SOUTHAMPTON, PA — Environmental Tectonics Corporation (OTC Pink: ETCC) has finalized a $4 million sale and leaseback transaction involving demonstration equipment at its Southampton, Pennsylvania location. The deal, which closed on November 26, 2024, was completed with VFI Corporate Finance and includes provisions for the company to lease back the equipment for continued use.
Under the terms of the agreement, ETC will lease the assets for an initial term of 30 months. The lease offers several end-of-term options, including a one-year extension, returning the equipment to the lessor, or purchasing it at a pre-negotiated price. The annual net rent expense for the lease amounts to approximately $1.75 million, while the equipment previously carried an annual depreciation expense of roughly $780,000.
The proceeds from the sale will be directed toward boosting working capital to support ETC’s significant project backlog, which currently stands at approximately $100 million.
“This financing provides additional working capital over our line of credit with PNC to execute the higher level of orders in our backlog,” said Robert L. Laurent, Jr., ETC’s Chief Executive Officer and President.
The sale and leaseback arrangement is expected to strengthen the company’s ability to meet project commitments while maintaining operational momentum across its business units.
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