Koil Energy Solutions, Inc. 8-K

What Happened

• Koil Energy Solutions, Inc. and a subsidiary entered into a Loan and Security Agreement with nFusion Capital Finance, LLC dated May 19, 2026, providing a revolving credit facility with a maximum principal amount of $5.0 million. Availability is based on an advance rate of 85% of the Borrower’s eligible accounts (subject to customary reserves and conditions). The loans are secured by a first‑priority security interest in substantially all of the Borrower’s personal property assets (accounts, inventory, equipment, deposit accounts, general intangibles, etc.).

Key Details

• Facility size: up to $5.0 million; availability at 85% of eligible accounts (subject to reserves and conditions).
• Interest: prime rate (WSJ) + 4.75%, with a prime-rate floor of 6.75% (implying a minimum effective rate of 11.50%); interest calculated on a 360-day year; default interest applies per agreement.
• Term and termination: initial maturity 12 months from effective date, automatically renews for successive one-year terms unless terminated; lender may terminate on 90 days’ notice or immediately on an event of default.
• Fees and costs: origination/loan fee equal to 1.0% of the $5.0M maximum ($50,000), monthly collateral monitoring fee of 0.25% of the average gross balance of eligible accounts, plus lockbox/wire/ACH/UCC/tax monitoring fees; certain early termination scenarios carry a 2.0% fee of the maximum revolver ($100,000).

Why It Matters

• This facility gives Koil immediate access to up to $5.0M of working capital tied to its receivables, which can help fund operations or growth needs. However, the borrowing is secured by most of the company’s personal property and comes with covenants and monitoring fees that constrain flexibility.
• The stated interest structure includes a relatively high effective floor (minimum ~11.5%), plus ongoing monitoring fees and origination costs, which will increase the company’s borrowing costs and affect net proceeds and interest expense. Investors should note the collateral pledge and covenant package, as defaults or a lender termination could restrict the company’s liquidity and operations.