BALLANTYNE STRONG, INC (NYSEMKT:BTN) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On September 5, 2017, Strong/MDI Screen Systems Inc. (the “Borrower”), a wholly-owned subsidiary of Ballantyne Strong, Inc., entered into a demand credit agreement with Canadian Imperial Bank of Commerce (the “Lender”). The credit agreement consists of a revolving line of credit in an aggregate principal amount of CDN$3.5 million (approximately USD$2.8 million), subject to a borrowing base requirement (the “Line of Credit”), and two installment loans in the aggregate principal amount of CDN$6.5 million (approximately USD$5.2 million), one in the amount of CDN$6.0 million (approximately USD$4.8 million) and one in the amount of CDN$500,000 (approximately USD$400,000) (each, an “Installment Loan,” and together with the Line of Credit, the “Credit Facilities”). As of the date of this filing, the Borrower has not drawn any amounts under the Credit Facilities.
Amounts outstanding under the Line of Credit will bear interest at the prime rate set by the Lender, with interest payable monthly and the outstanding principal amount payable on demand by the Lender.
Each Installment Loan will bear interest at the prime rate plus 0.50% and will be payable in consecutive equal monthly installments, plus accrued interest, over a period of 20 years for the CDN$6.0 million Installment Loan and over a period of five years for the CDN$500,000 Installment Loan. The Lender may also demand repayment of a Term Loan at any time. The Borrower is permitted to prepay all or part of a Term Loan at any time without notice or penalty, provided the Borrower is not in default on the loan.
The Credit Facilities are secured by a lien on the Borrower’s Quebec, Canada facility and substantially all of the assets of the Borrower.
The Credit Facilities contain customary covenants, including as to compliance with laws (including environmental laws), delivery of quarterly and annual financial statements, maintenance of insurance, restrictions on the use of loan proceeds (with all proceeds from the Line of Credit to be used for the Borrower’s business operations, all proceeds from the CDN$6.0 million Term Loan to be used for the financing of the Borrower’s Quebec, Canada facility and all proceeds from the CDN$500,000 Term Loan to be used for the financing of equipment) and other customary covenants. The Borrower is also required to comply during the term of the Credit Facilities with the following financial covenants, to be measured quarterly:
| ● | Total Liabilities to Effective Equity Ratio: The Borrower is required to maintain a ratio of total liabilities to “effective equity” (tangible shareholders’ equity, less amounts receivable from affiliates and equity method investments, plus all postponed debt) not in excess of 2:1. |
| ● | Current Ratio: The Borrower is required to maintain a current ratio (current assets, excluding amounts due from related parties, divided by current liabilities) of not less than 1.50:1. |
| ● | Minimum Effective Equity: The Borrower is required to maintain minimum effective equity (as defined above) of not less than CDN$8 million (approximately USD$6.4 million). |
The Credit Facilities contain customary events of default and remedies for credit facilities of this nature.
The foregoing description of the Credit Facilities does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement, executed as of September 5, 2017, by and between the Borrower and the Lender, filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant.
The information required by Item 2.03 is included in Item 1.01 above and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit
BALLANTYNE STRONG, INC. ExhibitEX-10.1 2 ex10-1.htm LOC- Instalment Loan Credit QUE Feb 2016 Canadian Imperial Bank of Commerce 1006-2540 Daniel-Johnson,…To view the full exhibit click here
About BALLANTYNE STRONG, INC (NYSEMKT:BTN)
Ballantyne Strong, Inc. is a holding company. The Company’s business activities focus on serving the cinema, retail, financial and government markets. The Company and its subsidiaries design, integrate and install technology solutions for a range of applications; develop and deliver out-of-home messaging, advertising and communications; manufacture projection screens, and provide managed services, including monitoring of networked equipment to its customers. The Company operates through two segments: Cinema and Digital Media. Its Cinema operations include the sale of digital projection equipment, screens and sound systems. Its Digital Media operations include the delivery of end-to-end digital signage solutions, video communication solutions, content creation, and management and service of digital signage and digital cinema equipment. The Company’s products are distributed to the retail, financial, government and cinema markets throughout the world. BALLANTYNE STRONG, INC (NYSEMKT:BTN) Recent Trading Information
BALLANTYNE STRONG, INC (NYSEMKT:BTN) closed its last trading session up +0.10 at 6.45 with 8,689 shares trading hands.
