ZOOM TELEPHONICS, INC. (OTCMKTS:ZMTP) Files An 8-K Entry into a Material Definitive Agreement

ZOOM TELEPHONICS, INC. (OTCMKTS:ZMTP) Files An 8-K Entry into a Material Definitive Agreement
Item 9.01 Entry into a Material Definitive Agreement.

The disclosures provided in Item 9.01 of this Current Report on Form 8-K are hereby incorporated by reference into this Item 9.01.
Item 9.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On February 4, 2021, Zoom Telephonics, Inc. (the “Company”) entered into an amendment (the “Amendment”) to that certain Financing Agreement, dated as of December 18, 2012 (the “Financing Agreement”), with Rosenthal & Rosenthal, Inc.
The Financing Agreement, as amended by the Amendment, increases the maximum revolving credit line to $5.0 million from its prior limit of $4.0 million. As of February 4, 2021, the Company had approximately $2.5 million of borrowings outstanding under the Financing Agreement. Advances under the revolving credit line are subject to a borrowing base formula and other terms and conditions as specified in the Financing Agreement. The Company anticipates that it will use the additional borrowing capacity provided by the increase in the maximum credit line as it deems appropriate to fund its working capital requirements. Borrowings are secured by all of the Company assets. The effective rate of interest under the Financing Agreement is 1.25% plus an amount equal to the higher of the prime rate or 3.25%.
The Financing Agreement contains certain covenants, including a requirement that the Company maintain tangible net worth of not less than $2.0 million and working capital of not less than $1.75 million. In addition, the Company is restricted from declaring any dividends, redeeming or repurchasing any stock, or making any other distributions in respect of its stock so long as any obligations remain outstanding. All advances made by lender are due and payable at lender’s demand upon at least sixty (60) days prior written notice to the Company. In addition, all obligations shall be immediately due and payable upon the termination of the Financing Agreement or upon the occurrence of any events of default relating to failure to make timely payments under the credit facility; breaches of representations, warranties or covenants; lender’s belief, reasonably exercised, that obligations under the credit facility are insecure or insufficient under circumstances where the Company is unable to provide other collateral satisfactory to the lender; bankruptcy and insolvency events and other customary matters. The lender has the right to terminate the Financing Agreement at any time by giving the Company sixty (60) days’ prior written notice. The Financing Agreement automatically renews from year to year, unless terminated by either party as specified in the Financing Agreement. The Company is required to pay a facility fee of 0.75% of the maximum credit facility each year.
The foregoing summary is subject to, and qualified in its entirety by, the full text of the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Material Modification to Rights of Security Holders.
The disclosures provided in Item 9.01 of this Current Report on Form 8-K are hereby incorporated by reference into this Item 9.01.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits.
Zoom Telephonics, Inc. Exhibit
EX-10.1 2 minm_ex101.htm AMENDMENT,…
To view the full exhibit click here

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About ZOOM TELEPHONICS, INC. (OTCMKTS:ZMTP)

Zoom Telephonics, Inc. designs, produces, markets, sells, and supports Internet access and other communications-related products, including cable modems, cable modem/routers, mobile broadband modems, asymmetrical digital subscriber line (ADSL or commonly DSL) modems, and dial-up modems. The Company’s products facilitate communication of data through the Internet. Its cable modems use the cable-Television cable and its DSL modems use the local telephone line to provide a link to the Internet. Its mobile broadband modems and its mobile broadband routers and sensors connect to the Internet through a mobile service provider’s mobile broadband network. Its dial-up modems link computers, point-of-purchase terminals, or other devices connect to each other or the Internet through the traditional telephone network. Its router products may communicate with a broadband modem for access to the Internet, and they may be used for local area network communications.

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