Parks America, Inc. (OTCPink:PRKA) has recently announced a new financing agreement that has led to the termination of a previous loan arrangement. The company's subsidiary, Aggieland-Parks, Inc., secured a $2.5 million term loan with Cendera Bank, N.A. on September 30, 2024, aiming to refinance existing debt.
The new loan has a 10-year term with a 15-year amortization schedule and carries an initial interest rate of 7.5%. Monthly payments are estimated at $23,200, with a balloon payment of the remaining principal due in 2034. To facilitate the loan, Parks America incurred approximately $56,500 in fees and expenses, with a $2.5 million cash collateral reserve established by Focus Compounding Fund, LP.
The proceeds from the new term loan were used to pay off the previous loan with First Financial Bank, N.A., which was part of the financing for the acquisition of Aggieland Wild Animal Safari by Parks America. In addition to the financing news, significant changes in executive and board positions have also occurred within the company.
Analysis and Insights
InvestingPro data shows that Parks America operates with a moderate level of debt and maintains a balanced financial position. The company's revenue growth over the last twelve months and impressive gross profit margin indicate a solid financial performance.
The recent refinancing move aligns with Parks America's growth trajectory, as the company continues to expand its revenue and profitability. With a market cap of $33.32 million, Parks America remains a small-cap company with potential for further growth.
Overall, the refinancing agreement and changes in executive leadership suggest a strategic shift within Parks America, positioning the company for future success and growth in the market.