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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): September 23,
2016
VERSAR, INC.
(Exact name of Registrant as specified in its charter)
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Delaware
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1-9309
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54-0852979
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(State of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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6850 Versar Center Springfield, Virginia 22151
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(Address of principal executive offices)
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(Zip Code)
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(703) 750-3000
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(Registrant’s
telephone number, including area code)
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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:
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☐
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Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12(b) under the Exchange
Act (17 CFR 240.14a-12(b))
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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As
previously disclosed by Versar, Inc. (the “Company”) on
July 1, 2016, the Company, certain of its subsidiaries and Bank of
America. N.A. (the “Lender”) as the lender and letter
of credit issuer for a revolving credit facility in the amount of
$25 million and a term facility in the amount of $5 million (the
“Loan Agreement”) entered into a Third Forbearance
Agreement pursuant to which the Lender agreed, among others, to
forbear from exercising any and all rights or remedies available to
it under the Loan Agreement and applicable law related to certain
covenant defaults for a period ending on the earliest to occur of:
(a) a breach by the Company of any obligation or covenant under the
Forbearance Agreement, (b) any other default or event of default
under the Loan Agreement or (c) September 30, 2016 (the
“Forbearance Period”). The covenant defaults under the
Loan Agreement previously disclosed by the Company continued
through the Company’s fiscal year ended July 1, 2016 and the
quarter ending October 1, 2016.
On
September 29, 2016, the Company, certain of its subsidiaries and
the Lender entered into a Fourth Forbearance Agreement superseding
the Third Forbearance Agreement and extending the Forbearance
Period to October 31, 2016, in consideration of the ongoing efforts
of the Company to work to resolve such defaults or secure new
financing to refinance and replace the Loan Agreement.
Under
the Fourth Forbearance Agreement, the Company retains the ability
to borrow funds under the revolving credit facility subject to a
cap of $13.5 million, which is the same cap amount provided for in
the Third Forbearance Agreement, and provided that all of the terms
and conditions for borrowings are satisfied, other than the
existence of the acknowledged covenant defaults and the use of such
borrowings is consistent with the 13 Week Cash Flow Forecast
provided to the Lender pursuant to the Third Forbearance Agreement.
As a condition to, and as reflected in, the Fourth Forbearance
Agreement, the Company has appointed H. Haywood Miller III of the
Berkeley Research Group (“BRG”) as the Company’s
Chief Restructuring Officer. To that end, on September 23, 2016,
the Company entered into an engagement letter with BRG for the
retention of Mr. Miller’s services in that
capacity.
Under
the engagement letter, Mr. Miller and BRG will among other things
(i) assist the Company to develop and implement plans for long term
operations and financial restructuring of the Company, which may
include sales of assets, (ii) assess and make recommendations
regarding development and implementation of additional cost cutting
measures, and (iii) control the cash management functions of the
Company and manage all cash disbursements. The Company will pay Mr.
Miller and BRG certain hourly fees set forth in the engagement
letter, in addition to reimbursement for reasonable, out-of-pocket
expenses. The engagement letter may be terminated by either party
upon 30 days’ written notice.
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.
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Dated: September 29,
2016
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VERSAR, INC.
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By:
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/s/ JAMES D. VILLA
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James D. Villa
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Senior Vice President and General Counsel
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