Loop Media, Inc. (NYSE American: LPTV), a Burbank, California-based company specializing in help supply services, has amended its loan agreement with GemCap Solutions, LLC, extending the maturity date by one year to July 29, 2025, and adding its wholly-owned subsidiary, Retail Media TV, Inc., as a co-borrower. This amendment, effective as of Monday, was disclosed in a recent 8-K filing with the Securities and Exchange Commission.
Originally entered into on July 29, 2022, the Loan and Security Agreement provided Loop Media with a revolving credit facility with an initial limit of $4 million, which was later increased to $6 million on October 27, 2022. The latest amendment, known as Loan Agreement Amendment No. 2, not only extends the maturity date but also adjusts other material terms of the agreement.
The adjustment to the loan terms comes at a time when the company is looking to solidify its financial footing and continue its operations effectively. By extending the loan's maturity date and involving its subsidiary as a co-borrower, Loop Media appears to be taking strategic steps to manage its financial obligations more efficiently.
Investors and stakeholders can refer to the full text of the Loan Agreement Amendment No. 2, which is included as Exhibit 10.1 in the 8-K filing, for a detailed understanding of the changes made to the loan agreement. The information provided in this article is based on the statements from the press release.
In other recent news, Loop Media, Inc. has been active with several developments. The company has amended its loan agreement with GemCap Solutions, extending the maturity date to 2025 and adding its subsidiary, Retail Media TV, as a co-borrower. Loop Media has also received approval from the NYSE American LLC to proceed with its compliance plan, granting the company until 2025 to meet the continued listing standards.
The company reported a decrease in revenue for fiscal Q2 2024, with figures standing at $4 million, a 26% drop from the previous year. The gross profit margin also fell to 10.4% from 29.4%. Amid these financial results, Loop Media initiated a direct offering of approximately 9.65 million shares at $0.15 each, anticipating gross proceeds of around $2.45 million for operational funding.
Despite these financial challenges, analysts maintained a Buy rating for the company's stock, although the stock price target was reduced from $2.00 to $0.50. Furthermore, Loop Media announced plans to launch several Free Ad-Supported Streaming TV (FAST) channels, extending its reach into consumer homes.
The company also formed a strategic partnership with Outpatient Imaging Affiliates (OIA) to enhance patient experiences in outpatient imaging centers across the United States. These are among the recent developments that continue to shape Loop Media's strategic direction.
InvestingPro Insights
Loop Media, Inc.'s recent strategic financial maneuvers are reflected in real-time data and insights from InvestingPro. With a market capitalization of just $10.28 million, the company is trading at a low revenue valuation multiple, which could be an indicator of an undervalued stock. Analysts have noted a significant sales decline in the past year, with revenue dropping by 40.71% as of the last twelve months leading up to Q2 2024. This contraction in revenue growth is further highlighted by a quarterly decrease of 25.79% in Q2 2024.
The company's financial health shows signs of strain, as evidenced by a gross profit margin of 41.5%, yet an operating income margin at a deeply negative -100.75%. This suggests that while the company can generate a gross profit, its operating expenses far exceed its gross income.
Moreover, the company's price has experienced a sharp decline over various periods, with a staggering 94.17% drop year-over-year. According to InvestingPro Tips, Loop Media is quickly burning through cash and analysts do not anticipate profitability this year, which may explain the company's efforts to renegotiate its debt structure.
For those interested in deeper analysis, InvestingPro offers additional tips (totaling 13) that provide further insights into Loop Media's financial health and market performance. The platform's comprehensive data and expert analysis can be a valuable resource for investors looking to make informed decisions regarding Loop Media's stock.
Investors considering Loop Media as a potential addition to their portfolios should take note of these metrics and tips, and may find the full suite of InvestingPro Tips at https://www.investing.com/pro/LPTV to be a valuable tool for their research.
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