TECHPRECISION CORPORATION (OTCMKTS:TPCS) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
On June 6, 2018, TechPrecision Corporation (the "Company"), through its wholly owned subsidiary Ranor, Inc. ("Ranor"), entered into a First Modification (the "Modification") to the Loan Agreement dated December 20, 2016 (the "Loan Agreement") between Ranor and Berkshire Bank, successor by merger to Commerce Bank & Trust Company ("Berkshire"). Under the Modification, Berkshire agreed to waive Ranor’s failure to maintain the required minimum debt service coverage ratio for the period ending March 31, 2018 on the condition that the Loan Agreement be modified to change the debt service coverage ratio. Ranor is still required to maintain a ratio between the Company’s cash flow to total debt service of at least 1.2 to 1.0, but the definitions of cash flow and total debt service were updated. Under the Modification, "cash flow" means an amount, without duplication, equal to the sum of net income of Guarantor plus (i) interest expense, (ii) taxes, (iii) depreciation and amortization, (iv) stock based compensation expense taken by the Guarantor, (v) non-cash losses and charges and one time or nonrecurring expenses at Berkshire’s discretion, less (vi) the amount of cash distributions, if any, made to the Company’s shareholders or owners, (vii) less cash taxes paid. The Modification added clause (v). In addition, as a result of the Modification, unfinanced capital expenditures made by the Company are no longer required to be deducted from cash flow. "Total debt service" means an amount, without duplication, equal to the sum of (i) cash interest paid by the Company on its liabilities, obligations and reserves, and (ii) all amounts expended by the Company in connection with current maturities of long-term debt and preferred dividends. The Modification clarified that only cash interest (as opposed to payment-in-kind interest) paid is included in “total debt service”.
The description of the Modification is qualified in its entirety by reference to the full text of the Modification, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
| 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 hereof is incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits. |
TECHPRECISION CORP ExhibitEX-10.1 2 tv496319_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 FIRST MODIFICATION TO LOAN AGREEMENT This FIRST MODIFICATION TO LOAN AGREEMENT (this "Agreement") is made as of the 6th day of June,…To view the full exhibit click here
About TECHPRECISION CORPORATION (OTCMKTS:TPCS)
TechPrecision Corporation is a manufacturer of fabricated and machined metal components and systems. The Company offers a range of services required to transform metallic raw materials into precision finished products. It sells finished products to its customers in three industry groups: defense, energy and precision industrial. Its primary business includes the business of its subsidiary, Ranor, Inc. Its operations in China are conducted through its subsidiary, Wuxi Critical Mechanical Components Co., Ltd. (WCMC). WCMC, through its subcontractors, provides precision component fabrication and machining solutions. Its manufacturing solutions include fabrication operations (cutting, press and roll forming, assembly, welding, heat treating, blasting and painting), and machining operations, including computer numerical controlled horizontal and vertical milling centers. Its projects include the manufacturing of products from various traditional, as well as specialty metal alloys.