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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
AUGUST 23, 1999
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DIGITAL RECORDERS, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 1-13408 56-1362926
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
4018 PATRIOT DRIVE, SUITE 100
DURHAM, NORTH CAROLINA 27709
(Address of principal executive offices)
(919) 361-2155
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On August 23, 1999, Digital Recorders, Inc. ("DRI") and related
subsidiaries signed a four (4) year Revolving and Term Lines of Credit Agreement
("Credit Agreement") with Fremont Financial Corporation, a subsidiary of Fremont
General Corporation (NYSE: FMT). The Credit Agreement provides up to $10 million
for borrowing by DRI to be used for acquisitions, working capital and general
corporate purposes. The amount available to borrow under the revolving portion
of the Credit Agreement is determined based on a formula of eligible trade
accounts receivable and inventory. The trade accounts receivable basis will be
eighty-five percent (85%) of eligible domestic U.S. trade accounts plus fifty
percent (50%) or $750,000 of eligible trade accounts of the German subsidiary.
The inventory basis will be a weighted average formula on the ratio of domestic
U.S. inventory to the total confirmed sales orders with advances of thirty-five
percent (35%) of primary components and eight percent (8%) of general inventory
with a combined phase in limit of $750,000. The term portion of the Credit
Agreement will be primarily used to fund the machinery and equipment and real
estate assets of acquisitions.
The Credit Agreement includes other customary covenants and conditions
relating to the conduct and operation of DRI's businesses. Specifically, DRI
will be subject to a 1:1 EBITDA to interest coverage ratio to be calculated on a
cumulative basis for the initial four (4) fiscal quarters after the signing date
and hereafter calculated for the four (4) fiscal quarters immediately preceding
the date of determination. In addition, the acquisition of any companies will
require approval from Fremont
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
10.29 Credit Agreement between Digital Recorders, Inc. and Fremont
Financial Corporation dated August 23, 1999
99.1 Press release dated August 31, 1999 announcing the signing of
the Credit Agreement.
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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.
DIGITAL RECORDERS, INC.
Date: September 3, 1999 By: /s/ Lawrence A. Taylor
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Lawrence A. Taylor
Vice President & Chief Financial Officer
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