Oakridge Holdings, Inc. (OTCMKTS:OKRG) Files An 8-K Entry into a Material Definitive Agreement
Item1.01. Entry into a Material Definitive Agreement.
The information set forth below in Item1.03 of this Current
Report on Form 8-K (this Form 8-K) regarding the DIP Loan
Agreement (as defined below) is incorporated herein by reference.
Item1.02. Termination of a Material Definitive
Agreement
As previously disclosed, Oakridge Financial, Inc. (we or the
Company) and our operating subsidiary, Stinar HG, Inc., a
Minnesota corporation (Stinar) entered into an Asset Purchase
Agreement, dated June 20, 2016, with Kruckeberg Industries, LLC,
a Delaware limited liability company, to which Kruckeberg
Industries, LLC proposed to acquire substantially all of the
assets of Stinar.
As previously disclosed in connection with the Asset Purchase
Agreement, Stinar and Kruckeberg Industries, LLC entered into a
Management Agreement, dated October 6, 2016, to which Kruckeberg
Industries, LLC provided certain operational and management
services to Stinar, pending the closing of the transactions
contemplated in the Asset Purchase Agreement.
The Company, Stinar and Kuckeberg Industries, LLC have determined
that we will not close on the transactions contemplated by the
Asset Purchase Agreement in accordance with its terms. As a
result, we have mutually agreed to terminate the Asset Purchase
Agreement and the related Management Agreement. On May 22, 2017,
the Company and Stinar entered into a termination agreement with
Kruckeberg Industries, LLC wherein, we have terminated the Asset
Purchase Agreement, dated June 20, 2016 (as subsequently amended)
and the Management Agreement, dated October 6, 2016. Under the
Termination Agreement, the parties agreed that the current
outstanding charges under the Management Agreement for services
rendered and expenses incurred will remain outstanding,
enforceable obligations of Stinar until those amounts are paid or
discharged according to legal process. Current outstanding
charges for services rendered and expenses incurred totaled
approximately $71,820.00, as of May 22, 2017. As part of the
Termination Agreement, the Company and Stinar have granted
Kruckeberg Industries, LLC a release of any and all obligations,
liabilities and claims. The Termination Agreement does not
terminate certain indemnification rights that Kruckeberg
Industries, LLC may be entitled to under the Management
Agreement.
The foregoing is qualified in its entirety by reference to the
Termination Agreement, filed as Exhibit 10.1 hereto and
incorporated herein by reference.
Item1.03. Bankruptcy or Receivership.
On May 22, 2017 (the Petition Date), Oakridge Financial, Inc. and
Stinar (together with the Company, the Debtors) filed voluntary
petitions in the United States Bankruptcy Court for the District
of Minnesota (the Bankruptcy Court) seeking relief under Chapter
11 of Title 11 of the United States Code (the Bankruptcy Code).
The Chapter 11 Cases are being administered under the captions In
re Oakridge Financial, Inc., Case No. 17-31669 and In re Stinar
HG, Inc., dba Stinar Corporation Case No. 17-341670 (the Chapter
11 Cases).. The Debtors continue to operate their businesses and
manage their properties as debtors-in-possession under the
jurisdiction of the Bankruptcy Court and in accordance with the
applicable provisions of the Bankruptcy Code and orders of the
Bankruptcy Court.
DIP Loan Agreement
In connection with the Chapter 11 Cases, the Debtors filed
motions seeking Bankruptcy Court approval of debtor-in-possession
financing on the terms set forth in that certain
Debtor-In-Possession Loan Agreement, dated as of May 22, 2017
(the DIP Loan Agreement), by and among the Debtors and Krukeberg
Industries, LLC, as Lender.
to the terms of the DIP Loan Agreement, the Lender has agreed to
loan Stinar an aggregate principal amount of not more than
$325,000. Not more than $100,000 of the aggregate amount may be
borrowed under the DIP Loan Agreement during the period from the
Petition Date to May 31, 2017. Advances under the DIP Loan
Agreement will become available upon the satisfaction of
customary conditions precedent thereto, including the entry of an
order of the Bankruptcy Court approving the DIP Loan Agreement.
Under the DIP Loan Agreement, Stinar is entitled to borrow and
prepay advances. Amounts advanced and repaid, however, may not be
re-borrowed under the DIP Loan Agreement.
The Debtors anticipate using the proceeds of the DIP Loan
Agreement primarily for (i)for purposes permitted by orders of
the Bankruptcy Court, including ongoing debtor-in-possession
working capital purposes, (ii)the payment of fees, costs and
expenses, and (iii)other general corporate purposes, in each
case, only to the extent permitted under applicable law, the DIP
Loan Agreement, the orders of the Bankruptcy Court, and in
accordance with the approved budget, and further subject to
certain exceptions as set forth in the DIP Loan Agreement. The
DIP Loan Agreement provides for the Companys use of certain DIP
Loan Agreement proceeds in accordance with the budget and other
terms and conditions.
The maturity date of the DIP Loan Agreement is the earliest of
(a) July 6, 2017 (45 calendar days after the Petition Date), if
the Bankruptcy Court has not entered a final borrowing order on
or before that date; (b) September 19, 2017 (120 calendar days
after the Petition Date); (c) the date on which a plan of
reorganization for Debtors, in a form and substance satisfactory
to the DIP Lender, in its sole and absolute discretion, becomes
effective; and (d) the occurrence and continuation of certain
other customary events of default, including the failure of
certain customary milestone events identified in the DIP Loan
Agreement.
Subject to certain exceptions, advances under the DIP Loan
Agreement will be secured by a first priority perfected security
interest in substantially all of the assets of the Debtors. The
security interests and liens are subject only to certain carve
outs and permitted liens, as set forth in the DIP Loan Agreement.
Advances under the DIP Loan Agreement are subject to certain
covenants, including, without limitation, covenants related to
the incurrence of additional debt, liens, the Companys failure to
comply with the approved budget and certain bankruptcy related
covenants, in each case as set forth in the DIP Loan Agreement.
The foregoing description of the DIP Loan Agreement does not
purport to be complete and is qualified in its entirety by
reference to the DIP Loan Agreement filed as Exhibit 10.2 hereto
and incorporated herein by reference.
Item2.03. Creation of a Direct Financial Obligation or
Obligation under an Off Balance Sheet Arrangement of a
Registrant.
The items set forth above in Item1.03 of this Form 8-K regarding
the DIP Loan Agreement are hereby incorporated herein by
reference.
Item2.04. Triggering Events that Accelerate or Increase a
Direct Financial Obligation or an Obligation under an Off Balance
Sheet Arrangement.
The commencement of the Chapter 11 Cases described above
constitutes an event of default under certain secured promissory
notes and the related security agreements to which Stinar is a
party, including: Stinars promissory note, originally dated
February 1, 2013, payable to Bank ($831,715 currently outstanding
as of May 4, 2017), Stinars promissory note dated April 19, 2013,
payable to Twin Cities Metro Certified Development Co. ($629,830
currently outstanding as of May 4, 2017) and Stinars promissory
note dated May 22, 2008, payable to Bank ($300,767 outstanding as
of May 4, 2017). As a result of the filing of the Chapter 11
Cases, and of the promissory notes (with accrued interest
thereon) and all other amounts outstanding under the related
security agreements to which Stinar is a party became immediately
due and payable. As a result of the filing of the Chapter 11
Cases, the lender may seek immediate payment of outstanding
principal and interest, plus costs of collection, including
attorneys fees and disbursements.
Item7.01. Regulation FD Disclosure.
Additional information on the Chapter 11 Cases, including access
to documents filed with the Bankruptcy Court and other general
information about the Chapter 11 Cases, is available at a
subscription based service known as PACER, at
https://ecf.mab.uscourts.gov/cgi-bin/login.pl.
The information in Item7.01 of this Form 8-K is being furnished
and shall not be deemed filed for purposes of Section18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act),
or otherwise subject to the liabilities of such section. The
information in Item7.01 of this Form 8-K shall not be
incorporated by reference into any filing under the Securities
Act of 1933, as amended, or the Exchange Act, regardless of any
incorporation by reference language in any such filing.
Item 8.01. Other Events.
The Company cautions its security holders that trading in the
Companys securities during the pendency of the Chapter 11 Cases
will be highly speculative and will pose additional, substantial
risks in addition to the various risks that the Company has
previously disclosed in its registration statements filed under
the Securities Act of 1933, as amended, and periodic reports and
schedules filed under the Exchange Act. Trading prices for the
Companys securities may not bear any substantive relationship to
any recovery that the Companys security holders may obtain in the
Chapter 11 Cases. In that context, the Company cannot provide any
assurance in respect of the scope or amount, nature, or timing of
any recovery for any such holders. Accordingly, we urge extreme
caution with respect to existing and future investments in our
securities. A plan of reorganization, sale of assets or
liquidation may result in the holders of the Companys securities
receiving little or no distribution in respect of their interests
and cancellation of their existing securities. If certain
requirements of the Bankruptcy Code are met, a Chapter 11 plan of
reorganization could be confirmed notwithstanding its rejection
by our security holders and notwithstanding the fact that such
security holders do not receive or retain any property on account
of their security interests under such plan.
Forward-Looking Statements
This report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
relating to the Companys operations, results of operations and
other matters that are based on the Companys current
expectations, estimates, forecasts and projections. Words, such
as anticipate, believe, could, expect, estimate, intend, may,
opportunity, plan, positioned, potential, project, should, and
will and similar expressions, are intended to identify these
forward-looking statements. These statements are not guarantees
of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Forward-looking
statements are based on assumptions as to future events that may
not prove to be accurate. For a more detailed discussion of these
risks, see the information under the Risk Factors heading in the
Companys Annual Report on Form 10-K for the year ended June 30,
2016 and the Companys Quarterly Report on Form 10-Q for the three
months ended September 30, 2016, and other documents filed with
or furnished to the SEC. Other than as required by law, the
Company undertakes no obligation to publicly update any
forward-looking statements in light of new information or future
events. Readers are cautioned not to put undue reliance on
forward-looking statements.
Item9.01. Financial Statements and Exhibits.
| (d) |
Exhibits |
The Exhibit Index appearing after the page to this Current Report
on Form 8-K is incorporated herein by reference.
About Oakridge Holdings, Inc. (OTCMKTS:OKRG)
Oakridge Holdings, Inc. operates through aviation ground support equipment business segment. The Company and its subsidiary, Stinar Corporation (Stinar), operate the aviation ground support equipment business. Stinar is a manufacturer of ground support equipment, and provides products and services to the aviation industry in approximately three areas, such as sales of new equipment manufactured for maintaining, servicing and loading of airplanes; sales of parts for equipment sold in the past, and repair of equipment. Stinar’s products include truck-mounted stairways and push stairs for loading aircraft; lavatory trucks and carts, water trucks, bobtails and catering trucks for servicing aircraft; cabin cleaning trucks, maintenance hi-lifts and turbo oilers for maintaining aircraft, and other custom built aviation ground support equipment used by airports, airlines and the military. Stinar provides service and repairs on equipment it has sold and also on other vendors’ equipment. Oakridge Holdings, Inc. (OTCMKTS:OKRG) Recent Trading Information
Oakridge Holdings, Inc. (OTCMKTS:OKRG) closed its last trading session 00.0000 at 0.0200 with 1,100 shares trading hands.