On March 20, 2026, Nortech Systems Incorporated entered into a new Credit and Security Agreement with Associated Bank, National Association, establishing a revolving credit facility of up to $15 million. This facility is subject to a borrowing base determined by eligible accounts receivable, inventory, and fixed assets. Additionally, the agreement includes a $2.2 million term loan, collectively referred to as the 'Associated Facility'. This new facility replaces an existing credit line that was set to mature in August 2026. The Associated Facility features a sublimit of $1.5 million for letters of credit and is secured by substantially all of Nortech's assets in the United States. The maturity date for both the revolving credit and term loan is set for March 2029. Interest rates for borrowings under the facility will be based on a defined base rate or the Term Secured Overnight Financing Rate, with additional margins of 2.00% for revolving credit and 2.25% for the term loan. The agreement imposes customary affirmative and negative covenants, which restrict Nortech's ability to incur additional debt, create liens, or engage in certain transactions without lender consent. Furthermore, it mandates compliance with financial covenants, including maintaining a Fixed Charge Coverage Ratio of 1.10 to 1.00. The Associated Facility also outlines various events of default, including non-compliance with the credit agreement and changes in control of the company. This strategic move is expected to enhance Nortech's liquidity and operational flexibility, positioning the company for future growth opportunities.

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