Atlas Engineered Products announced it has made a principal debt prepayment of $1.08 million on its Business Development Bank of Canada ("BDC") loans. The BDC loans were entered into February of 2019 to fund the South Central Building Systems ("South Central") acquisition in March of 2019. The first loan was secured by the land and building of South Central and was initially to be amortized over 256 months.

The second loan was secured by the equipment of South Central and was initially to be amortized over 100 months. These loans were recently generating interest at 7.8% and 9.3%, respectively. As a result of the debt prepayment, the Company has paid off its debt with BDC.

These loans would have had an interest expense of $86,000 for the fiscal year 2024 if they had not been paid off. Excess cash on hand was used to prepay the BDC loans. It was determined by the Company that this was the best use of cash at this time as these loans would have reset at higher rates than the initial 5-year fixed interest rate, and the Company will still have access to debt and further cash on hand for potential future organic and acquisitive growth.