Global Axcess Closes $5 Million Credit Line
The company said it will repay the loan over 42 months, beginning April 30, with 41 equal monthly principal payments plus accrued interest. The interest rate of the loan is fixed at an interest rate of 6.99%.
On March 23, Global Axcess said it had entered into a settlement agreement with Camofi Master LDC to resolve a lawsuit initially filed by Camofi in October of 2007. The company used the proceeds of the loan to pay $3.5 million to Camofi as payment in full under the settlement and to satisfy Global Axcess' outstanding principal balance of $1.5 million under a loan agreement with Wachovia Bank.
As a result of the closing of the loan and the payoffs of Camofi and Wachovia, the company plans to record a one-time non-cash expense of around $400,000 during the first quarter of 2009.
Around $250,000 of this non-cash charge is for the early extinguishment of the Camofi debt, which would have otherwise been expensed at around $39,000 per quarter through the maturity date of the note in October 2010, around $70,000 of the non-cash charge relates to the expense for the warrant repricing under the settlement agreement.
Around $80,000 of the non-cash charge relates to the expense acceleration of prepaid loan fees in connection with the notes from Camofi and Wachovia, which would have otherwise been expensed at around $13,000 per quarter through the maturity dates of the notes.
Global Axcess said that, while it expects to record the one-time non-cash expense in the first quarter of 2009, it also expects savings of around $230,000 for the remaining nine months of 2009.
The company said it still expects to report a profitable first quarter for 2009.
Company chairman Joe Loughry said, "Without question, the financing by SunTrust evidences the last of multiple significant legal overhangs on the company which have dramatically hindered its ability to explore growth financing via normal debt or equity markets over the last two and one-half years."
Jacksonville, Florida-based Global Axcess offers turnkey ATM management solutions through its Nationwide Money Services unit. They include cash, project and account management services. NMS currently owns, operates or manages over 4,200 ATMs in its national network in 44 states.
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