Parks America, Inc. (OTCPink:PRKA), a miscellaneous amusement and recreation services provider with a market capitalization of $31.05 million, announced on Monday that it has received a partial reimbursement for legal expenses amounting to approximately $567,150.
The insurance proceeds were directed towards the legal counsel involved in stockholder activism matters. According to InvestingPro data, the company maintains impressive gross profit margins of 85.75%.
The company disclosed the receipt of directors and officers insurance proceeds related to expenses incurred from a contested proxy and associated activities. As of today, Parks America still has outstanding bills totaling around $365,000 connected to these issues. The company is in ongoing discussions with its insurance carrier concerning potential additional coverage for the remaining unpaid expenses.
InvestingPro analysis shows the company operates with a moderate debt-to-equity ratio of 0.25 and maintains a healthy current ratio of 1.63, indicating sufficient liquidity to meet short-term obligations. Unlock 7 more key insights and detailed financial metrics with an InvestingPro subscription.
These financial details were part of a broader disclosure in the company's recent 8-K filing with the Securities and Exchange Commission (SEC). The filing also referenced the company's Annual Report on Form 10-K for the fiscal year ending September 29, 2024, which contains further information on the contested proxy and related matters.
Parks America, previously known as Great American Family Parks Inc., is headquartered in Pine Mountain, Georgia, and operates within the amusement and recreation sector. The news comes as part of a regulatory requirement to keep shareholders and the public informed of significant corporate events.
The financial impact of the legal matters and the insurance proceeds is a point of interest for investors and stakeholders of Parks America. While the company's stock has shown resilience with a 17.14% year-to-date return, InvestingPro Fair Value analysis suggests the stock is currently trading above its intrinsic value.
The company's management has taken steps to address the financial implications of these events and is working to resolve the outstanding liabilities. Discover comprehensive valuation metrics and financial health indicators with an InvestingPro subscription.
In other recent news, Parks America, Inc. has finalized a new financing agreement, leading 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. to refinance existing debt. The loan has a 10-year term with a 15-year amortization schedule and an initial interest rate of 7.5%. To facilitate the loan, Parks America incurred approximately $56,500 in fees and expenses. A cash collateral reserve of $2.5 million has been established by Focus Compounding Fund, LP to secure the loan.
In other recent developments, the company has seen significant changes in its executive and board positions. The company's CFO, Todd R. White, announced his resignation effective at the end of the year. Additionally, board member Lisa Brady tendered her resignation, while seven new board members were elected during the company's annual meeting. Shareholders ratified GBQ LLC as the company's independent registered accountants, but the executive compensation proposal was not passed.
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