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 earliest event reported: July 10, 2000
TOP AIR MANUFACTURING, INC.
(Exact Name of Registrant as Specified in Its Charter)
Iowa
(State or Other Jurisdiction of Incorporation)
0-10571 42-1155462
(Commission File Number) (I.R.S. Employer Identification No.)
317 Savannah Park Road, Cedar Falls, Iowa 50613
(Address of Principal Executive Offices) (Zip Code)
(319) 268-0473
(Registrant's Telephone Number, Including Area Code)
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Item 5. Other Events.
As previously reported, the Company had been (and continues to be)
unable to meet certain financial covenants contained in the Credit and Security
Agreement between the Company and its bank lender providing for a $6 million
line of credit (the "Line of Credit Facility"). On May 25, 2000, the Company
entered into an agreement with its bank lender whereby the bank agreed to either
waive the covenants that are in default or to forebear from exercising their
right under the Line of Credit Facility and agreed to extend the maturity date
and the Line of Credit Facility to July 18, 2000. As of June 28, 2000, the
Company had borrowed all of the funds available to it under the borrowing base
formula contained in the Line of Credit Facility with its bank lender. In order
to meet its immediate working capital needs, on June 28, 2000 the Company and
its bank lender entered into an agreement (the "Special Advance Agreement") to
advance an additional $200,000 to the Company in excess of the borrowing base
formula contained in the Line of Credit Facility, which additional borrowings
became due and payable on July 10, 2000.
On July 10, 2000, the Company's bank lender was informed that the
Company would be unable to pay the $200,000 advance that had become due and
payable on July 10, 2000. On July 11, 2000, the Company received a notice of
default from its bank lender with respect to the Company's indebtedness under
the Special Advance Agreement and the Line of Credit Facility.
Although the Company continues to fund its operations through its Line
of Credit Facility, no assurance can be given that the Company's bank lender
will continue to provide working capital financing under the Line of Credit
Facility after its maturity on July 18, 2000. Moreover, because of the default
status of the Company's indebtedness under the Special Advance Agreement and the
Line of Credit Facility, the Company's bank lender could accelerate the
outstanding indebtedness under the Line of Credit Facility prior to its maturity
on July 18, 2000.
The Company continues its ongoing discussions with its bank lender in
an attempt to obtain short term accommodations from its bank lender with respect
to the current outstanding indebtedness so that the Company may continue to seek
alternative sources of debt and/or equity financing. As of the date of this
report, the Company has not received a commitment from any source to provide
such financing. The Company cannot give any assurance that it will be able to
obtain any accommodation from its bank lender with respect to its current Line
of Credit Facility or that the Company will be able to obtain more permanent
financing of its working capital requirements from its bank lender or any other
source. If the Company is unable to obtain such accommodation and financing, the
Company could not fund its ongoing operations without appropriate legal
protection.
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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 thereunto duly authorized.
Date: July 12, 2000
TOP AIR MANUFACTURING, INC.
By: /s/ Steven R. Lind
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Steven R. Lind
President and Chief Executive Officer
