Colt Defense LLC one of the oldest and most reputable firearm manufacturers in the United States, is feeling the sales pinch. The company warned that it could fail to make a $10.9 million payment to bondholders due on 17 Nov. If  the company skips the payment, it will enter a 30-day grace period. If payment is not made by 15 Dec, it will be in default and bondholders can demand immediate, full payment.

Colt’s NT 10-Q “Notification of inability to timely file Form 10-Q or 10-QSB” Acc-no: 0001104659-14-079873 (34 Act)

Colt Defense LLC (the “Company”) is unable to file the subject report in a timely manner because the Company is working through accounting considerations and liquidity concerns with respect to its financial operations.  As a result of several recent business trends negatively impacting the Company’s current and forecasted revenues and cash flows, the Company is evaluating its forecasted operating cash flows in consideration of recent delays in product shipments and availability of borrowings under the Company’s Credit Agreement.  As of this filing, the Company believes that it is probable that it will not be in compliance with its Term Loan covenants, as amended, as of December 31, 2014 as they currently exist absent an amendment, waiver or refinancing of the Term Loan Facility.  The Company is in current discussions with existing and potential financing sources to address the situation as discussed below in Part IV.

Colt Defense LLC attributes its current state of affairs to decreased government spending and significantly lower consumer demand.

Readers can read all recent Colt filings at: http://www.sec.gov/cgi-bin/browse-edgar?CIK=0001508677&action=getcompany