BURBANK, CA – Loop Media, Inc. (the "Company"), a Nevada corporation providing help supply services, is currently in a precarious financial situation due to a notice received from its senior lender. On Monday, the Company disclosed in a regulatory filing that it had been warned of an existing default under its revolving loan facility.
The issue arose after Loop Media, previously known as Interlink Plus, Inc., issued a Convertible Promissory Note on October 18, 2024, to the Joseph G. Bellino Trust, amounting to $2 million. On Sunday, October 29, 2024, the senior lender notified the Company of the default, which was triggered by the Company incurring debt that was not subordinated to the senior lender's debt. The required subordination agreement, satisfactory to the lender, had not been executed.
Loop Media had been negotiating with the senior lender to agree on the terms of the subordination agreement before receiving the notice. The Company is continuing efforts to resolve the situation. However, failure to reach an agreement may lead to the senior lender enforcing its rights as the senior secured lender. This could potentially trigger cross-defaults under other loan agreements, accelerating the Company's indebtedness.
The Company's shares, with the trading symbol LPTV, are not listed on any exchange. As the situation unfolds, Loop Media is working to address the default with its senior lender to prevent further financial repercussions.
In other recent news, Loop Media, Inc. has undergone significant executive changes, including the appointment of Ari Olgun as Interim CFO, following the departure of its previous CFO, Neil Watanabe, and three board members. The company also secured $700,000 through a future receipts sale to CFG Merchant Solutions and a $525,000 subordinated loan from Agile Capital Funding. Loop Media's shareholders approved an increase in authorized shares from 150,000,000 to 225,000,000, providing the company with greater flexibility for future corporate endeavors.
Despite a reported 26% drop in fiscal Q2 2024 revenue, totaling $4 million, and a decrease in gross profit margin to 10.4% from 29.4% in the previous year, the company extended its loan agreement with GemCap Solutions to July 29, 2025, and added its subsidiary, Retail Media TV, as a co-borrower. Loop Media's common stock was delisted from the NYSE American and began trading on the OTC Pink Market due to the low selling price.
As part of the recent developments, Loop Media announced plans to introduce several Free Ad-Supported Streaming TV (FAST) channels. The company has been granted until October 23, 2025, by the NYSE American LLC to meet the continued listing standards. These changes are part of recent developments that are shaping the strategic direction of Loop Media.
InvestingPro Insights
Loop Media's financial challenges, as highlighted in the article, are further underscored by recent data from InvestingPro. The company's market capitalization has dwindled to just $3.56 million, reflecting the severe impact of its financial troubles. InvestingPro Tips indicate that Loop Media is "quickly burning through cash" and "operates with a significant debt burden," which aligns with the default situation described in the article.
The company's financial metrics paint a grim picture. With a revenue of $24.21 million in the last twelve months as of Q3 2024, Loop Media has experienced a substantial revenue decline of 36.46% during this period. The operating income margin stands at a concerning -94.99%, suggesting significant operational inefficiencies.
InvestingPro Tips also reveal that the stock has "taken a big hit over the last week," with a 23.3% decline in the past week alone. This recent drop is part of a larger trend, as the stock has fallen by 89.52% over the past year.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for Loop Media, providing a deeper understanding of the company's financial health and market position.
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