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): JULY 8, 2005
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EMRISE CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 1-10346 77-0226211
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
9485 HAVEN AVENUE, SUITE 100, RANCHO CUCAMONGA, CA 91730
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(Address of Principal Executive Officers) (Zip Code)
Registrant's telephone number, including area code: (909) 987-9220
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NOT APPLICABLE
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(Former name or former address, if changed since 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 14d-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))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The disclosure contained in Item 2.03 of this Form 8-K is incorporated
herein by reference.
ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
The disclosure contained in Item 2.03 of this Form 8-K is incorporated
herein by reference.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER
AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
On July 8, 2005, XCEL Power Systems, Ltd. ("XPS") and Pascall
Electronics Limited ("Pascall"), which are two of Emrise Corporation's United
Kingdom-based subsidiaries, obtained a credit facility with Lloyds TSB
Commercial Finance Limited ("Lloyds"). At the same time, the credit facility of
Venture Finance PLC was terminated, and all debt to Venture Finance PLC, which
totaled approximately $800,000, was paid off.
The Lloyds facility provides a revolving loan secured by receivables,
with a maximum availability of 2,100,000 British pounds sterling (approximately
U.S. $3,822,000 based on the exchange rate in effect on June 30, 2005). The
annual interest rate on the revolving loan is 1.5% above the Lloyds TSB rate.
The Lloyds TSB rate was 4.75% at July 8, 2005. This credit facility covers a
period of 24 months. The financial covenants include a 50% cap on combined
export gross sales of XPS and Pascall and debt turns of less than 65 days, and
the funding balance is capped at 125% of XPS and Pascall combined gross sales.
In addition to the revolving loan, Lloyds has also indicated it is
willing to provide an unsecured cashflow loan of $546,000 and a $273,000 term
loan that will be secured by equipment and amortized over 36 months. The
cashflow and term loan portions of the facility are being processed and are
expected to close in the near future.
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.
Dated: August 15, 2005
EMRISE CORPORATION
By: /s/ RANDOLPH D. FOOTE
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Randolph D. Foote, Chief Financial Officer
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