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) December 13, 2010

 

New Frontier Media, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Colorado

 

000-23697

 

84-1084061

(State or Other Jurisdiction
 of Incorporation)

 

(Commission File No.)

 

(IRS Employer
 Identification No.)

 

7007 Winchester Circle, Suite 200, Boulder, Colorado 80301

(Address of principal executive offices)

 

(303) 444-0900

(Registrant’s telephone number, including area code)

 

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:

 

o            Written communication 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))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.03 Creation of a Direct Financial Obligation.

 

On December 13, 2010, New Frontier Media, Inc. (the “Company”) extended its $5 million line of credit from Great Western Bank by entering into a new Business Loan Agreement effective December 15, 2010 and amending the related Promissory Note and Commercial Security Agreement that were previously filed as Exhibits 10.1 and 10.3, respectively, with the Company’s Form 10-Q for the quarter ended December 31, 2009.  The line of credit is secured by certain of the Company’s trade accounts and accounts receivable and is scheduled to mature on December 15, 2011.  The line of credit bears interest at the greater of (a) the current prime rate less 0.125 percentage points per annum or (b) 5.75% per annum.  The current rate is 5.75% per annum.  The Company currently has approximately $1 million outstanding under the line of credit.  The remainder of the line of credit may be drawn from time to time to support the Company’s operations and short-term working capital needs, if any.  A loan origination fee of 0.5% of the available line was paid by the Company.

 

The line of credit contains both conditions precedent that must be satisfied prior to any borrowing and affirmative and negative covenants customary for facilities of this type, including, without limitation, (a) a requirement to maintain a current asset to current liability ratio of at least 1.50 to 1.00, (b) a requirement to maintain a total liability to tangible net worth ratio not to exceed 1.0 to 1.0, (c) prohibitions on additional borrowing, lending, investing or fundamental corporate changes without prior consent, (d) a prohibition on declaring without consent any dividends, other than dividends payable in the Company’s stock, and (e) a requirement that there be no material adverse change in the Company’s current client base as it relates to its largest clients.

 

The line of credit provides that an event of default will exist in certain circumstances, including without limitation, the Company’s failure to make payment of principal or interest on borrowed amounts when required, failure to perform certain obligations under the line of credit and related documents, defaults in certain other indebtedness of the Company, the Company’s insolvency, a change in control of the Company, any material adverse change in the Company’s financial condition and certain other events customary for facilities of this type.

 

Additional information regarding the terms of the line of credit, including the definitive agreement containing the final terms, will be contained in the Company’s future reports filed with the Securities and Exchange Commission. Investors are encouraged to read such terms and the definitive agreement when it becomes available.

 

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: December 15, 2010

NEW FRONTIER MEDIA, INC.

 

 

 

 

 

 

By:

/s/ Michael Weiner

 

Name: Michael Weiner

 

Title: Chief Executive Officer

 

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