ENGlobal amends credit agreement with related-party lender; extends term loans to July 2025, adds $1M revolver

ENGLOBAL CORP

Modifies existing $1.2M term loans: maturity extended to July 2, 2025, interest rate reduced from 8.5% to 8.0%.
Adds a revolving credit line up to $1M (subject to borrowing base of 95% eligible receivables) at 12.0% interest.
Accrued unpaid interest (~$72K) and origination fees ($6K) added to term loan principal on closing.
Lender Alliance 2000, Ltd. is controlled by CEO William A. Coskey; transaction approved by Audit Committee and disinterested board members.
Mandatory prepayment of term loans if equity or debt capital raised exceeds $2M; revolving credit secured by receivables.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.95

ENGLOBAL CORP entered into Amended and Restated Credit Agreement with Alliance 2000, Ltd. valued at $1,200,000 term loans; $1,000,000 revolving credit facility (effective 2024-04-24).

Action: entry
Agreement: credit facility
Counterparty: Alliance 2000, Ltd.
Value: $1,200,000 term loans; $1,000,000 revolving credit facility
Effective: 2024-04-24

Exact text from the filing

On April 24, 2024 (the “ Closing Date ”), ENGlobal Corporation, a Nevada corporation (the “ Company ”), entered into an Amended and Restated Credit Agreement (the “ Credit Agreement ”) with Alliance 2000, Ltd., a Texas limited partnership (“ Lender ”), pursuant to which the parties amended and restated the Credit Agreement dated June 15, 2023 (the “ Original Credit Agreement ”), between the Company and the Lender to, among other things, (i) modify the existing term loans in the aggregate original principal amount of $1,200,000 (the “ Term Loans ”) to (a) extend the maturity date to July 2, 2025, and (b) reduce the applicable interest rate from 8.5% to 8.0% per annum, and (ii) provide a revolving credit facility (the “ Line of Credit ”) of up to the lesser of (a) the Borrowing Base (as defined below) and (b) $1,000,000.

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Source: SEC EDGAR

accession 0001654954-24-005027

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