SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) January 22, 2002
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CPI AEROSTRUCTURES, INC.
(Exact Name of Registrant as Specified in Charter)
New York 1-11398 11-2520310
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
200A Executive Drive, Edgewood, New York 11717
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (631) 586-5200
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On January 22, 2002, CPI Aerostructures, Inc. ("CPI") announced that
its wholly owned subsidiary, Kolar, Inc. ("Kolar"), will close the Kolar
facility located in Ithaca, New York and begin the process to liquidate all of
its assets through an auction of the fixed assets of Kolar and the sale of the
real estate currently owned by Kolar. The proceeds of this liquidation will be
used to reduce Kolar's liabilities on certain bank debt in the amount of
approximately $6.3 million that is currently in default. The bank debt and
Kolar's obligations to its previous owner are secured by liens on the assets and
real estate to be sold and are guaranteed by CPI.
A Peaceful Possession Agreement has been entered into by Kolar and the
banks, which provides that Kolar will deliver all the fixed asset collateral to
the banks at Kolar's premises for the purpose of enabling the banks to dispose
of the collateral.
An auction sale agreement has also been entered into by Kolar, the
banks and Daley-Hodkin Corporation, auctioneer, which provides that an auction
sale of the machinery, equipment and vehicles of Kolar will be conducted no
later than March 21, 2002. The proceeds of the liquidation are not expected to
fully satisfy all of the obligations to the banks. There can be no assurance
that satisfactory payment terms will be made with the banks regarding the
balance of portions of the bank debt, the due date of which was recently
extended to June 30, 2002.
An amendment to the credit agreement relating to the bank debt as well
as supplement to such amendment has been entered into by CPI, Kolar and the
banks, which extended the due date of a certain portion of the loan to June 30,
2002. CPI will issue an aggregate of 70,000 shares of common stock to the banks
or its designees in consideration of the extension. CPI has agreed to afford
piggy-back registration rights to the holders of such shares of common stock.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits
10.39 Peaceful Possession Agreement, by and among Kolar, Inc.,
JPMorgan Chase Bank f/k/a the Chase Manhattan Bank and J.P.
Morgan Leasing, Inc., dated January 24, 2002 (without
schedule).
10.40 Auction Sale Agreement, among Daley-Hodkin Corporation, Kolar,
Inc., JPMorgan Chase and J.P. Morgan Leasing, Inc., dated
January 10, 2002.
10.41 Ninth Amendment to Credit Agreement dated as of December 31,
2001.
10.42 Supplement to Ninth Amendment to Credit Agreement dated
January 4, 2002.
99.1 Press Release regarding the liquidation of Kolar, Inc.'s
assets, dated January 22, 2002.
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SIGNATURE
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.
Dated: February 12, 2002 CPI AEROSTRUCTURES, INC.
By: /s/ Edward J. Fred
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Edward J. Fred
President and Chief
Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
10.39 Peaceful Possession Agreement, by and among Kolar, Inc., JPMorgan Chase
Bank f/k/a the Chase Manhattan Bank and J.P. Morgan Leasing, Inc.,
dated January 24, 2002 (without schedule).
10.40 Auction Sale Agreement, among Daley-Hodkin Corporation, Kolar, Inc.,
JPMorgan Chase and J.P. Morgan Leasing, Inc., dated January 10, 2002.
10.41 Ninth Amendment to Credit Agreement dated as of December 31, 2001.
10.42 Supplement to Ninth Amendment to Credit Agreement dated January 4,
2002.
99.1 Press Release regarding the liquidation of Kolar, Inc.'s assets, dated
January 22, 2002.