Nortech Systems (NASDAQ: NSYS) signs $15M credit and term loan to 2029

Rhea-AI Filing Summary

Nortech Systems Incorporated entered into a new Credit and Security Agreement with Associated Bank that provides a revolving credit facility of up to $15,000,000 and a $2,200,000 term loan. This replaces the company’s prior facility that was due to mature in August 2026.

The new facility includes a $1,500,000 letter-of-credit sublimit, is secured by substantially all U.S. assets, and the revolver and term loan each mature in March 2029. Borrowings bear interest at a base rate or one- or three-month Term SOFR plus 2.00% for revolver borrowings and 2.25% for the term loan.

The agreement includes customary covenants limiting additional debt, liens, investments, asset sales, dividends, and certain transactions without lender consent. Nortech must maintain a Fixed Charge Coverage Ratio of 1.10 to 1.00 and comply with broad event-of-default provisions, including non-compliance, change of control, destruction of collateral, or a material adverse effect.

Insights

Credit & capital structure analyst

New $17.2M facility extends debt maturity to 2029 with covenants.

Nortech Systems has refinanced its existing bank facility with Associated Bank, securing a revolving line up to $15,000,000 plus a $2,200,000 term loan, both maturing in March 2029. This removes the prior August 2026 maturity overhang and provides committed liquidity tied to receivables, inventory, and fixed assets.

Pricing is floating, based on a defined base rate or one- or three-month Term SOFR plus 2.00% on revolver borrowings and 2.25% on the term loan, keeping interest costs sensitive to rate movements. The facility is secured by substantially all U.S. assets and includes a $1,500,000 letter-of-credit sublimit.

Covenants are typical for asset-based lending: limits on new debt, liens, investments, asset sales, and dividends, plus a required Fixed Charge Coverage Ratio of 1.10 to 1.00. Broad events of default, including change of control and material adverse effect, give the lender significant remedies if performance weakens, so ongoing covenant compliance remains important for maintaining access to this credit.

false 0000722313 0000722313 2026-03-20 2026-03-20 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

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): March 20, 2026

NORTECH SYSTEMS INCORPORATED

(Exact name of registrant as specified in charter)

Minnesota		0-13257		41-1681094
(State or other jurisdiction		(Commission		IRS Employer
of incorporation)		File Number)		Identification No.)

7550 Meridian Circle N. Ste 150, Maple Grove, MN 55369

(Address of principal executive offices)

(952) 345-2244

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed from 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 (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol(s)		Name of each exchange on which registered:
Common Stock, par value $.01 per share		NSYS		NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 1.01 Entry into a Material Definitive Agreement

On March 20, 2026, we entered into a new Credit and Security Agreement with Associated Bank, National Association, which provides for a revolving credit facility of up to $15,000,000, subject to a borrowing base based on eligible accounts receivable, inventory and fixed assets, and a $2,200,000 term loan (the “Associated Facility”). The new Associated Facility replaces our existing credit facility, which was scheduled to mature in August 2026. The Associated Facility includes a sublimit of $1,500,000 for letters of credit and is secured by substantially all of our assets in the United States of America, and the facility and term loan each mature in March 2029. Borrowings under the Associated Facility bear interest, at our option, at a defined base rate, or at one-month or three-month Term Secured Overnight Financing Rate, plus 2.00% in the case of revolving credit borrowings and plus 2.25% in the case of the term loan.

The Associated Facility contains customary affirmative and negative covenants that restrict or limit our ability to incur additional indebtedness, create liens, make investments, sell assets, pay dividends or engage in certain transactions without lender consent. This agreement also requires us to comply with financial covenants, including maintaining a Fixed Charge Coverage Ratio of 1.10 to 1.00, which measures the ratio of EBITDA, as defined to exclude certain other non-cash items, and less unfunded capital expenditures, to fixed charges such as interest as well as debt and capital lease principal payments. The Associated Facility contains a broad definition of events of default including non-compliance with the credit agreement, change of control of the company, destruction of collateral and if the company suffers a material adverse affect.

ITEM 9.01 Financial Statements and Exhibits.

Exhibits.

Exhibit No.		Description
10.1		Credit Agreement dated as of March 20, 2026, by and between Nortech Systems Incorporated and Associated Bank, National Association.
104		Cover Page Interactive Data File (embedded within the Inline XBRLdocument).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 23, 2026

Nortech Systems Incorporated

(Registrant)

/s/ Andrew D. C. LaFrence

Andrew D. C. LaFrence

Senior Vice President of Finance and

Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description
10.1		Credit Agreement dated as of March 20, 2026, by and between Nortech Systems Incorporated and Associated Bank, National Association.
104		Cover Page Interactive Data File (embedded within the Inline XBRLdocument).

FAQ

What new credit facility did Nortech Systems (NSYS) enter into?

Nortech Systems entered a new Credit and Security Agreement with Associated Bank, providing a revolving credit facility up to $15,000,000 and a $2,200,000 term loan. This agreement replaces the company’s prior facility and is secured by substantially all U.S. assets.

When does Nortech Systems’ new credit facility with Associated Bank mature?

Both the revolving credit facility and the $2,200,000 term loan mature in March 2029. This extends Nortech Systems’ debt maturity profile compared with its prior credit facility, which had been scheduled to mature in August 2026, providing a longer-term capital structure.

What are the interest rates on Nortech Systems’ new credit facility?

Borrowings under the facility accrue interest at a chosen base rate or one- or three-month Term SOFR plus 2.00% for revolving credit borrowings and plus 2.25% for the term loan. These floating rates directly tie the company’s borrowing costs to prevailing short-term interest benchmarks.

What financial covenants apply to Nortech Systems under the new facility?

The agreement requires Nortech Systems to maintain a Fixed Charge Coverage Ratio of 1.10 to 1.00. This ratio compares EBITDA, adjusted to exclude certain non‑cash items and reduced by unfunded capital expenditures, to fixed charges such as interest and scheduled debt and capital lease principal payments.

What collateral and restrictions are included in Nortech Systems’ new credit agreement?

The facility is secured by substantially all of Nortech Systems’ U.S. assets and includes a $1,500,000 letter-of-credit sublimit. It also imposes customary covenants limiting additional indebtedness, liens, investments, asset sales, dividend payments, and certain transactions without lender consent.

What events of default are defined in Nortech Systems’ new credit facility?

Events of default include non-compliance with the credit agreement, a change of control of the company, destruction of collateral, and situations where the company suffers a material adverse effect. These provisions give the lender broad rights if the company’s condition or compliance deteriorates.

Filing Exhibits & Attachments

4 documents

Agreements & Contracts

• EX-10.1 EX-10.1 801.2 KB

Other Documents

• EX-101 XBRL SCHEMA FILE 2.9 KB
• EX-101 XBRL LABEL FILE 33.4 KB
• EX-101 XBRL PRESENTATION FILE 21.8 KB