Financing
The Company earlier this year signed a letter of intent with a broker/dealer pursuant to which the broker / dealer agreed to act as placement agent in connection with a $14,000,000 maximum, $10,000,000 minimum equity private placement. To date the status is known and no assurances that this will happen. Crossing Fingers.
However, NEOS has a revolving credit agreement with CFC. The maximum line of credit available under the CFC Credit Agreement was recently increased to $8,500,000 with a separate $1,500,000 line for equipment purchases. Advances under the CFC Credit Agreement are made on the basis of eligible accounts receivable and inventory as defined in the agreement.
CFC requires NEOS to maintain working capital of no less than $2,500,000 excluding its borrowings from CFC. In addition, NEOS must maintain an adjusted net worth of no less than $600,000. The adjustment to the net worth calculation allows NEOS to add the balance of any subordinated debt due to the former shareholder of NEOS to the net worth calculation to meet the required level.
NEOS pays interest to CFC at the rate of prime plus 1.0% on all outstanding amounts under the CFC Credit Agreement. All obligations of NEOS under the CFC Credit Agreement are guaranteed by the Company.
:-)
Gary |
