SMITH-MIDLAND CORPORATION (OTCMKTS:SMID) Files An 8-K Entry into a Material Definitive AgreementITEM 1.01Entry into a Material Definitive Agreement.
The disclosures set forth in Item 2.03 are incorporated by reference to this item.
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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. |
Line of Credit
On November 30, 2017, Smith-Midland Corporation, (the "Company"), completed the refinancing of its matured line of credit with Summit Community Bank for $2,000,000 under substantially the same terms and in the same amount. The loan is collateralized by a first lien position on the Company's accounts receivable and inventory and a second lien position on all other business assets. The interest rate is equal to the Wall Street Journal prime rate with an initial rate of 4.25% and a floor of 3.99% per annum, adjustable every month with interest only payments due on a monthly basis. The loan matures on September 12, 2018. Advances on the line of credit are made at the request of the Company. Currently there have been no advances under the line of credit.
Key provisions of the line of credit require the Company, (i) to obtain bank approval for capital expenditures in excess of $1,500,000 during the term of the loan; (ii) to maintain a minimum tangible equity of $5,000,000; and (iii) to obtain bank approval prior to its funding any acquisition.
The foregoing does not purport to be complete and is qualified in its entirety by reference to the Loan Application, the Commitment Letter and the Promissory Note, copies of which are attached hereto as exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.
Equipment Purchase Commitment
On November 28, 2017, the Company received a Commitment Letter from Summit Community Bank to provide a guidance line of credit specifically to purchase business equipment in the amount of $1,500,000. The commitment provides for the purchase of equipment with minimum advances of $50,000 for which a promissory note will be executed with a term not to exceed five years and a per annum interest rate calculated at the Wall Street Journal prime rate plus .5%. The loan is collateralized by a first lien position on all equipment purchased under the line. The commitment for the guidance line of credit matures on November 29, 2018. Currently there have been no advances under the Guidance line of credit.
The key provisions of the guidance line of credit are the same as those of the Summit Community Bank line of credit more fully described above.
The foregoing does not purport to be complete and is qualified in its entirety by reference to the Commitment Letter and the Application for the Guidance Line of Credit, copies of which are attached hereto as exhibits 10.4 and 10.5, respectively, and incorporated herein by reference.
Note Payable
On November 30, 2017, the Company completed the refinance of its existing short-term note payable with Summit Community Bank in the amount of $239,232. The loan is collateralized by a 3rd lien position on the Credit Line Deed of Trust of the land described therein in the amount of $239,232. The interest rate is fixed at 3.99% per annum, with interest payments due monthly. The loan matures on May 23, 2018.
The key provisions of the note payable are the same as those of the Summit Community Bank line of credit more fully described above.
The foregoing does not purport to be complete and is qualified in its entirety by reference to the Loan Application, the Commitment Letter and the Promissory Note, copies of which are attached hereto as exhibits 10.6, 10.7and 10.8 respectively, and are incorporated herein by reference.
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ITEM 9.01 |
FINANCIAL STATEMENTS AND EXHIBITS |
(d)Exhibits
Exhibit No.Exhibit Description
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10.1 |
Loan Application for the line of credit dated September 12, 2017.
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SMITH MIDLAND CORP ExhibitEX-10.1 2 a101lineofcreditapplicat….To view the full exhibit click here
About SMITH-MIDLAND CORPORATION (OTCMKTS:SMID)
Smith-Midland Corporation invents, develops, manufactures, markets, leases, licenses, sells and installs a range of precast concrete products for use in the construction, highway, utilities and farming industries, through its subsidiaries. The Company’s precast and barrier rental customers are primarily general contractors and federal, state, and local transportation authorities located in the Mid-Atlantic, Northeastern, Midwestern and Southeastern regions of the United States. It offers products, including Easi-Set SlenderWall Lightweight Construction Panels, Easi-Set Sierra Wall, Easi-Set Precast Building and Easi-Span Expandable Precast Building, Easi-Set Utility Vault, SoftSound Soundwall Panels, Beach Prisms Erosion Control Modules and H2Out Secondary Drainage System. Its precast subsidiaries also produce farm products, such as cattleguards and water and feed troughs, as well as custom order precast concrete products with various architectural surfaces.