Attached files
| file | filename |
|---|---|
| EX-10.58 - COMMERCIAL SECURITY AGREEMENT - AMERICAN CONSUMERS INC | form8kexh1058.htm |
| EX-10.59 - ASSIGNMENT OF DEPOSIT ACOUNT - AMERICAN CONSUMERS INC | form8kexh1059_052510.htm |
| EX-10.57 - PROMISSORY NOTE - AMERICAN CONSUMERS INC | form8kexh1057_052510.htm |
| EX-10.56 - BUSINESS LOAN AGREEMENT - AMERICAN CONSUMERS INC | form8kexh1056_052510.htm |
| EX-10.60 - LETTER AGREEMENT - AMERICAN CONSUMERS INC | forrm8kexh1060_052510.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 20, 2010
AMERICAN CONSUMERS, INC.
(Exact name of registrant as specified in its charter)
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Georgia
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0-5815
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58-1033765
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(State or other
jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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| 55 Hannah Way, Rossville, Georgia | 30741 | |
| (Address of principal executive offices) | (zip code) |
Registrant’s telephone number, including area code: (706) 861-3347
| N/A | ||||
| (Former name or former address, if changed since last report.) | ||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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On May 21, 2010, American Consumers, Inc. (the “Company”) and Gateway Bank and Trust Company (the “Lender”) executed documents, dated as of May 20, 2010, to effect a one year renewal of the Company’s $800,000 revolving line of credit, pursuant to which the Company is required to make monthly interest only payments on the outstanding balance, and to repay outstanding principal and accrued interest by May 20, 2011, provided that the Company remains in compliance with the terms of the loan. Borrowings under the revolving line of credit bear interest at an annual rate equal to the Wall Street Journal prime rate, subject to a minimum annual interest rate of 6.0%. In conjunction with this annual renewal, the Company and the Lender also executed a new Business Loan Agreement dated as of May 20, 2010, with terms substantially identical to those of the prior Business Loan Agreement, dated April 25, 2008, between the Company and the Lender.
The line of credit contains a borrowing base provision which limits the maximum outstanding indebtedness to forty percent (40%) of the value of the Company’s inventory, as measured on a quarterly basis. As of May 20, 2010, the Company had an outstanding balance of $800,000 for borrowings under the revolving line of credit, leaving $0 available to be borrowed as of such date. As it has done in the past, the Company generally will utilize the proceeds from borrowings under the revolving line of credit to fund working capital requirements, including inventory purchases.
The Company paid closing costs in the amount of $750 to the Lender in conjunction with this annual renewal of the revolving line of credit. Borrowings under the revolving line of credit are collateralized by a security interest in the Company’s $300,000 certificate of deposit with the Lender and by a security interest in substantially all of the Company’s accounts receivable, inventory, machines and equipment, furniture and fixtures, and proceeds of the foregoing, as well as by the personal guaranty of the Company’s President and Chief Executive Officer. The revolving line of credit includes affirmative and negative covenants and Events of Default which are customary for this type of indebtedness. Included within the foregoing are provisions which generally prohibit the payment of any dividends on the Company’s stock and limit the Company’s ability to make new capital expenditures without the consent of the Lender (subject to an exception for the incurrence of any new indebtedness in an amount less than $50,000).
As of May 20, 2010, the Company was also indebted to the Lender in the aggregate principal amount of (A) $73,882 pursuant to a 60-month term loan in the original amount of $180,000 initially entered into when the Company moved its primary banking relationship and lending arrangements to the current Lender in May 2007 and (B) $256,122 pursuant to a total of six five-year term notes incurred in connection with the facility provided by the Lender to fund the recently completed upgrades of cash register and scanning systems in all of the Company’s grocery stores. All of such indebtedness includes terms as to covenants, interest rate and security provisions which parallel those of the revolving line of credit.
The foregoing description of the annual renewal of the revolving line of credit and the related security documents is qualified by reference to the full text of the documents, which are filed as exhibits to this report.
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Item 9.01
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Financial Statements and Exhibits
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The following Exhibits are filed pursuant to Item 9 of this Report:
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Exhibit No.
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Description
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10.56
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Business Loan Agreement between the Company and Gateway Bank and Trust Company, dated as of May 20, 2010, for $800,000 Revolving Line of Credit. Filed herewith.
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10.57
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Promissory Note between the Company and Gateway Bank and Trust Company, dated as of May 20, 2010, for renewal of $800,000 Revolving Line of Credit. Filed herewith.
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10.58
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Commercial Security Agreement between the Company and Gateway Bank and Trust Company for renewal of $800,000 Revolving Line of Credit, dated as of May 20, 2010. Filed herewith.
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10.59
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Assignment of Deposit Account between the Company and Gateway Bank and Trust Company for renewal of $800,000 Revolving Line of Credit, dated as of May 20, 2010. Filed herewith.
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10.60
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Letter Agreement, dated as of May 20, 2010, between the Company and Gateway Bank and Trust Company, related to Business Loan Agreement and Promissory Note, each dated as of May 20, 2010. Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: May 26, 2010 | AMERICAN CONSUMERS, INC. | ||
| By: | /s/ Paul R. Cook | ||
| Paul R. Cook | |||
| President and Chief Executive Officer | |||