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Note
11 Subsequent Events
Credit
Facility — Avidbank
On
April 20, 2016, the Company amended its revolving credit facility with Avidbank. The new renewable revolving maturity date is
January 22, 2018. The facility provides up to $2 million in financing against eligible receivables and is subject to meeting certain
covenants including an asset coverage ratio test for up to twenty months. The material terms of the amended revolving credit facility
are as follows:
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The
interest rate for all advances shall be the then in effect prime rate plus 2.5% and is subject to a minimum interest payment
requirement per six month period of $10,000. |
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Interest
shall be paid monthly in arrears. |
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A facility
fee of (0.5%) of the revolving line ($10,000) is due on May 22, 2016 and each anniversary thereof for so long as the revolving
credit facility is in effect. |
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The
loan period is from April 20 through January 22, 2018 at which time any outstanding advances, and accrued and unpaid interest
thereon, will be due and payable. |
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The
obligations of Optex Systems, Inc. to Avidbank are secured by a first lien on all of its assets (including intellectual property
assets should it have any in the future) in favor of Avidbank. |
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The
facility contains customary events of default. Upon the occurrence of an event of default that remains uncured after any applicable
cure period, Avidbank’s commitment to make further advances may terminate, and Avidbank would also be entitled to pursue
other remedies against Optex Systems, Inc. and the pledged collateral. |
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Pursuant
to a guaranty executed by Optex Systems Holdings in favor of Avidbank, Optex Systems Holdings has guaranteed all obligations
of Optex Systems, Inc. to Avidbank. |
Investor
Relations - IRTH Communications
On
April 6, 2016 Optex Systems Holdings Inc. executed an investor relations services agreement with IRTH Communications. The material
terms of the agreement are as follows:
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An initial retainer of $7,500, followed by 11
consecutive monthly payments of $7,500. |
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A single one-time retainer payment of 40,000
shares of the Company’s common stock; which shares shall be “Restricted Securities” pursuant to the provisions
of rule 144. |
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Reimbursement of any reasonable out-of-pocket
cost and expenses, approved by the Company in advance. |
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The term of the agreement is 12 months, expiring
on April 5, 2017, and shall automatically renew for an additional 12 month term on each yearly anniversary date unless the
Company gives notice to IRTH of an intention to terminate at the expiration of the original term. |
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Continued payments of $7,500 per month plus
a one-time payment of $100,000 worth of retainer shares of the Company’s common stock on renewal; which shares shall
be “Restricted Securities” pursuant to the provisions of rule 144. |
On
April 29, 2016, Optex Systems Holdings, Inc. issued 40,000 common “restricted” shares at a market price of $2.35 per
share ($94,000) in support of the IRTH Communications agreement.
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