Attached files
| file | filename |
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| EX-10.1 - EXHIBIT 10.1 - SHARPS COMPLIANCE CORP | ex10_1.htm |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
June 20, 2016
Commission File Number: 001-34269
SHARPS COMPLIANCE CORP.
(Exact name of registrant as specified in its charter)
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Delaware
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74-2657168
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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9220 Kirby Drive, Suite 500, Houston, Texas
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77054
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(Address of principal executive offices)
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(Zip Code)
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(713) 432-0300
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01. | Entry into a Material Definitive Agreement. |
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
On June 20, 2016, the Company executed an amendment (the “Amendment”) to a credit agreement with a commercial bank entered into on April 9, 2015 (the “Credit Agreement”). The Amendment extends the maturity date of the Credit Agreement from April 9, 2017 to April 9, 2018 and adjusts certain covenants.
The Credit Agreement, provides for a two-year, $9.0 million line of credit facility, the proceeds of which may be utilized as follows: (i) $4.0 million for working capital, letters of credit (up to $1,000,000) and general corporate purposes and (ii) $5.0 million for acquisitions. Indebtedness under the Credit Agreement is secured by the Company’s accounts receivable and inventory with advances outstanding under the working capital portion of the credit facility at any time limited to a Borrowing Base (as defined in the Credit Agreement) equal to 80% of eligible accounts receivable plus 50% of eligible inventory. Advances under the acquisition portion of the credit facility are limited to 75% of the purchase price of an acquired company and convert to a five-year term note. Borrowings bear interest at WSJ Prime (for the working capital line) and WSJ Prime plus 0.25% (for the acquisition line) with a floor of 3.0%. The Company will pay a fee of 0.25% per annum on the unused amount of the line of credit.
The Credit Agreement contains affirmative and negative covenants that, among other things, require the Company to maintain a minimum level of tangible net worth, a minimum liquidity and a minimum debt service coverage ratio. The Credit Agreement also contain customary events of default which, if uncured, may terminate the Credit Agreement and require immediate repayment of all indebtedness to the lenders. The Amendment revised certain covenants requiring the Company to maintain a minimum level of tangible net worth of $7 million (a reduction from $12.5 million) and a minimum liquidity of $6 million (a reduction from $7.0 million).
The description of the Amendment contained herein is qualified in its entirety by reference to the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
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(d)
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Exhibits
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| 10.1 | First Amendment to Loan Agreement dated June 20, 2016, by and between Sharps Compliance, Inc. and a commercial bank. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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REGISTRANT:
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Dated: June 23, 2016
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Sharps Compliance Inc.
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By: /s/ DIANA P. DIAZ
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Vice President and Chief Financial Officer
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Index to Exhibits
| 10.1 | First Amendment to Loan Agreement dated June 20, 2016, by and between Sharps Compliance, Inc. and a commercial bank. |