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

On March 18, 2022, certain wholly owned subsidiaries of Sharps Compliance Corp. (the "Company") amended and restated its existing Credit and Loan Agreements with its existing commercial bank (the "Credit Agreement"). The Credit Agreement expands the facility available to the Company, extends the maturity date of the Credit Agreement from December 28, 2023 to March 18, 2027 and increases the maximum Cash Flow Leverage Ratio from 3.00 to 3.50. The Credit Agreement provides for a $36 million committed credit facility. The proceeds of the credit facility may be utilized as follows: (i) $6 million for working capital that can be increased to $10 million upon the Company's request, letters of credit (up to $2 million) and general corporate purposes and (ii) $30 million for acquisitions. Advances under the acquisition line convert to a five-year term note at the end of a three-year advancing period. Borrowings bear interest at the greater of (a) zero percent or (b) the SOFR AVG 30 Day in Advance ("SOFR30A") plus a margin of 2.5%. The margin no longer fluctuates with the Company's cash flow leverage ratio. The interest rate as of March 18, 2022 was approximately 2.725%. The Company paid a facility fee of $0.1 million upon execution of the Credit Agreement.



As of March 18, 2022, the Company has the following bank debt outstanding (in
millions):

Credit Agreement:
Working Capital      $   -
Acquisition Line         -
Real Estate              2.7
Equipment                0.7
Total Bank Debt      $ 3.4

The Credit Agreement contains affirmative and negative covenants that, among other things, require the Company to maintain a maximum cash flow leverage ratio and a minimum debt service coverage ratio as described therein. The Credit Agreement also contains customary events of the Company's default which, if incurred, may terminate the Credit Agreement and require, among other things, immediate repayment of all indebtedness to the lenders.

The description of the Credit Agreement contained herein is qualified in its entirely by reference to the Credit Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

A copy of the press release issued by the Company is attached hereto as Exhibit 99.1.




Item 9.01. Financial Statements and Exhibits.
(a) Financial Information
Not applicable
(b) Pro Forma Financial Information
Not applicable
(c) Exhibits
Exhibit Description
10.1 Amended and Restated Loan Agreement, dated March 18, 2022
99.1 Press Release, dated March 22, 2022

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