Vicon Industries entered into a new agreement with NIL Funding to replace the $5.8 million outstanding balance on its existing revolving line of credit with a $5.6 million term loan.
According to the related 8-K filing, at closing, $5.6 million of outstanding borrowings under its revolver were converted to a term loan while the remaining $200,000 of outstanding borrowings were repaid to NIL.
The new agreement requires monthly payments of accrued interest beginning on October 1, 2018, along with equal monthly principal payments of $25,000, plus accrued interest, beginning on April 1, 2019 until the loan maturity date of March 30, 2020, at which point the full outstanding balance of the loan and accrued interest are due.
The agreement provides for a formula that limits outstanding indebtedness based upon eligible accounts receivable and is secured by a first priority security interest in substantially all of the company’s assets.
Borrowings under the term loan bear interest at a rate of 8.85% per annum, with an initial commitment fee of $56,000, which was paid at closing.
The agreement also included provisions that are customarily found in similar financing agreements, including a financial covenant which requires Vicon to maintain a minimum level of inventory and liquid assets.
Since 1967, Vicon has manufactured mission-critical security surveillance systems. It focuses on providing solutions engineered for performance, features, simplicity in deployment, operation and maintenance.
