Business Context and Reporting Period
Company: Optical Cable Corp
Filing Type: Form 8-K (Current Report)
Date of Report: July 25, 2012
Event: Entry into a Material Definitive Agreement regarding the renewal of a revolving credit facility.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or liquidity ratios. It details the terms of a specific debt instrument:
- Facility Type: Revolving credit facility (Commercial Note) with SunTrust Bank.
- Maximum Borrowing Limit: The lesser of $6,000,000 or a borrowing base formula (85% of eligible receivables + 35% of eligible foreign receivables + 25% of eligible raw materials inventory).
- Interest Rate: The greater of LIBOR plus 2% or 3%.
- Payment Terms: Interest payable monthly; principal and accrued interest due at maturity.
Material Changes
The Company extended the maturity date of its existing Commercial Loan, originally due May 31, 2012. A binding letter of renewal dated July 25, 2012, extends the maturity date to May 31, 2014. This follows a previous renewal in July 2011 that extended the term to 2013.
Outlook, Risks, and Management Commentary
The filing indicates the Company continues to utilize this facility for working capital needs. No specific forward-looking guidance, risk factors, or unusual items were disclosed in this report beyond the standard terms of the credit agreement.
Investor Verification Checklist
- Verify the current outstanding principal balance under the $6,000,000 facility.
- Confirm the Company's compliance with the borrowing base formula (receivables and inventory levels).
- Review the Company's ability to service monthly interest payments at the current LIBOR rate plus 2% (or 3% floor).
- Check for any subsequent amendments to the credit agreement post-July 2012.