Power Solutions International, Inc. (NASDAQ:PSIX) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Credit Agreement with Wells Fargo
On March29, 2018, the Company entered into a sixth amendment (the “Sixth Amendment”) to the second amended and restated credit agreement, by and among the Company, Professional Power Products, Inc., Powertrain Integration Acquisition, LLC and Bi-Phase Technologies, LLC and Wells Fargo Bank, National Association, as agent for the lenders party thereto (“Wells Fargo”), and the lenders party thereto, dated as of June28, 2016, as amended by the first amendment and waiver thereto, dated as of August22, 2016, as amended by the second amendment and waiver thereto, dated as of December19, 2016, as amended by the third amendment, consent and waiver thereto, dated as of March31, 2017, as amended by the fourth amendment thereto, dated as of July17, 2017, and as amended by the fifth amendment thereto, dated as of October3, 2017 (as amended, the “Wells Fargo Agreement”). Amongst other things, the Sixth Amendment (i)increases the aggregate size of the asset based revolving facility to $75million, (ii)extends maturity of the facility to the earlier of March31, 2021 and 60 days prior to the final maturity of the Notes Debt (as defined in the Wells Fargo Agreement), (iii) modifies the Availability Block (as defined in the Wells Fargo Agreement) to the greater of $6.5million and 10% of the Borrowing Base (as defined in the Wells Fargo Agreement) but not more than $7.5million on or prior to September30, 2018, and thereafter to equal $9million, (iv)provides additional flexibility for including in the Borrowing Base certain designated foreign eligible accounts and (v)increases concentration limits on certain designated eligible accounts included in the Borrowing Base for certain customers.
The foregoing description of the Sixth Amendment is not complete and is qualified in its entirety by reference to the Sixth Amendment, a copy of which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information provided in Item 1.01 of this Current Report is incorporated herein by reference.
| Item 1.01 | Regulation FD Disclosure. |
A copy of the press release relating to the Sixth Amendment is attached to this Current Report as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 1.01 disclosure.
The information in Item 1.01 of this Current Report, including Exhibit 99.1 attached hereto, 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 Item 1.01 of this Current Report, including Exhibit 99.1 attached hereto, 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.
Caution Regarding Forward-Looking Statements
This Form 8-K Current Report includes information that constitutes forward-looking statements. These forward-looking statements are covered by the “Safe Harbor for Forward-Looking Statements” provided by the Private Securities Litigation Reform Act of 1995. The Company has tried to identify these forward-looking statements by using words such as “expect,” “contemplate,” “anticipate,” “estimate,” “plan,” “will,” “would,” “should,” “forecast,” “budgeted,” “believe,” “outlook,” “guidance,” “projection,” “target” or similar expressions, but these words are not the exclusive means for identifying such statements. The Company cautions that a number of risks, uncertainties and other factors could cause the Company’s actual results to differ materially from those expressed in, or implied by, the forward-looking statements, including, without limitation: the final results of the Audit Committee’s independent review as it impacts the Company’s accounting, accounting policies and internal control over financial reporting; management’s ability to successfully implement the Audit Committee’s remedial recommendations; the reasons giving rise to the prior resignation of
RSM US LLP as the Company’s independent registered public accounting firm; the time and effort required to complete the restatement of the affected financial statements, complete its delinquent financial statements and amend or prepare the related Form 10-K and Form 10-Q filings, particularly within the current anticipated timeline; the subsequent discovery of additional adjustments to the Company’s previously issued financial statements; the timing of completion of necessary re-audits, interim reviews and audits by the new independent registered public accounting firm; the timing of completion of steps to address, and the inability to address and remedy, material weaknesses; the identification of additional material weaknesses or significant deficiencies; variances in non-recurring expenses; risks relating to the substantial costs and diversion of personnel’s attention and resources deployed to address the financial reporting and internal control matters and related class action litigation; the ability of the Company to accurately budget for and forecast product shipments, and the extent to which product shipments result in recorded revenues; the impact of the resignation of the Company’s former independent registered public accounting firm, RSM US LLP, on the Company’s relationship with its lender and trade creditors and the potential for defaults and exercise of creditor remedies; the impact of the previously disclosed investigation initiated by the SEC and any related or additional governmental investigative or enforcement proceedings; the impact of resignations of the Company’s directors and certain executive officers and any delays and challenges encountered in recruiting replacements for open positions and the replacements’ transitions into their positions; and any negative impacts from delisting of the Company’s common stock from Nasdaq and any delays and challenges in obtaining a re-listing on a stock exchange. Actual events or results may differ materially from the Company’s expectations. The Company’s forward-looking statements are presented as of the date hereof. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
| Item 1.01 | Financial Statements and Exhibits. |
(d) Exhibits
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ExhibitNo. |
Description |
| 10.1 | Sixth Amendment to Second Amended and Restated Credit Agreement, dated as of March 29, 2018, by and among Power Solutions International, Inc., Professional Power Products, Inc., Powertrain Integration Acquisition, LLC and Bi-Phase Technologies, LLC and Wells Fargo Bank, National Association, as agent for the lenders party thereto, and the lenders party thereto. |
| 99.1 | Press release, dated March29, 2018. |
POWER SOLUTIONS INTERNATIONAL, INC. ExhibitEX-10.1 2 d555705dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 CONSENT,…To view the full exhibit click here
About Power Solutions International, Inc. (NASDAQ:PSIX)
Power Solutions International, Inc. is a producer and distributor of a range of low-emission power systems that run on non-diesel fuels, such as natural gas, propane and gasoline. The Company’s industrial power systems are used by original equipment manufacturers (OEMs) in a range of industries with a diversified set of applications, including stationary electricity generators, oil and gas equipment, forklifts, aerial work platforms, industrial sweepers, arbor equipment, agricultural and turf equipment, aircraft ground support equipment, construction and irrigation equipment, and other industrial equipment. The Company provides alternative fuel power systems for OEMs of off-highway industrial equipment and on-road medium trucks and busses. In addition to its emission-certified power systems, the Company produces and distributes non-emission-certified power systems for industrial OEMs for particular applications in markets without emission standards.