Apparel company Perfect Moment Ltd. has entered into loan agreements totaling $1.575 million with Agile Lending, LLC and Agile Capital Funding, LLC, as disclosed in a recent SEC filing. The loans, issued as subordinated secured promissory notes, are set to bolster the company's financial position.
On August 23, 2024, Perfect Moment Ltd. and its subsidiaries, Perfect Moment USA Inc. and Perfect Moment Asia Limited, collectively referred to as the Borrower, agreed to two separate loan arrangements. The first loan, issued on July 25, 2024, is for $525,000 (the "July Note"), while the second, dated August 23, 2024, is for $1,050,000 (the "August Note"). The combined principal of these loans, referred to as the "Notes," amounts to $1.575 million.
The July Note requires weekly repayments of $26,625 starting on August 2, 2024, with full repayment due by February 7, 2025. Similarly, the August Note stipulates weekly payments of $53,250 beginning on September 3, 2024, with the full amount due by September 16, 2025. Both notes may be settled early but would incur a prepayment fee.
These financial obligations are subordinated to the company's senior indebtedness, meaning that repayment of these loans will occur after fulfilling any senior debt obligations. The collateral agent, acting for the lender's benefit, has been granted a security interest in certain properties, rights, and assets of the Borrower as specified in the loan agreements.
The Borrower has committed to a series of covenants, including the delivery of financial statements and prompt notification of certain events. Negative covenants are also in place, preventing specific actions without the lender's written consent.
Standard events of default are outlined in the agreements, such as failure to make payments, insolvency of the company or its subsidiaries, and the filing of liens or levies against the Borrower. Should an event of default occur, a default interest rate of 5% would be applied.
InvestingPro Insights
As Perfect Moment Ltd. navigates its financial journey, recent data from InvestingPro shows a mixed picture of the company's fiscal health. With a market capitalization of $15.56 million, Perfect Moment Ltd. holds a significant amount of cash compared to its debt, suggesting a degree of financial stability. This is further supported by the fact that the company's liquid assets exceed its short-term obligations, providing some cushion against immediate financial pressures.
However, the company's stock performance indicates challenges ahead. The price has experienced a steep decline over the past year, with a one-year total return of -80.96%. This is echoed by the stock's high volatility and the fact that analysts predict the company will not be profitable this year. These InvestingPro Tips highlight the need for investors to consider both the potential risks and the company's current financial leeway when evaluating Perfect Moment Ltd.'s prospects.
For those interested in a deeper dive into Perfect Moment Ltd.'s financial metrics and additional investment tips, InvestingPro offers a comprehensive suite of tools and insights, including 14 additional InvestingPro Tips for the company, which can be found at https://www.investing.com/pro/PMNT.
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