The US Bankruptcy Court gave an order to Chicken Soup for the Soul Entertainment, Inc. to obtain DIP financing on an interim basis on July 4, 2024. As per the order, the debtor has been authorized to obtain a revolving credit loan facility in the amount of $8 million, out of the total financing of $20 million, from Owlpoint IP Opportunities JVF I LP. The DIP loan would carry an interest rate of SOFR plus 11% p.a., with a SOFR floor of 4% p.a., along with an additional 4% p.a. interest in the event of default.

As per the terms of the DIP agreement, the loan carries a closing fee of 3% of the commitment amount. The DIP facility would mature either on January 1, 2026, or on the effective date of the plan or on the date of consummation of the sale of substantially all assets or the date that is 30 days after the interim order entry date if the final order entry date shall not have occurred by such date or the acceleration of the dip loans or termination of the commitments under the dip facility, including, without limitation, as a result of the occurrence of an event of default, whichever is earlier. Adequate protection would be provided to the DIP lenders in the form of super-priority administrative expense claims which is subject to a carve-out of $0.05 million towards unpaid trustee fees and $0.20 million towards unpaid professional fees / administrative expenses and first priority lien upon and security interest in the debtor?s collateral.