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TOROTEL INC FILES (8-K) Disclosing Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits

February 27, 2014

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement

On February 21, 2014, Torotel Products, Inc. ("Torotel Products"), a wholly-owned subsidiary of Torotel, Inc., entered into a new financing agreement (the "agreement") with Commerce Bank, N.A (the "Bank"). The agreement provides for a real estate term loan (the "Loan").

The Loan is in the principal amount of approximately $542,000. The Loan has a 59 month term with a 15 year amortization period with the balance payable at maturity. The associated annual interest rate is fixed at 4.05 percent. Monthly repayments of approximately $4,873 consisting of both interest and principal are required. The Loan is a refinancing of our previous real estate loan from the Bank with a payoff amount of approximately $540,000 and no cash proceeds were received. Prepayment of the Loan up to $100,000 per year is allowed without penalty so long as these funds are generated through internal cash flow and not borrowed from a separate financial institution. The Loan is cross collateralized and cross defaulted with all other facilities of Torotel Products and is secured by a first real estate mortgage on the property located at 620 North Lindenwood Drive in Olathe, Kansas.

Both Torotel, Inc. and Electronika, Inc. remain as additional guarantors pursuant to the 2010 guaranty and the loan is also made pursuant to the 2010 business loan agreement that was filed as Exhibit 10.11 to our quarterly report on Form 10-Q for the quarter ended October 31, 2010 filed on December 15, 2010.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

10.1 Promissory note for real estate term loan, executed February 21,2014

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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.

TOROTEL, INC. By: /s/ H. James SerroneH. James Serrone Vice President of Finance and Chief Financial Officer Date: February 27, 2014 3

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Source: Edgar Glimpses

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