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SINGING MACHINE CO INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Financial Statements and Exhibits

July 16, 2014

Item 1.01 Entry into a Material Definitive Agreement.

On July 14, 2014, the Company executed a three-year Credit Agreement ("Agreement") for a senior secured financing facility with PNC Bank ("PNC"). The asset-based facility provides the Company with up to $15,000,000 in senior secured financing during the Company's peak season and reduces to $7,500,000 from January 1 to July 31 each year. The Facility provides for borrowing against eligible accounts receivable and inventory, with sub limits on inventory up to $4,000,000 and for letters of credit up to $3,000,000.

Interest on the revolving credit facility is PNC Base Rate floating plus 2% or 1, 2 or 3 month fully absorbed PNC LIBOR rate plus 3.50% . The credit facility is secured with all assets of the Company as well as related-party debt subordination agreements totaling $2,500,000 from Starlight Marketing Development, Ltd. and a promissory note with Ram Light Management Ltd. in the amount of $1,100,000 which will accrue interest at a rate of 6% per annum.

Item 9.01 Financial Statements and Exhibits.

(a) Exhibits. Exhibit Number Description 99.1 (Filed herewith). Revolving Credit and Security Agreement 99.2 (Filed herewith). Promissory Note with Starlight Marketing 99.3 (Filed herewith). Subordination Agreement with Ram Light Management Ltd.

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Source: Edgar Glimpses

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