Business Context and Reporting Period
Company: Optical Cable Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: February 29, 2008
Event: Entry into a Material Definitive Agreement regarding the extension of commercial loan facilities with Valley Bank.
Key Financial Metrics and Debt Structure
This filing details the terms of two credit facilities rather than reporting operational financial performance metrics such as revenue or profit.
- Working Capital Facility: Up to $5,000,000 availability. Interest rate is LIBOR plus 2.15% (with a lower rate option available if specific depository balance limits are maintained). Borrowing limit is up to 85% of eligible accounts receivable.
- Machinery and Equipment Facility: Up to $2,000,000 availability. Interest rate is LIBOR plus 2.15%.
- Collateral: Both facilities are secured by accounts receivable, inventory, furniture, fixtures, equipment, and proceeds.
- Repayment Terms: Payable on demand with 60 days prior written notice, provided the Company is not in default.
Material Changes Versus Prior Period
The primary change reported is the extension of the maturity dates for the existing credit facilities originally entered into on September 22, 2006.
- Previous Expiration: February 28, 2008.
- New Expiration: April 28, 2008.
- Terms: All other material terms of the facilities remain unchanged.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future operations, or specific risk factors beyond the standard terms of the loan agreements.
Contingencies: The loans are payable on demand if the Company is not in default, subject to 60 days prior written notice. The interest rate on the Working Capital Facility is contingent on maintaining specified depository balances with Valley Bank.
Important Facts for Investor Verification
- Verify the Company's current utilization of the $5 million working capital and $2 million equipment lines.
- Confirm whether the Company maintains the depository balance limits required to secure the lower interest rate option on the Working Capital Facility.
- Monitor the Company's ability to meet the "payable on demand" clause if a default event occurs.
- Note that this filing does not provide data on revenue, net income, or cash flow; refer to the most recent 10-Q or 10-K for operational performance.