Galaxy Gaming announced today that it has received a loan of $4 million from Zions Bancorporation, dba Nevada State Bank.
“Our igaming business remains robust, but the land-based casino industry in the second and third quarters of this year varied widely by geography,” stated Todd Cravens, Galaxy’s President and CEO. “New restrictions have just been announced in the UK, as well as other domestic markets. These Main Street funds increase our ability to ride out any short-term downturns that might result from regional efforts to fight the pandemic.”
The loan is funded by Nevada State Bank and the Main Street Priority Loan Program that was enacted as part of the CARES Act in March 2020.
While the Main Street loan is outstanding and for one year after it is repaid in full, the company may not: 1) repurchase stock, pay dividends or make other distributions; or 2) pay compensation to executive officers that exceed the total compensation they received in 2019.
In addition, a liquidity covenant requires Galaxy to maintain a minimum cash balance of $1.5 million through and including the quarter ending June 30, 2021, and $2.5 million thereafter.
“Pro forma for the Main Street loan, our cash at September 30, 2020, would have been approximately $6.6 million,” said Harry Hagerty, Galaxy’s CFO. “The Main Street loan has given us a flexible and relatively inexpensive source of funding with which to address the uncertainties ahead. And once again, we are incredibly appreciative of the hard work and support of our partners at Nevada State Bank.”
The Main Street loan is a senior secured obligation and ranks pari passu with the term and revolving loans that the company has borrowed under its credit agreement with Nevada State Bank, as amended.
