The Company borrows money under an Amended and Restated Revolving Credit and Security Agreement with PNC Bank, National Association (“PNC”), which governs the Company’s Revolving Credit Facility (“PNC Facility”). The PNC Facility has a term ending on Advances made under the PNC Facility bear interest at the U.S. base rate plus an applicable margin ranging from to or LIBOR plus an applicable margin ranging from to The base commercial lending rate should approximate U.S. prime rate.  

 

The Company also borrows money under a Financing Agreement (the “Financing Agreement”), by and among us and certain of our subsidiaries, the lenders party to the Financing Agreement from time to time (collectively, the “Lenders”), and TCW Asset Management Company LLC, as collateral agent for the Lenders (“TCW”), which governs a term loan A facility (“Term A Loan Facility”) and a term loan B facility (“Term Loan B Facility” and, together with the Term Loan A Facility, the “TCW Facilities” and, together with the PNC Facility, the “Credit Facilities”). The TCW Facilities mature on the “Maturity Date”). The Term Loan A Facility bears interest, as selected by the Company at the time of borrowing, at the base rate plus an applicable margin of The Term Loan B Facility bears interest, as selected by the Company at the time of borrowing, at the base rate plus an applicable margin of or LIBOR plus an applicable margin of The base rate should approximate U.S. prime rate. Payments made under the Term Loan A Facility at any time prior to the Maturity Date (other than scheduled amortization payments and mandatory prepayments) are subject to an applicable premium equal to the amount of such payment multiplied by (i) in the event that such payment occurs before the anniversary of the closing date (ii) in the event that such payment occurs after the anniversary of the closing date and on or before the anniversary of the closing date and (iii) in the event that such payment occurs after the anniversary of the closing date and on or before the anniversary of the closing date. such applicable premium is payable for any payment of loans made under the Term Loan A Facility occurring after the anniversary of the Closing Date.

 

As at the funds available to borrow under the PNC Facility after deducting the current borrowing base conditions was ( ).The maximum amount of funds that could be available under the PNC Revolving Credit Facility is However, availability under the PNC Revolving Credit Facility is subject to certain conditions, including borrowing base conditions based on eligible inventory and accounts receivable, and certain conditions as determined by PNC. The Company is required to use a “lock-box” arrangement for the PNC Facility, whereby remittances from customers are swept daily to reduce the borrowings under this facility.

 

At ( ) was outstanding under the PNC Facility and is classified as a current liability based on the requirement to hold a “lock-box” under the terms of the PNC Facility.

 

At ( ) was outstanding under the TCW Term Loan A Facility and ( ) under the TCW Term Loan B Facility. The TCW Term Loan Facilities are reported on the consolidated balance sheet net of deferred financing fees of $ ( ) and a discount on debt of ( ) related to the outstanding warrants described below. On the Company repaid the TCW Term Loan B Facility in full.

 

The Credit Facilities are a joint and several obligations of the Company and its subsidiaries that are borrowers under the facilities and are jointly and severally guaranteed by other subsidiaries of the Company. Repayment under the PNC Facility and TCW Facilities are collateralized by the assets of the Company and each of its subsidiaries.

 

 

The Credit Facilities contain certain financial and non-financial covenants. The financial covenants under each Credit Facility require the Company to maintain a fixed charge coverage ratio, a total leverage ratio, and a senior leverage ratio quarterly during the term of the Credit Facilities.

 

The Company is in compliance with the financial covenants included in the Credit Facilities as at Management projects compliance with the financial covenants included in the Credit Facilities. Regarding the senior and total debt leverage ratios, these projections are sensitive to estimates, specifically forecasted adjusted earnings before interest, taxes and depreciation and projected debt balances at each reporting period.

 

 

     On warrants were issued to TCW and outstanding as at These warrants are exercisable on a cashless basis, or for an exercise price of   The Company initially recorded the value of the warrants as a warrant liability with a corresponding discount on the long-term debt in the amount of  The fair value has been assessed at per unit or as at As a result of the anti-dilution provision contained in the warrants that was triggered in connection with the Rights Offering and the Registered Direct Offering (each as defined below), the warrants were exercisable to purchase shares of common stock at The fair value of the warrant obligation is presented as a warrant liability on the consolidated balance sheet with changes to the fair value recorded each reporting period as either a gain or a loss in the consolidated statement of operations and comprehensive loss in selling, general and administrative expenses.