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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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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Item 2.02
Results of Operations and Financial Condition.
On September 25, 2017, Versar, Inc. (the “Company”)
held an investor conference call regarding its financial results
for fiscal 2017, as disclosed on the Form 10-K previously filed by
the Company on September 25, 2017. A transcript of the investor
call is attached as Exhibit 99.1.
Item
3.01
Notice
of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing
By
current report on Form 8-K filed on April 12, 2017,
Versar, Inc. (the “Company”) reported that it had
received a letter from NYSE American LLC, formerly NYSE MKT LLC
(the “Exchange”) stating that the Company was not in
compliance with Section 1003(a)(i) of the Exchange’s
Company Guide (the “Company Guide”) due to the
Company’s reported stockholders equity of $1,068,000 as of
July 1, 2016 and net losses in its fiscal years ended
July 1, 2014 and July 1, 2016. Following submission of a
plan of compliance to the Exchange, the Exchange initially provided
the Company with a plan period through August 15, 2017 to
regain compliance, which period was subsequently extended to
September 15, 2017.
On
September 25, 2017, the Exchange notified the Company that it
had suspended trading in the Company’s common stock prior to
the open of the market on September 25, 2017 and that it had
determined to commence proceedings to delist the Company’s
common stock from the Exchange pursuant to Section 1009 of the
Company Guide. Specifically, the notice stated that the Exchange
has determined that the Company is no longer suitable for listing
pursuant to Section 1009 of the Company Guide, since the Company
informed the Exchange that it could not demonstrate an ability to
return to compliance with Section 1003(a)(i) of the Company
Guide within 18 months of notice from the Exchange. This
determination resulted from the Company’s announcement that
it has entered into an Agreement and Plan of Merger with Kingswood
Genesis Fund I, LLC and KW Genesis Merger Sub, Inc., affiliates of
Kingswood Capital Management, LLC (collectively,
“Kingswood”). In its notice, the Exchange also informed
the Company that, under the Exchange delisting procedures, the
Company has the right to appeal the Exchange’s determination
by requesting an oral hearing or a hearing based on a written
submission before the Exchange’s Listing Qualifications
Panel.
On
September 26, 2017, the Company submitted a letter stating that it
will appeal the delisting determination and requested a hearing
before the Listing Qualifications Panel. Requesting a hearing will
stay the delisting determination until at least such time as the
panel renders its determination following the hearing. During the
period of the stay, the Company anticipates that its common stock
will continue to trade through the Exchange. There can be no
assurance that the Company will be successful in its appeal and
that the Company’s request for continued listing will be
granted. Receipt of the notice from the Exchange, and the delisting
or potential delisting of the Company’s securities by the
Exchange, will not affect the previously announced transaction with
Kingswood; however, no assurance can be given that the conditions
to the transaction will be either satisfied or waived.
Further,
the Company expects its common stock to trade on the OTC Bulletin
Board under the trading symbol “VSRI” starting
September 27, 2017.
Also on
September 27, 2017, the Company issued a press release stating
that it had received the letter from the Exchange and that the
Company will appeal the Exchange’s decision.
In
August 2017, Versar, Inc. (the “Company”), reported
certain events of default under the revolving credit facility in
the amount of $13 million and a term facility in the original
amount of $5 million (as amended to date, the “Loan
Agreement”) by and among the Company, certain of its
subsidiaries and Bank of America, N. A. (the “Lender”)
as lender and letter of credit issuer, resulting from a delay in
the Company complying with certain requirements to consummate a
transaction to replace or repay the facility and under a financial
covenant. On September 22, 2017, the Company and the Lender entered
into a Seventh Forbearance Agreement pursuant to which the Lender
agreed, among other things, to continue to forbear from exercising
any and all rights or remedies available to it under the Loan
Agreement and applicable law related to such events of default 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 (other than the defaults acknowledged therein); (c) the
transaction (as disclosed on the Form 8-K filed by Company on
September 25, 2017) between Kingswood Genesis Fund I LLC, KW
Genesis Merger Sub, Inc. and Company is terminated; or (d) November
17, 2017 (the “Forbearance Period” and each a
“Forbearance Termination Event”).
Under
the Seventh Forbearance Agreement, requests for extensions of
credit under the revolving credit facility will be funded, if at
all, in the absolute discretion of the Lender. The Company was also
required to pay an additional forbearance fee of $150,000, payable
upon the earlier of the occurrence of a Forbearance Termination
Event or November 17, 2017 (“Fee Due Date”). The
forbearance fee will be waived if Company repays in full all
outstanding obligations due under the Loan Agreement prior to the
Fee Due Date.
Item
9.01.
Financial Statements and Exhibits.
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(d)
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Exhibits
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99.1 – September 25, 2017 Investor Call
transcript.
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99.2 – Press Release dated September 27,
2017.
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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.
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Dated: September 27, 2017
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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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