UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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 October 25, 2022, Nextridge Inc. (“Nextridge”) and ANS Advanced Network Services, LLC, (“ANS”), each an indirect wholly-owned subsidiary of Charge Enterprises, Inc. (sometimes referred to herein as “we,” “us,” “our” or similar terms), Charge Infrastructure Holdings, Inc. (“Charge Infrastructure”), the parent of Nextridge and our direct wholly-owned subsidiary, and us entered into a Loan Agreement (the “Loan Agreement”) with Pioneer Bank (“Pioneer”), pursuant to which Pioneer is making available, subject to the terms and conditions contained in the Loan Agreement, to provide to Nextridge and ANS a senior secured line of credit in an aggregate principal amount of $8,000,000 (the “Line of Credit”). The Line of Credit modifies and renews Nextridge’s and ANS’ existing $4,000,000 line of credit and provides additional liquidity of $4,000,000. The Line of Credit is annually renewable. Borrowings under the Line of Credit will bear interest at a floating rate equal to the prime rate as set forth in the Wall Street Journal with a floor of 5%. Advances under the Line of Credit to be limited to 70% and 50% of Nextridge’s and ANS’ eligible accounts receivable and work in progress, respectively. The outstanding balance on the Line of Credit is payable upon demand by Pioneer. In addition, the Loan Agreement provides for renewal of a $750,000 CapEx line of credit (the “CapEx Line”) by Pioneer for Nextridge and ANS, subject to the terms and conditions contained in the Loan Agreement.
All obligations under the Line of Credit and CapEx Line (the “Facility”) will be cross-collateralized and cross-defaulted, and will be secured by a senior lien on the assets of Nextridge and ANS. In addition, all obligations under the Facility will be guaranteed by us and by Charge Infrastructure.
As of October 25, 2022, Nextridge and ANS had a balance of $1,801,589 outstanding on this Line of Credit.
The description above is qualified in its entirety by the Loan Agreement, the Commercial Line of Credit Renewal Agreement and Note, the Security Agreement and the Unconditional Guaranty Agreement, which are included as Exhibits 10.1 through 10.4, inclusive, and are incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference in response to this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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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.
| CHARGE ENTERPRISES, INC. | ||
| By: | /s/ Leah Schweller | |
| Leah Schweller | |
| Chief Financial Officer | ||
| Dated: | October 27, 2022 | |
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