Business Context and Reporting Period
Company: Optical Cable Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: February 28, 2017
Event: Entry into a Material Definitive Agreement (Second Loan Modification Agreement).
Key Financial Metrics
This filing focuses on debt facility terms rather than operational performance metrics. Specific data points include:
- Revolving Credit Facility Limit: $7.0 million.
- Outstanding Principal Balance: $4.4 million.
- Interest Rate: Adjusted LIBOR plus 2.50%.
- Liquidity: The modification preserves the full $7.0 million borrowing capacity.
Note: The filing text does not provide values for revenue, profit, cash flow, or margins.
Material Changes Versus Prior Period
The company modified its existing Revolving Credit Note originally entered into on April 26, 2016. Key changes include:
- Maturity Extension: The maturity date was extended to March 31, 2019.
- Removal of Reduction Provisions: Provisions requiring automatic reductions in the available borrowing amount (originally scheduled for February 28, 2017, and 2018) were removed.
- Capacity Maintenance: The collective maximum principal amount remains at $7.0 million, preventing a scheduled decrease in available funds.
Outlook, Risks, and Management Commentary
Management Commentary: The modification was executed to support the Company's working capital needs by maintaining full access to the credit line and extending the repayment horizon.
Terms: The Company may borrow, repay, and reborrow up to the $7.0 million limit until the new maturity date. Interest is due monthly, with all principal and accrued interest due at maturity.
Risks/Contingencies: The filing does not explicitly detail new risks, though the company remains subject to the terms of the Credit Agreement and the ability to service the $4.4 million outstanding debt.
Investor Verification Checklist
- Verify the current adjusted LIBOR rate to calculate the effective interest cost on the $4.4 million outstanding balance.
- Confirm the Company's working capital requirements to assess the necessity of maintaining the full $7.0 million facility.
- Review the full text of the Modification Agreement (Exhibit 4.1) for any covenants or conditions not summarized in the 8-K.
- Monitor future filings for any further amendments to the credit facility or changes in outstanding principal.