Katy Industries,Inc. (OTCMKTS:KATY) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

On April3, 2017, Katy Industries,Inc. (the Company), Continental
Commercial Products, LLC (CCP), FTW Holdings,Inc. (FTW Holdings),
Fort Wayne Plastics,Inc. (Fort Wayne and, together with the
Company, CCP, and FTW Holdings, the Borrowers, and each, a
Borrower) entered into the Sixth Amendment (the Sixth Amendment)
to the Second Lien Credit and Security Agreement, dated as of
April7, 2015 (as amended from time to time, the VPC Credit
Agreement), among the Borrowers, Victory Park Management, LLC, in
its capacity as administrative agent and collateral agent (the
Agent), and the lenders party to the Sixth Amendment (the
Lenders).

The Sixth Amendment provides for, among other things (i)the
incurrence by the Borrowers of additional debt in the amount of
$1 million under the VPC Credit Agreement and (ii)the use of the
proceeds of such additional debt to provide incremental liquidity
to the Borrowers by reducing the outstanding balance under the
revolving credit facility of the Borrowers under the Credit and
Security Agreement, dated as of November16, 2016 (as amended from
time to time, the Encina Credit Agreement), among the Borrowers,
certain affiliates of the Borrowers, Encina Business Credit SPV,
LLC, as agent and swing line lender (Encina), and the lenders
party to the Encina Credit Agreement.

In connection with the Sixth Amendment, on April3, 2017, CCP
entered into a consent and acknowledgement (the Consent and
Acknowledgement) with Encina. Encina (i)consented to the
Borrowers incurring additional indebtedness to the terms and
conditions of the Sixth Amendment and (ii)agreed that the
proceeds of the additional indebtedness to the Sixth Amendment,
upon remittance to and receipt by Encina, shall be applied by
Encina to reduce outstandings under the Revolving Credit Facility
(as defined in the Encina Credit Agreement) in accordance with
Section2.05(b)(vi)of the Encina Credit Agreement to provide,
dollar-for-dollar, the Borrowers with incremental liquidity.
Encina also agreed to grant Borrower an extension of delivery for
the business plan until April7, 2017. Failure of Borrowers to
deliver the business plan prior to April7, 2017 shall constitute
an immediate event of default under the Encina Credit Agreement.

The foregoing descriptions of the Sixth Amendment and Consent and
Acknowledgement do not purport to be complete and are subject to,
and qualified in their entirety by, the full text of the Sixth
Amendment and Consent and Acknowledgement, a copy of each which
is filed as Exhibit10.1 and 10.2, respectively, to this Current
Report on Form8-K and are 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 disclosure set forth under Item 1.01 of this Current Report
on Form8-K is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits.

About Katy Industries, Inc. (OTCMKTS:KATY)

Katy Industries, Inc. is a manufacturer, importer and distributor of commercial cleaning and consumer storage products, as well as a contract manufacturer of structural foam products. The Company’s subsidiary is Continental Commercial Products, LLC, which includes four business units: Continental, Wilen, Contico and Fort Wayne Plastics. The Continental business unit is a plastics manufacturer and an importer and distributor of products for the commercial janitorial/sanitary maintenance, industrial and foodservice markets. The Wilen business unit is a manufacturer, importer and distributor of cleaning products that include mops, brooms and sweeps, poles and handles, microfiber, brushes and plastic cleaning accessories. The Contico business unit is a plastics manufacturer and distributor of garage, shelving, tool and other home storage products. The Fort Wayne Plastics business unit is a contract manufacturer for various original equipment manufacturers.

Katy Industries, Inc. (OTCMKTS:KATY) Recent Trading Information

Katy Industries, Inc. (OTCMKTS:KATY) closed its last trading session 00.000 at 0.110 with 1,126 shares trading hands.