NORTECH SYSTEMS INC 8-K

What Happened

• Nortech Systems Inc. announced a Waiver and Amendment No. 4 to its Credit Agreement with Bank of America, N.A., dated February 27, 2026. The bank waived certain financial covenant defaults related to the Company’s Consolidated Leverage Ratio, Fixed Charge Coverage Ratio, and Consolidated EBITDA for the quarter ended December 31, 2025.
• The Waiver and Amendment also modifies multiple credit agreement provisions, including revised definitions, updated borrowing base mechanics, revised financial covenants with new EBITDA thresholds, adjustments to revolving commitment levels, an increase in the applicable borrowing rate, and updated limits on foreign subsidiary investments and transfers. The full waiver is filed as Exhibit 10.1 to the 8-K.

Key Details

• Date of amendment: February 27, 2026.
• Waived covenant defaults: Consolidated Leverage Ratio, Fixed Charge Coverage Ratio, and Consolidated EBITDA for the quarter ended December 31, 2025.
• Material changes: new EBITDA thresholds, adjusted revolving commitment levels, and an increase in the borrowing rate.
• Company outlook: reported continued positive operational benefits from restructuring in Q4 2024 and Q1 2025 and stated it is actively negotiating a new asset-backed lending facility expected to close in the near term.

Why It Matters

• The waiver avoids an active default on the company’s credit agreement, preventing potential lender remedies and giving Nortech time to implement its plan.
• Changes to covenants, borrowing base mechanics, and an increased borrowing rate can affect the company’s cost of capital and available liquidity going forward.
• Investors should watch for the company’s progress securing the new asset-backed facility and subsequent financial updates to assess liquidity and financing costs.