UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) March 6, 2008
Precision Aerospace Components, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware |
| 000-30185 |
| 20-4763096 |
| (State or Other Jurisdiction of Incorporation) |
| (Commission File Number) |
| (IRS Employer Identification No.) |
| 2200 Arthur Kill Road Staten Island, NY |
| 10309-1202 |
| (Address of Principal Executive Offices) |
| (Zip Code) |
Registrant’s telephone number, including area code (718) 356-1500
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (seeGeneral Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 – Financial Information
Item 2.03
Creation of a Direct Financial Obligation.
On March 6, 2008, Precision Aerospace Components, Inc. (the “Company”), guaranteed the performance of Freundlich Supply Company, Inc. (“Freundlich”), our wholly owned subsidiary in connection with the agreement, entered into on the same date, between Freundlich and Israel Discount Bank of New York (the “Agreement”). The Agreement, which has a maturity date of January 31, 2009, establishes a revolving funding facility which will allow Freundlich to receive up to three (3) million dollars. The funds will be made available to Freundlich in accordance with an advance formula which allows for the payment of up to Seventy-five (75) per-cent of eligible accounts and fifty (50) per-cent of eligible inventory, up to a maximum inventory advance amount of two million five hundred thousand dollars ($2,500,000). Eligible accounts are those domestic accounts not outstanding for more than one hundred twenty (120) days and eligible inventory is inventory as determined by the bank, presently that which has had sales within the preceding sixty (60) months. The daily rate on the outstanding balance will be, at the Company’s option, the prime rate plus one (1) per cent or LIBOR plus three and three quarters (3.75) per cent. The balance is secured by a first lien position on all of Freundlich’s assets. The Agreement replaces the Company’s existing facility with Greater Bay Business Funding. The Agreement will be filed with the Company’s 10K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Precision Aerospace Components, Inc.
Date: March 11, 2007
By:/s/ Andrew Prince
Andrew Prince
Chief Executive Officer