FREQUENCY ELECTRONICS INC 8-K

What Happened

• On June 12, 2026, Frequency Electronics, Inc. announced it entered into a senior, secured revolving credit agreement with JPMorgan Chase Bank, N.A. for a three-year facility with a $10,000,000 capacity (maturing June 12, 2029). Up to $5,000,000 of the facility may be used for letters of credit, and the Company may optionally increase the facility by up to an additional $10,000,000 subject to lender conditions.
• The facility is guaranteed by the Company’s wholly owned subsidiary, FEI‑Zyfer, Inc., and secured by a pledge of substantially all assets of the Company and the subsidiary under a separate pledge and security agreement. The Company expects to use proceeds for general corporate purposes and working capital.

Key Details

• Facility size: $10,000,000 revolver; up to $5,000,000 available for letters of credit; optional increase up to $10,000,000 (not guaranteed).
• Fees and interest: commitment fee of 0.35% per year on the undrawn portion; borrowing rates are either CBFR-based (greater of Prime or 2.50% plus 2.50%) or Adjusted Term SOFR plus 2.50%.
• Collateral & guarantee: secured by substantially all assets and equity in domestic subsidiaries; guaranteed by FEI‑Zyfer, Inc.
• Financial covenants (quarterly, starting July 31, 2026): total leverage ratio ≤ 2.25:1.00; fixed charge coverage ratio ≥ 1.25:1.00. Standard events of default apply.

Why It Matters

• This credit facility provides Frequency Electronics with committed liquidity and short-term financing flexibility for working capital and operations, which can support business continuity and potential near-term needs.
• The security interest and subsidiary guarantee mean the lender has strong protections; at the same time, the financial covenants could limit the Company’s flexibility on dividends, additional borrowing, or certain transactions if covenant targets are not met.
• Investors should note interest and fee costs, the covenant thresholds, and that the optional increase in the facility is subject to lender approval and not assured.