UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): October 25, 2019
Blonder Tongue Laboratories, Inc.
(Exact Name of registrant as specified
in its charter)
Delaware
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1-14120
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52-1611421
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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One Jake Brown Road, Old Bridge, New
Jersey 08857
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number,
including area code: (732) 679-4000
Not Applicable
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐
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Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $.001
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BDR
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NYSE American
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Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01
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Entry into a Material Definitive Agreement
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On October 25, 2019, Blonder Tongue Laboratories, Inc. (the
“Company” or “Borrower”), R. L. Drake Holdings, LLC, a wholly-owned subsidiary of the Company (“R.
L. Drake”), Blonder Tongue Far East, LLC, a wholly-owned subsidiary of the Company (“Blonder Tongue Far East”)
and MidCap Business Credit LLC (as lender, “MidCap”) entered into a Loan and Security Agreement (All Assets) (the “Loan
Agreement”).
The Loan Agreement provides the Company with a credit facility
comprising a $5,000,000 revolving line of credit. The credit facility matures following the third anniversary of the Loan Agreement.
Interest on the amounts outstanding under the Loan Agreement is variable, based upon the three-month LIBOR rate plus a margin of
4.75%, subject to re-set each month. All outstanding indebtedness under the Loan Agreement is secured by all of the assets of the
Company and its subsidiaries, and is guaranteed by R. L. Drake and Blonder Tongue Far East.
The Company expects to use the proceeds received under the Loan
Agreement for working capital and general corporate purposes in the ordinary course of its business.
The Loan Agreement contains customary covenants, including restrictions
on the incurrence of additional indebtedness, the payment of cash dividends or similar distributions, the repayment of any subordinated
indebtedness and the encumbrance, sale or other disposition of assets. Events of default under the Loan Agreement include Borrower’s
payment defaults, material misrepresentations, uncured breaches of covenants, cross defaults with certain other indebtedness, bankruptcy
and insolvency events, changes of control and the occurrence of certain material adverse events.
Borrower also is obligated to pay MidCap certain fees and charges,
including (i) a facility fee equal to 1.00% times the credit limit under the Loan Agreement, (ii) an annual fee equal to 0.75%
times the credit limit under the Loan Agreement, (iii) audit fees in connection with any audits or inspections by MidCap or its
agents of collateral or Borrower’s operations or business (not to exceed $12,500 in any 12 month period), (iv) a collateral
monitoring charge of $2,500 per month and (v) an unused line fee of 0.50% per annum on the daily average of the credit limit reduced
by outstanding advances.
The Loan Agreement and the related agreements summarized herein
replace the Company’s borrowing facilities under its Loan and Security Agreement with Sterling National Bank (as lender and
as administrative agent) (as amended, the “Sterling Loan Agreement”) and certain related agreements (as amended, collectively,
the “Additional Sterling Agreements”). The Sterling Loan Agreement and Additional Sterling Agreements have been terminated.
Contemporaneously with the entry into the Loan Agreement, (i)
the Company and MidCap entered into a Pledge and Security Agreement (the “Pledge Agreement”), pursuant to which the
obligations of Borrower under the Loan Agreement are secured by Borrower’s pledge and assignment of all of its right, title
and interest in the membership interests of R. L. Drake and Blonder Tongue Far East (including rights to receive dividends, distributions
and other proceeds relating to Borrower’s ownership interest), (ii) Borrower, R. L. Drake and MidCap entered into a Patent
and Trademark Security Agreement (the “Security Agreement”), pursuant to which Borrower and R. L. Drake pledged and
assigned their interests in their Patents and Trademarks (as defined in the Security Agreement) to secure the obligations of Borrower
under the Loan Agreement and (iii) Blonder Tongue Far East and R. L. Drake entered into a Continuing Guaranty (the “Guaranty
Agreement”) with MidCap, whereby in the event of default by Borrower, Blonder Tongue Far East and R. L. Drake jointly and
severally agree to perform under the Loan Agreement.
The foregoing summaries of the Loan Agreement, the Pledge Agreement,
the Security Agreement and the Guaranty Agreement are not complete and are qualified in their entirety by reference to the full
text of those agreements, which are attached hereto as Exhibit 10.1, Exhibit 10.3 , Exhibit 10.4, and Exhibit 10.5, respectively,
and are incorporated herein by reference.
Item 1.02
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Termination of a Material Definitive Agreement
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In connection with the entry into the Loan Agreement, on October
25, 2019, the Company repaid all remaining amounts outstanding under the Sterling Loan Agreement, and the Sterling Loan Agreement
and Additional Sterling Agreements were terminated and all outstanding liens thereunder were released.
Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
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The information contained in Item 1.01 above is hereby incorporated
by reference into this Item 2.03. Upon a default under the Loan Agreement, including the non-payment of principal or interest,
the obligations of Borrower may be accelerated and MidCap may pursue its rights under the Loan Agreement, the Pledge Agreement,
the Security Agreement, the Guaranty Agreement, the Uniform Commercial Code and/or any other applicable law or in equity.
On October 30, 2019, the Company issued a press release regarding
the entry into the Loan Agreement. A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form
8-K and incorporated by reference herein.
Item 9.01
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Financial Statements and Exhibits
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(d)
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Exhibits. The following exhibits are filed herewith:
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Exhibit No.
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Description
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10.1
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Loan and Security Agreement dated as of October 25, 2019 by and between MidCap Business Credit LLC, Blonder Tongue Laboratories, Inc., R. L. Drake Holdings, LLC and Blonder Tongue Far East, LLC.
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10.2
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Form of Revolving Note.
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10.3
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Pledge and Security Agreement dated as of October 25, 2019 by and between Blonder Tongue Laboratories, Inc. and MidCap Business Credit LLC.
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10.4
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Patent and Trademark Security Agreement dated as of October 25, 2019 by and between Blonder Tongue Laboratories, Inc., R. L. Drake Holdings, LLC and MidCap Business Credit LLC.
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10.5
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Continuing Guaranty dated as of October 25, 2019 of Blonder Tongue Far East, LLC and R. L. Drake Holdings, LLC, as Guarantors, in favor of MidCap Business Credit LLC.
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99.1
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Press Release Dated October 30, 2019.
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SIGNATURE
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.
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BLONDER TONGUE LABORATORIES, INC.
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By:
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/s/ Eric Skolnik
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Eric Skolnik
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Senior Vice President and Chief Financial Officer
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Date: October 30, 2019
EXHIBIT INDEX
Exhibit No.
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Description
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10.1
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Loan and Security Agreement dated as of October 25, 2019 by and between MidCap Business Credit LLC, Blonder Tongue Laboratories, Inc., R. L. Drake Holdings, LLC and Blonder Tongue Far East, LLC.
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10.2
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Form of Revolving Note.
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10.3
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Pledge and Security Agreement dated as of October 25, 2019 by and between Blonder Tongue Laboratories, Inc. and MidCap Business Credit LLC.
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10.4
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Patent and Trademark Security Agreement dated as of October 25, 2019 by and between Blonder Tongue Laboratories, Inc., R. L. Drake Holdings, LLC and MidCap Business Credit LLC.
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10.5
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Continuing Guaranty dated as of October 25, 2019 of Blonder Tongue Far East, LLC and R. L. Drake Holdings, LLC, as Guarantors, in favor of MidCap Business Credit LLC.
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99.1
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Press Release Dated October 30, 2019.
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