Form 8-K for LOCAL CORP
Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation
Item 1.01 Entry into a Material Definitive Agreement.
On January 30, 2013, Local Corporation (the "Registrant") and its wholly owned subsidiaries, Krillion, Inc. and Screamin Media Group, Inc. ("Subsidiaries") entered into that certain Fourth Amendment to Loan and Security Agreement (the "Amendment") with Square One Bank, which amends the Loan and Security Agreement by and between the Registrant, the Subsidiaries and Square One Bank dated August 3, 2011 (the "Agreement"). The Amendment modifies the definition of "Non-Formula Revolving Line" by increasing the amount from $3.0 million to $5.0 million for the period of January 30, 2013, to March 1, 2013, while removing for calendar quarters subsequent to the quarter ending March 31, 2013 the quarterly modification of the Non-Formula Revolving Line amount from $3.0 million to $5.0 million for a period of no more than thirty (30) days during each such quarterly period.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 Fourth Amendment to Loan and Security Agreement dated August 17,
2012, by and among the Registrant, Krillion, Inc., Screamin Media
Group, Inc. and Square 1 Bank.
Sentiment: Strong Buy
The following definition in Exhibit A to the Agreement is hereby amended and restated, as follows:
“Non-Formula Revolving Line” means a Credit Extension of up to $3,000,000, except that the term “Non-Formula Revolving Line” shall mean a Credit Extension of up to $5,000,000 beginning January 30, 2013 and continuing through March 1, 2013; provided however, that under no circumstances shall the aggregate amount of outstanding Advances exceed the Total Facility Cap, and availability of Non-Formula Advances under the Non-Formula Revolving Line shall be reduced accordingly; and provided further that the outstanding principal balance of Non-Formula Advances must equal Zero Dollars ($0.00) for at least thirty (30) consecutive days during each 364 day period beginning March 2, 2013.
Sentiment: Strong Buy
Excellent credit requires them to pay off their entire non-formula balance for at least 30 straight days every year? And only gives them a 30 day bump in their borrowing capacity?
Must lose something in the translation to english.
The only one you are trying to fool is yourself ... this all but confirms the financial distress the company is currently under.
Depending upon the particulars of the financing arrangement they must be working on, common shareholders are undoubtedly looking at dilution and a lower stock price.
Sentiment: Strong Sell