CTI INDUSTRIES CORPORATION (NASDAQ:CTIB) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Entry into a Material Definitive Agreement.
On June 8, 2018, CTI Industries Corporation, along with its subsidiaries Flexo Universal, S. de R.L. de C.V. and CTI Supply, Inc. (collectively, “the Company”) entered into Waiver and Amendment No. 1 (the "Amendment") to Revolving Credit, Term Loan, and Security Agreement (the “Agreement”) with PNC Bank, National Association (“PNC”). The original Agreement included a $6 million term loan and up to $18 million of availability under the revolving credit facility. As previously reported, the Company notified PNC of failure to meet two financial covenants in the Agreement for the period ended March 31, 2018. The Amendment provides a waiver for this failure, an amendment fee, and revised covenants for the remainder of the Agreement.
The following is a summary of certain material elements of the Amendment. The Amendment and related documents are filed as Exhibits to this Form 8-K. The Agreement has a five year term, and is collateralized by the assets of the Company.
In consideration of the waiver and amendments described in the Amendment, the Company has agreed to pay $58,750.
The Agreement includes certain financial covenants including a maximum leverage ratio and a minimum fixed coverage ratio, as well as weekly and monthly reporting obligations, and the usual and customary events of default and certain restrictions related to the repayment of subordinated debt, capital expenses, affiliate transactions and indebtedness. The Amendment incorporates a similar Fixed Charge coverage ratio, the calculation for which is quarterly beginning April 1, 2018 for future covenant commitments. In addition, until the Fixed Charge coverage ratio meets or exceeds 1.1 to 1.0 for the previous twelve months, the rate of interest is increased by 2%.
The Leverage ratio has been modified to be calculated quarterly, beginning June 30, 2018 using data beginning April 1, 2018, at a multiple beginning at 4.5 and gradually reducing to 2.75 by September 30, 2019. A new EBITDA covenant was added in the Amendment, with the Company committing to EBITDA of at least $300,000 during April 2018 and $750,000 during the two months ended May 31, 2018.
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Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03. |
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Item 9.01 |
Financial Statements and Exhibits. |
| (d) | Exhibits: |
CTI INDUSTRIES CORP ExhibitEX-99.1 2 ex_116295.htm EXHIBIT 99.1 ex_116295.htm EXHIBIT 99.1 WAIVER AND AMENDMENT NO. 1 TO REVOLVING CREDIT,…To view the full exhibit click here
About CTI INDUSTRIES CORPORATION (NASDAQ:CTIB)
CTI Industries Corporation develops, produces and distributes various consumer products and sells these products throughout the United States and in over 35 other countries. The Company designs, manufactures and distributes film products. It is a developer of products, which employ flexible films, including balloons, pouches and rolls of film for vacuum sealing and storage of products in the home and films for commercial packaging applications. Its principal lines of products include Novelty Products, consisting of foil and latex balloons and other inflatable toy items, and also Candy Blossoms (small containers of arranged candy items, including a small inflated balloon); Vacuum Sealing Containers and Sealing Devices, which are for home and consumer use to vacuum seal, store and preserve food and personal items, and Flexible Films, for food and other commercial and packaging applications.
