In a move to enhance its financial flexibility, Lendway, Inc. (NASDAQ:LDWY) has amended its existing credit agreement, according to a recent SEC filing. On Monday, the agricultural production company announced that it had increased its revolving facility capacity from $6 million to $8 million until March 31, 2025. This adjustment also includes a temporary expansion of the definition of eligible inventory to encompass inventory located in the Netherlands.
The agreement, struck with Associated Bank, N.A. as the agent for the lenders, also revises the senior cash flow leverage ratio covenant levels. Furthermore, Lendway has provided additional security in the form of a cash collateral interest to secure obligations under the Credit Agreement.
In other recent news, Lendway, Inc., an agriculture production company, has secured an additional $1 million in financing from Air T, Inc. This amendment to their financial agreement, as disclosed in an SEC filing, boosts Lendway's borrowing capacity to a total of $3.5 million. The agreement allows Lendway to draw funds until August 2026, with the note maturing in August 2029. Notably, Air T holds more than 10% of Lendway's common stock, and some of Lendway's executive leadership also holds positions at Air T.
In other recent developments, Lendway's Annual Meeting of Stockholders ended with the unanimous re-election of its board of directors and approval of executive compensation. The company also announced leadership changes, with Mark R. Jundt and Daniel C. Philp appointed as Co-Chief Executive Officers, and the appointment of Elizabeth "Biz" McShane as Chief Financial Officer. Furthermore, Boulay PLLP was ratified as the independent registered public accounting firm for the upcoming fiscal year.
InvestingPro Insights
Lendway's recent credit agreement amendment aligns with several key financial metrics and trends highlighted by InvestingPro. The company's market capitalization stands at a modest $6.05 million, reflecting its current position in the agricultural production sector.
InvestingPro data reveals that Lendway has experienced significant revenue growth, with a 363.91% increase in the last twelve months as of Q2 2024. This impressive growth may explain the company's need for increased financial flexibility through the expanded revolving facility.
However, the company faces challenges. An InvestingPro Tip notes that Lendway "suffers from weak gross profit margins," which is supported by the reported gross profit margin of 23.66% for the same period. This could be a factor in the company's decision to seek additional financial resources.
Another relevant InvestingPro Tip indicates that "liquid assets exceed short term obligations," suggesting that the increased credit facility may be aimed at maintaining this positive liquidity position while supporting growth initiatives.
For investors considering Lendway's potential, it's worth noting that the stock is currently trading at a low Price / Book multiple of 0.44, which could indicate undervaluation. However, the company's profitability remains a concern, as it was not profitable over the last twelve months.
InvestingPro offers 8 additional tips for Lendway, providing a more comprehensive analysis for those interested in delving deeper into the company's financial health and market position.
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