCTS, INC. (NASDAQ:AHPI) closed its last trading session down -0.03 at 1.83 with 4,306 shares trading hands.