Item 1.01Entry into a Material Definitive Agreement.
As previously disclosed, on
Senior "Debtor-in-Possession" Financing
As previously disclosed, in connection with the Chapter 11 Cases, on the
Petition Date, the Company filed a motion (the "DIP Motion") seeking, among
other things, interim and final approval of postpetition, debtor-in-possession
financing (the "DIP Financing") on the terms and conditions set forth in the
proposed Superpriority Secured Debtor-in-Possession Credit Agreement (the "DIP
Credit Agreement"), by and among the Company, the other Debtors party thereto as
guarantors (the "Guarantors," and together with the Company, the "Loan
Parties"), the lenders party thereto (the "DIP Lenders") and
On
The proceeds from the DIP Financing will be used, subject to the Interim DIP
Order and the Final DIP Order, (a) for working capital and other general
purposes of the Debtors, including the payment of professional fees and
expenses; (b) as provided in the Interim DIP Order and the Final DIP Order to
pay the reasonable fees and expenses of the Administrative Agent and the DIP
Lenders (including the reasonable fees and expenses of counsel and financial
advisors); (c) to pay claims in respect of certain prepetition creditors, which
may include, without limitation, employees, taxing authorities and trade vendors
in the ordinary course, in each case to the extent authorized by orders of the
The maturity date of the DIP Financing will be the earliest to occur of (a)
Interest on the outstanding principal amount of the revolving loans under the DIP Credit Agreement will be payable monthly in arrears and on the maturity date at a per annum rate equal to the then applicable Eurocurrency Rate plus: (a) with respect to Eurocurrency Rate Loans, 10.00% and (b) with respect to Base Rate Loans, 9.00%. Upon the occurrence and during the
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continuance of an event of default, at the election of the agent with the written consent of the required lenders or at the written instruction of the required lenders, all obligations under the DIP Credit Agreement will bear interest at a rate equal to the then current rate plus an additional 2.0% per annum.
The DIP Financing will be subject to certain covenants, including, without limitation, related to the incurrence of additional debt, liens, the making of investments, the making of restricted payments, limits as set forth in the DIP Budget, and certain bankruptcy-related covenants, in each case as set forth in the DIP Credit Agreement, the Interim DIP Order and the Final DIP Order.
The DIP Credit Agreement requires delivery of, among other things, (a) a weekly financial statement including the balance of cash and cash equivalents of the Loan Parties, (b) a weekly "Budget Reconciliation Report," and (c) an updated budget of projected receipts and expenditures of the Loan Parties for the thirteen-week period following such delivery.
The DIP Credit Agreement provides for customary events of default, including defaults resulting from non-payment of principal, interest or other amounts when due, failure to perform or observe covenants, and the occurrence of certain matters related to the Chapter 11 Cases. Pursuant to the DIP Credit Agreement, the Loan Parties will act in good faith and use commercially reasonable efforts to comply with the sale milestones as described below.
In addition, pursuant to the Interim DIP Order, the Company is subject to the following sale milestones relating to the Chapter 11 Cases:
• within three business days following the Petition Date, the Debtors must file a motion with theBankruptcy Court seeking to establish bidding procedures governing the sale of substantially all of the Debtors' assets (the "Bidding Procedures Motion"); • bySeptember 28, 2020 (subject to the availability of the Bankruptcy Court), entry of an order by theBankruptcy Court approving the Bidding Procedures Motion; • byOctober 26, 2020 , deadline for interested parties to submit bids for the purchase of the Debtors' assets; • byOctober 29, 2002 , deadline to hold an auction; • byNovember 10, 2020 (subject to the availability of the Bankruptcy Court), deadline for aBankruptcy Court hearing to approve the sale(s) of substantially all of the Debtors' assets (the "Sale Hearing"); and • byDecember 15, 2020 , deadline to consummate the sale(s) of substantially all of the Debtors' assets.
Item 2.03. Creation of a Direct Financial Obligation or Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 regarding the DIP Financing is incorporated by reference into this Item 2.03.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On
The Company does not intend to take any further action to appeal Nasdaq's
decision. Therefore, it is expected that the Company's common stock will be
delisted after the completion of Nasdaq's application to the
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It is expected that the Company's common stock will begin trading on the OTC
Pink Market on
The Company cautions that trading in the Company's securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company's securities may bear little or no relationship to the actual recovery, if any, by holders of the Company's securities in the Chapter 11 Cases. The Company expects that its equity holders will experience a complete loss on their investment, depending on the outcome of the Chapter 11 process.
Forward-Looking Statements
The statements contained in this Current Report that are not historical facts
are "forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. The forward-looking
statements are made on the basis of management's assumptions and expectations.
As a result, there can be no guarantee or assurance that these assumptions and
expectations will in fact occur. The forward-looking statements are subject to
risks and uncertainties that may cause actual results to materially differ from
those contained in the statements due to a variety of factors, including (1) the
duration and severity of the COVID-19 pandemic, any preventive or protective
actions taken by governmental authorities, the effectiveness of actions taken
globally to contain or mitigate its effects, and any unfavorable effects of the
COVID-19 pandemic on either the Company's manufacturing operations, or those of
its customer's or suppliers; (2) reduction in demand for the Company's
solutions, including any reduction in demand as a result of a COVID-19 triggered
economic recession, including any determination that the value of its assets is
impaired or that it does not have the ability to continue as a going concern;
(3) the Company's ability to accomplish its strategic objectives; (4) the
Company's ability to obtain future sales; (5) changes in worldwide economic and
political conditions, including adverse effects from terrorism or related
hostilities; (6) costs related to legal and administrative matters; (7) the
Company's ability to realize cost savings expected to offset price concessions;
(8) the Company's ability to successfully integrate acquired businesses,
including businesses located outside of
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2020 for a more complete discussion of these risks and uncertainties. Any or all
of these risks and uncertainties could cause actual results to differ materially
from those reflected in the forward-looking statements. These forward-looking
statements reflect management's analysis only as of the date of this Current
Report. The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date of filing this Current Report. In addition to the disclosures contained
herein, readers should carefully review risks and uncertainties contained in
other documents the Company files from time to time with the
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