TECOGEN INC. (NASDAQ:TGEN) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry Into a Material Definitive Agreement.
On May 4, 2018 (the "Closing Date"), Tecogen Inc. (the "Company') and its wholly owned subsidiaries, American DG Energy Inc. ("ADGE") and TTcogen LLC (collectively the "Borrowers"), entered into a Credit Agreement (the "Credit Agreement") with Webster Business Credit Corporation (the "Lender"), that provides Borrowers a line of credit of up to $10 million on a revolving and secured basis, with availability based on Borrowers' accounts receivables, raw materials, and finished goods. Funds borrowed under the Credit Agreement are payable on the third anniversary of the Closing Date.
Borrowings under the Credit Agreement bear interest at a rate equal to, at the Borrower's option, either (1) One Month LIBOR, plus 3.00%, or (2) Lender's Base Rate, plus 1.5%. Lender's Base Rate is the highest of (a) the Federal Funds rate plus 0.5%, (b) Lender's Prime rate as adjusted by Lender from time to time, and (c) One Month LIBOR, plus 2.75%.
The Credit Agreement contains customary events of default and customary affirmative and negative covenants, including financial covenants, limitations on certain indebtedness, liens, acquisitions and other investments, fundamental changes, and asset dispositions.
On the Closing Date the Borrower drew down $1,034,601.11 under the Credit Agreement. $919,590.58 was used to repay the balance due to Mr. John N. Hatsopoulos, a director of the Company. The Company assumed an outstanding debt due to Mr. Hatsopoulos of $850,000, with an interest rate of 6% per year, from American DG Energy Inc. on May 18, 2017, when the Company's subsidiary merged with ADGE. The remaining amount drawn down was used to cover certain closing costs under the Credit Agreement.
The foregoing description of theCreditAgreementis a summary and does not purport to be complete and is qualified in its entirety by reference to the full text of theCreditAgreement.
Item 2.03 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 — Entry into a Material Definitive Agreement” is hereby incorporated into this Item 2.03 by reference.
Item 7.01 Regulation FD Disclosure.
On May 8, 2018, the Company issued a press release discussing the above-referenced items. The information contained in this Item 7.01 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.01 related to Item 7.01 shall be deemed furnished.
ExhibitDescription
TECOGEN INC. ExhibitEX-99.01 2 tgen_wbccpressrelease5818.htm EXHIBIT 99.01 Exhibit Tecogen Secures Revolving Line of Credit for up to $10 MillionWALTHAM,…To view the full exhibit click here
About TECOGEN INC. (NASDAQ:TGEN)
Tecogen Inc. designs, manufactures, sells and maintains cogeneration products, including combined heat and power (CHP), air conditioning systems and water heaters for residential, commercial, recreational and industrial use. The Company is engaged in the business of manufacturing and supporting CHP products based on engines fueled by natural gas. The Company manufactures over three types of CHP products, such as cogeneration units that supply electricity and hot water, chillers that provide air-conditioning and hot water, and water heaters. Its commercial product line includes the InVerde, InVerde e+ and TECOGEN cogeneration units; TECOCHILL chillers; Ilios high-efficiency water heaters, and Ultera emissions control technology. Its customers include hospitals and nursing homes, hotels and motels, office and retail buildings, and military installations. Its cogeneration systems and chillers use the engine, the TecoDrive 7400 model.
