UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
Amendment to Credit Agreement, Amended and Restated Revolving Credit Note & Supplemental Revolving Credit Note
On December 29, 2022 (the “Amendment Date”), Pro-Dex, Inc. (the “Company”) entered into Amendment No. 2 to Amended and Restated Credit Agreement (the “Amendment”) with Minnesota Bank and Trust, a division of HTLF Bank (“MBT”), successor by merger to Minnesota Bank and Trust, which amends the Company’s Amended and Restated Credit Agreement and Amended and Restated Revolving Credit Note with MBT (as amended, the “Credit Agreement” and “Revolving Note,” respectively) and provides for a supplemental line of credit in the amount of $3,000,000 (the “Supplemental Note”). The Revolving Note has been amended to extend the maturity date of the Company’s existing revolving credit note with MBT from November 5, 2023 to December 29, 2024, to increase the Revolving Note facility from $2,000,000 to $7,000,000, and to increase the interest rate on the Revolving Note (as described below). The Revolving Note may be borrowed against from time to time by the Company through its maturity date on the terms set forth in the Credit Agreement. As of the date of this Current Report on Form 8-K, the Company’s has drawn $2,800,000 against the Revolving Note, the entire amount of which remains outstanding. Loan origination fees in the amount of $16,000 are payable to MBT in conjunction with the Revolving Note and Supplemental Note.
The Supplemental Note is evidenced by a Supplemental Revolving Credit Note dated as of the Amendment Date made by the Company in favor of MBT. The purpose of the Supplemental Note is for financing acquisitions and repurchasing shares of the Company’s common stock. The Supplemental Note may be borrowed against from time to time by the Company through its maturity date of December 29, 2024 on the terms set forth in the Credit Agreement. No amounts have been drawn on the Supplemental Note as of the date of this Current Report on Form 8-K.
The Revolving Note and Supplemental Note bear interest at an annual rate equal to the greater of (a) 5.0% or (b) SOFR for a one-month period from the website of the CME Group Benchmark Administration Limited (“CBA”) plus 2.5% (the “Adjusted Term SOFR Rate”). Commencing on the first day of each month after the Company initially borrows against the Revolving Note and/or Supplemental Note and each month thereafter until maturity, the Company is required to pay all accrued and unpaid interest on the Revolving Note and Supplemental Note through the date of payment. Any principal on the Revolving Note and/or Supplemental Note that is not previously prepaid by the Company shall be due and payable in full on the maturity date (or earlier termination of the Revolving Note and/or Supplemental Note).
Upon the occurrence and during the continuance of an event of default, the interest rate of the Revolving Note and Supplemental Note is increased by 3% and MBT may, at its option, declare the Revolving Note and Supplemental Note immediately due and payable in full.
The Credit Agreement, Revolving Note and Supplemental Note contain representations and warranties, affirmative, negative and financial covenants, and events of default that are customary for loans of this type.
Copies of the Amendment, Revolving Note and Supplemental Note are attached as exhibits to this Current Report on Form 8-K. The above descriptions are qualified by reference to the complete text of those documents. Copies of those documents are not intended to provide factual information about the Company. The representations, warranties, and covenants contained in those documents were made only for purposes of the transactions represented thereby as of the specific dates therein, are solely for the benefit of the Company and MBT, may be subject to limitations agreed upon by the Company and MBT, including, among others, being qualified by disclosures made for the purposes of allocating contractual risk between the parties instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under those documents and should not rely on the representations, warranties and covenants, or any descriptions thereof, as characterizations of the actual state of facts or condition of the Company. Moreover, information concerning the subject matter of representations and warranties contained in those documents may change after the date of those documents, which subsequent information may or may not be fully reflected in the Company’s public disclosures. Rather, investors and the public should look to the disclosures contained in the Company’s reports under the Securities Exchange Act of 1934, as amended, for information concerning the Company.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosures concerning the Amendment, Revolving Note and Supplemental Note contained in Item 1.01 above are incorporated into this Item 2.03 by this reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit Number | Description | |
| 10.1 | Amendment No. 2 to Amended and Restated Credit Agreement dated December 29, 2022 by and between Pro-Dex, Inc. and Minnesota Bank & Trust, a division of HTLF Bank. | |
| 10.2 | Amended and Restated Revolving Credit Note dated December 29, 2022 made by Pro-Dex, Inc. in favor of Minnesota Bank & Trust, a division of HTLF Bank. | |
| 10.3 | Supplemental Revolving Credit Note dated December 29, 2022 made by Pro-Dex, Inc. in favor of Minnesota Bank & Trust, a division of HTLF Bank. | |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: January 5, 2023 | Pro-Dex, Inc. | |
| By: | /s/ Alisha K. Charlton | |
| Alisha K. Charlton | ||
| Chief Financial Officer | ||
INDEX TO EXHIBITS
| Exhibit Number | Description | |
| 10.1 | Amendment No. 2 to Amended and Restated Credit Agreement dated December 29, 2022 by and between Pro-Dex, Inc. and Minnesota Bank & Trust, a division of HTLF Bank. | |
| 10.2 | Amended and Restated Revolving Credit Note dated December 29, 2022 made by Pro-Dex, Inc. in favor of Minnesota Bank & Trust, a division of HTLF Bank. | |
| 10.3 | Supplemental Revolving Credit Note dated December 29, 2022 made by Pro-Dex, Inc. in favor of Minnesota Bank & Trust, a division of HTLF Bank. | |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |