What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-11 compared with 2022-02-10 · 236 added, 858 removed, 382 unchanged (74% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Operations

(in thousands, except per share data) Three months ended December 31, 2021 Three months ended December 31, 2020

(in thousands, except per share data) Three months ended June 30, 2022 Three months ended June 30, 2021

Sales and other operating revenues $ 343,905 $ 333,290

2 unchanged sentences

Selling, general, and administrative expenses 34,588 33,845

Other (expense) income, net ( 209 ) 4,669

Other income, net 1,085 162

Restructuring and asset impairment charges 300 233

3 unchanged sentences

Loss before income taxes and other items ( 19,121 ) ( 18,636 )

Income tax expense 31,809 4,492

Income from unconsolidated affiliates 6,102 7,564

Income tax benefit 867 8,439

Income (loss) from unconsolidated affiliates 3,749 ( 1,431 )

Net loss ( 14,505 ) ( 11,628 )

9 unchanged sentences

and Subsidiaries

Condensed Consolidated Statements of Operations

Successor Predecessor

(in thousands, except per share data) Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Sales and other operating revenues $ 1,156,433 $ 497,394 $ 447,600

Cost of goods and services sold 997,033 424,498 402,594

Gross profit 159,400 72,896 45,006

Selling, general, and administrative expenses 106,005 61,627 87,858

Other (expense) income, net ( 1,863 ) 2,736 ( 539 )

Restructuring and asset impairment charges 7,652 8,991 566

Operating income (loss) 43,880 5,014 ( 43,957 )

Loss on deconsolidation/disposition of subsidiaries 9,525 — —

Debt retirement expense — — 828

Interest expense, net 82,820 32,921 45,190

Reorganization items, net — — 105,984

(Loss) income before income taxes and other items ( 48,465 ) ( 27,907 ) 16,009

Income tax expense (benefit) 9,242 ( 6,091 ) 292

Income from unconsolidated affiliates 5,999 7,798 2,358

Net (loss) income ( 51,708 ) ( 14,018 ) 18,075

Net loss attributable to noncontrolling interests ( 419 ) ( 540 ) ( 962 )

Net (loss) income attributable to Pyxus International, Inc.

$ ( 51,289 ) $ ( 13,478 ) $ 19,037

(Loss) earnings per share:

Basic $ ( 2.05 ) $ ( 0.54 ) $ 1.91

Diluted $ ( 2.05 ) $ ( 0.54 ) $ 1.91

Weighted average number of shares outstanding:

Basic 25,000 25,000 9,976

Diluted 25,000 25,000 9,992

See "Notes to Condensed Consolidated Financial Statements"

Pyxus International, Inc.

and Subsidiaries

Condensed Consolidated Statements of Comprehensive (Loss) Income

(in thousands) Three months ended December 31, 2021 Three months ended December 31, 2020

Condensed Consolidated Statements of Comprehensive Loss

(in thousands) Three months ended June 30, 2022 Three months ended June 30, 2021

Net loss $ ( 14,505 ) $ ( 11,628 )

Other comprehensive loss, net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment 947 689

Change in pension liability for settlements ( 35 ) 47

Cash flow hedges ( 1,503 ) 4,328

Total other comprehensive loss, net of tax ( 3,338 ) ( 717 )

Total other comprehensive (loss) income, net of tax ( 556 ) 5,017

Total comprehensive loss ( 15,061 ) ( 6,611 )

2 unchanged sentences

$ ( 15,219 ) $ ( 6,491 )

Successor Predecessor

(in thousands) Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Net (loss) income $ ( 51,708 ) $ ( 14,018 ) $ 18,075

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment ( 2,655 ) ( 952 ) 4,377

Pension and other postretirement benefit plans ( 512 ) — 734

Change in pension liability for settlements ( 35 ) 47 —

Cash flow hedges ( 118 ) ( 619 ) ( 531 )

Total other comprehensive (loss) income, net of tax ( 3,320 ) ( 1,524 ) 4,580

Total comprehensive (loss) income ( 55,028 ) ( 15,542 ) 22,655

Comprehensive loss attributable to noncontrolling interests ( 419 ) ( 661 ) ( 1,030 )

Comprehensive (loss) income attributable to Pyxus International, Inc.

$ ( 54,609 ) $ ( 14,881 ) $ 23,685

See "Notes to Condensed Consolidated Financial Statements"

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands) December 31, 2021 December 31, 2020 March 31, 2021

(in thousands) June 30, 2022 June 30, 2021 March 31, 2022

Current assets

36 unchanged sentences

Total liabilities 1,649,188 1,434,499 1,517,156

Pyxus International, Inc.

and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands) December 31, 2021 December 31, 2020 March 31, 2021

Commitments and contingencies

5 unchanged sentences

Retained deficit ( 233,476 ) ( 148,202 ) ( 218,813 )

Accumulated other comprehensive loss ( 10,053 ) ( 1,403 ) ( 6,733 )

Accumulated other comprehensive income (loss) 3,248 ( 1,716 ) 3,804

Total stockholders’ equity of Pyxus International, Inc.

7 unchanged sentences

Condensed Statements of Consolidated Stockholders' Equity

Attributable to Pyxus International, Inc.

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income (Loss)

(in thousands) Common

7 unchanged sentences

Other — — — — — ( 3,052 ) ( 3,052 )

Other comprehensive income, net of tax — — 689 — 4,328 — 5,017

Other comprehensive loss, net of tax — — 947 — ( 1,503 ) — ( 556 )

Balance, June 30, 2022 $ 390,290 $ ( 233,476 ) $ ( 7,926 ) $ 6,328 $ 4,846 $ 3,196 $ 163,258

Balance, March 31, 2021 $ 391,089 $ ( 136,686 ) $ ( 4,649 ) $ 541 $ ( 2,625 ) $ 6,270 $ 253,940

Net loss attributable to Pyxus International, Inc.

1 unchanged sentence

Other — ( 8 ) — — — 8 —

Other comprehensive loss, net of tax — — ( 1,591 ) ( 512 ) ( 2,896 ) — ( 4,999 )

Balance, September 30, 2021 391,089 ( 157,883 ) ( 5,551 ) 29 ( 1,193 ) 5,728 232,219

Net (loss) income attributable to Pyxus International, Inc.

— ( 30,100 ) — — — 43 ( 30,057 )

Change in investment in subsidiaries ( 799 ) — — — — ( 155 ) ( 954 )

Other comprehensive loss, net of tax — — ( 1,753 ) ( 35 ) ( 1,550 ) — ( 3,338 )

Balance, December 31, 2021 $ 390,290 $ ( 187,983 ) $ ( 7,304 ) $ ( 6 ) $ ( 2,743 ) $ 5,616 $ 197,870

See "Notes to Condensed Consolidated Financial Statements"

Pyxus International, Inc.

and Subsidiaries

Condensed Statements of Consolidated Stockholders' Equity

Attributable to Pyxus International, Inc.

Accumulated Other Comprehensive Loss

(in thousands) Common

Stock Retained

(Deficit) Earnings Currency Translation Adjustment Pensions,

Net of Tax Derivatives, Net of Tax Noncontrolling

Interests Total Stockholders' Equity

Balance, March 31, 2020 (Predecessor) $ 469,677 $ ( 488,545 ) $ ( 22,509 ) $ ( 37,154 ) $ 531 $ 1,692 $ ( 76,308 )

Net loss attributable to Pyxus International, Inc.

— ( 92,161 ) — — — ( 648 ) ( 92,809 )

Stock-based compensation 117 — — — — — 117

Dividends paid — — — — — ( 120 ) ( 120 )

Other comprehensive (loss) income, net of tax — — ( 64 ) 494 ( 531 ) ( 76 ) ( 177 )

Balance, June 30, 2020

(Predecessor) 469,794 ( 580,706 ) ( 22,573 ) ( 36,660 ) — 848 ( 169,297 )

Net income attributable to Pyxus International, Inc.

— 111,198 — — — ( 314 ) 110,884

Stock-based compensation 8 — — — — — 8

Dividends paid — — — — — ( 180 ) ( 180 )

Change in investment in subsidiaries ( 1,655 ) — — — — ( 461 ) ( 2,116 )

Other comprehensive income, net of tax — — 689 — 4,328 — 5,017

Cancellation of Predecessor equity ( 468,147 ) 469,508 18,064 36,420 — 99 55,944

Balance, August 31, 2020 (Predecessor) $ — $ — $ — $ — $ — $ — $ —

Balance, September 1, 2020 (Successor) $ — $ — $ — $ — $ — $ — $ —

Issuance of Successor common stock 391,402 — — — — — 391,402

Fresh start adjustment to noncontrolling interests — — — — — 4,359 4,359

Net loss attributable to Pyxus International, Inc.

— ( 5,313 ) — — — ( 485 ) ( 5,798 )

Dividends paid — — — — — ( 123 ) ( 123 )

Other comprehensive (loss) income, net of tax — — ( 828 ) — — 21 ( 807 )

Balance, September 30, 2020 (Successor) 391,402 ( 5,313 ) ( 828 ) — — 3,772 389,033

Net loss attributable to Pyxus International, Inc.

— ( 8,165 ) — — — ( 55 ) ( 8,220 )

Fresh start adjustments ( 313 ) — — — — ( 246 ) ( 559 )

Other comprehensive (loss) income, net of tax — — ( 3 ) 47 ( 619 ) ( 142 ) ( 717 )

Balance, December 31, 2020 (Successor) $ 391,089 $ ( 13,478 ) $ ( 831 ) $ 47 $ ( 619 ) $ 3,329 $ 379,537

Balance, June 30, 2021 $ 391,089 $ ( 148,202 ) $ ( 3,960 ) $ 541 $ 1,703 $ 6,158 $ 247,329

See "Notes to Condensed Consolidated Financial Statements"

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Successor Predecessor

(in thousands) Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

(in thousands) Three months ended June 30, 2022 Three months ended June 30, 2021

Operating Activities:

Net (loss) income $ ( 51,708 ) $ ( 14,018 ) $ 18,075

Adjustments to reconcile net (loss) income to net cash used by operating activities:

Net loss $ ( 14,505 ) $ ( 11,628 )

Adjustments to reconcile net loss to net cash used by operating activities:

Depreciation and amortization 5,929 4,066

1 unchanged sentence

Debt amortization/interest 5,530 6,132

Loss (gain) on foreign currency transactions 1,554 ( 2,196 ) ( 11,077 )

Asset impairment charges 6,111 3,982 213

Loss on foreign currency transactions 39 1,325

Income from unconsolidated affiliates, net of dividends 7,773 10,567

Reorganization items, net — — ( 130,215 )

Changes in operating assets and liabilities, net

Trade and other receivables 26,612 ( 59,058 )

Inventories and advances to tobacco suppliers ( 228,994 ) ( 118,268 )

Deferred items ( 8,214 ) ( 3,643 )

Recoverable income taxes ( 796 ) ( 5,971 )

Payables and accrued expenses ( 25,249 ) ( 17,950 )

Advances from customers ( 6,997 ) 17,515

Prepaid expenses ( 6,027 ) ( 367 )

Income taxes 1,313 ( 4,320 )

Other operating assets and liabilities 3,396 118

Other, net ( 2,899 ) ( 4,475 )

4 unchanged sentences

DIP loan to deconsolidated subsidiary — ( 5,229 )

Collection of DIP loan from deconsolidated subsidiary 10,996 — —

Payments to acquire businesses, net of cash acquired — — ( 4,805 )

Proceeds from settlement of debt claims from deconsolidated subsidiaries 2,011 —

Other, net 1,766 1,017

2 unchanged sentences

Net proceeds and repayments from short-term borrowings 170,419 29,015

Proceeds from DIP facility — — 206,700

Repayment of DIP facility — — ( 213,418 )

Proceeds from DDTL facility — 117,600

Repayment of DDTL facility ( 15,375 ) — —

Proceeds from term loan facility — — 213,418

Proceeds from 10.0 % first lien notes

Repayment of 8.5 % first lien notes

— — ( 280,844 )

Proceeds from revolving loans facilities 11,000 37,500 27,438

Repayment of revolving loans facilities ( 26,000 ) — ( 44,900 )

Proceeds from long-term borrowings — 462 2,568

Repayment of second lien notes — — ( 1,199 )

Share repurchases — — ( 1,000 )

Debt issuance costs ( 2,036 ) ( 6,148 )

DIP financing fees — — ( 9,344 )

Other debt restructuring costs — — ( 7,574 )

Other, net 372 129

Net cash provided (used) by financing activities 92,188 ( 2,851 ) 63,669

Net cash provided by financing activities 168,755 140,596

Effect of exchange rate changes on cash 322 514

Pyxus International, Inc.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Successor Predecessor

(in thousands) Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Increase (decrease) in cash, cash equivalents, and restricted cash 52,530 9,359 ( 55,107 )

Decrease in cash, cash equivalents, and restricted cash ( 26,378 ) ( 15,193 )

Cash and cash equivalents at beginning of period 198,777 92,705

4 unchanged sentences

Cash paid for interest, net 12,704 15,856

Cash paid for reorganization items — — 7,314

Noncash investing and financing activities:

Purchases of property, plant, and equipment included in accounts payable 267 1,090 1,759

Noncash investing activities:

Noncash amounts obtained as a beneficial interest in exchange for transferring trade receivables in a securitization transaction 29,033 38,498

Noncash contingent consideration from sale of business 1,000 — —

Cancellation of second lien notes — — ( 634,487 )

See "Notes to Condensed Consolidated Financial Statements"

3 unchanged sentences

(in thousands, except per share data)

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

New Accounting Standards

Emergence from Voluntary Reorganization under Chapter 11

Fresh Start Reporting

CCAA Proceeding and Deconsolidation of Subsidiaries

Revenue Recognition

Restructuring and Asset Impairment Charges

(Loss) Earnings Per Share

Loss Per Share

Inventories, Net

Acquisitions and Dispositions

CCAA Proceeding and Deconsolidation of Subsidiaries

Equity Method Investments

Variable Interest Entities

Goodwill and Other Intangible Assets, Net

Other Intangible Assets, Net

Debt Arrangements

7 unchanged sentences

Subsequent Events

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

The accompanying condensed consolidated financial statements represent the consolidation of Pyxus International, Inc.

(the "Company" or "Pyxus") and all companies that Pyxus directly or indirectly controls, either through majority ownership or otherwise.

The terms the “Company,” “Pyxus,” “we,” or “us” when used with respect to periods commencing prior to the effectiveness of the Plan (as defined below), refer to Old Pyxus (as defined below), unless the context would indicate otherwise.

(the "Company", "Pyxus", "we", or "us") and all companies that Pyxus directly or indirectly controls, either through majority ownership or otherwise.

These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

6 unchanged sentences

Due to the seasonal nature of the Company’s business, the results of operations for a fiscal quarter are not necessarily indicative of the operating results that may be attained for other quarters or a full fiscal year.

The Company applied Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 852 – Reorganizations (“ASC 852”) in preparing the condensed consolidated financial statements.

For periods subsequent to the commencement of the Chapter 11 Cases (as defined below), ASC 852 requires distinguishing transactions associated with the reorganization separate from activities related to the ongoing operations of the business.

Upon the effectiveness of the Plan and the emergence of the Debtors (as defined below) from the Chapter 11 Cases, the Company determined it qualified for fresh start reporting under ASC 852, which resulted in the Company becoming a new entity for financial reporting purposes on the Effective Date (as defined below).

The Company elected to apply fresh start reporting using a convenience date of August 31, 2020 (the “Fresh Start Reporting Date”).

The Company evaluated and concluded that the events between the Effective Date and the Fresh Start Reporting Date were not material to the Company's financial reporting on both a quantitative or qualitative basis.

See “ Note 4.

Fresh Start Reporting ” for additional information.

Due to the application of fresh start reporting, the pre-emergence and post-emergence periods are not comparable.

The lack of comparability is emphasized by the use of a “black line” to separate the Predecessor and Successor periods in the condensed consolidated financial statements and footnote tables.

References to “Successor” relate to our financial position after August 31, 2020 and results of operations for periods commencing after August 31, 2020.

References to “Predecessor” relate to our financial position on or before August 31, 2020 and results of operations for periods ending on or before August 31, 2020.

Bankruptcy Proceedings

On June 15, 2020 (the "Petition Date"), Old Holdco, Inc.

(then named Pyxus International, Inc.) (“Old Pyxus”) and its then subsidiaries Alliance One International, LLC, Alliance One North America, LLC, Alliance One Specialty Products, LLC, and GSP Properties, LLC (collectively, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code with the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to implement a prepackaged Chapter 11 plan of reorganization to effectuate a financial restructuring (the “Restructuring”) of Old Pyxus’ secured debt.

On August 21, 2020, the Bankruptcy Court issued an order (the “Confirmation Order”) confirming the Amended Joint Prepackaged Chapter 11 Plan of Reorganization (the “Plan”) filed by the Debtors in the Chapter 11 Cases.

On August 24, 2020 (the “Effective Date”), the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases.

In connection with the satisfaction of the conditions to effectiveness as set forth in the Confirmation Order and the Plan, Old Pyxus completed a series of transactions pursuant to which the business assets and operations of Old Pyxus were vested in a new Virginia corporation, Pyxus Holdings, Inc., which is a subsidiary of the Company.

Pursuant to the Confirmation Order and the Plan, at the effectiveness of the Plan all outstanding shares of common stock, and rights to acquire the common stock, of Old Pyxus were cancelled and the shares of common stock of the Company were delivered to certain creditors of Old Pyxus.

See “ Note 3.

Emergence from Voluntary Reorganization under Chapter 11 ” for additional information.

Reclassifications

Certain prior period amounts relating to balances with related parties have been reclassified to conform to the current year presentation in the condensed consolidated balance sheets.

Segment Information

During the year ended March 31, 2022, the Company reevaluated its operating and reportable segments under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 280 - Segment Reporting .

As a result of this reevaluation, effective as of the fourth quarter of the fiscal year ended March 31, 2022, the Company has eight operating segments organized by geographic area and product category and are aggregated into one reportable segment for financial reporting purposes:

Based on our reevaluation, the Company concluded that the economic characteristics of our five Leaf region operations in North America, South America, Europe, Asia, and Africa were similar.

Each geographic region derives its revenues mainly from shipping processed tobacco to manufacturers of cigarettes and other consumer tobacco products around the world, with a smaller percentage of revenue in each region being derived from performing third-party tobacco processing services.

The three product category operating segments other than Leaf do not individually or in the aggregate meet the quantitative and qualitative thresholds to be individually reportable and have been combined and reported in the "All Other" category for purposes of reconciliation of respective balances for the Leaf segment to the condensed consolidated financial statements.

Prior-period segment financial information has been revised to conform to the current-year presentation.

See " Note 19.

Related Party Transactions " for additional information.

Interest expense and interest income amounts reported in prior periods have been reclassified to conform to the current year's net presentation of interest expense in the condensed consolidated statements of operations.

Cash paid for interest and cash received from interest as reported under other information in the condensed consolidated statements of cash flows have been reclassified to conform to the current year's net presentation of cash paid for interest.

Segment Information " for additional information.

New Accounting Standards

Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued Accounting Standards Update ("ASU") No.

2019-12, Simplifying the Accounting for Income Taxes .

ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocations, the methodology for calculating income taxes during interim periods when there are changes in tax laws or when year-to-date losses exceed anticipated losses, and the recognition of deferred tax liabilities for outside basis differences in foreign investments.

This guidance also simplifies aspects of the accounting for franchise taxes that are partially based on income, separate financial statements of legal entities not subject to tax, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

The guidance became effective for the Company on April 1, 2021.

The adoption of this new accounting standard did not have a material impact on the Company's financial condition, results of operations, cash flows, or disclosures.

Recent Accounting Pronouncements Not Yet Adopted

In November 2021, the FASB issued ASU No.

In November 2021, the FASB issued Accounting Standards Update ("ASU") No.

2021-10, Disclosures by Business Entities about Government Assistance .

1 unchanged sentence

The new disclosures are required for annual periods for transactions with a government entity that are within the scope of the Topic.

The new disclosure guidance will be adopted prospectively and is effective for the Company's fiscal year beginning April 1, 2022.

The Company is currently evaluating the impact this new accounting standard will have on its consolidated financial statements and related disclosures.

Emergence from Voluntary Reorganization under Chapter 11

Bankruptcy Proceedings

On June 15, 2020, the Debtors filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware to implement a prepackaged Chapter 11 plan of reorganization in order to effectuate a financial restructuring of the Debtors’ debt.

Reorganization Items

Expenditures, gains, and losses that are realized or incurred by the Debtors subsequent to the Petition Date and as a direct result of the Chapter 11 Cases are reported as reorganization items, net in the condensed consolidated statements of operations, and include the following:

Five months ended August 31, 2020

Reorganization items, net:

Gain on settlement of liabilities subject to compromise 462,304

Professional fees ( 30,526 )

United States trustee fees ( 970 )

Write-off of unamortized debt issuance costs and discount ( 5,303 )

Issuance of exit facility shares and DIP financing fees ( 208,538 )

Other debt restructuring costs ( 19,442 )

Fresh start reporting adjustments ( 91,541 )

Summary Features of the Plan of Reorganization

On the Effective Date, the Plan became effective in accordance with its terms, and the Debtors emerged from the Chapter 11 Cases.

(“Pyxus Holdings”), which is a subsidiary of the Company.

Under the Plan, all suppliers, vendors, employees, trade partners, foreign lenders, and landlords were unimpaired and were satisfied in full in the ordinary course of business, and the existing trade and customer contracts and terms of Old Pyxus were maintained by the Company and its subsidiaries.

Commencing upon the Effective Date, the Company, through its subsidiaries, continued to operate in the ordinary course the business formerly operated by Old Pyxus.

Old Pyxus, which retained no assets, has commenced a dissolution process and is being wound down.

Treatment of Claims and Interests

The Plan treated claims against and interest in Old Pyxus upon the effectiveness of the Plan as follows:

• Other Secured Claims (as defined in the Plan) were either (i) paid in full in cash, (ii) satisfied by delivery of collateral securing any such Claim (as defined in the Plan) and payment of any required interest, or (iii) reinstated.

• Other Priority Claims (as defined in the Plan) were paid in full in cash.

• Holders of First Lien Notes Claims (as defined in the Plan) received (i) payment in full in cash of all accrued and unpaid interest on such First Lien Notes, and (ii) the Notes (as defined below).

• Holders (as defined in the Plan) of Second Lien Notes Claims (as defined in the Plan) received, at the Holder’s election, (i) their pro rata share of the Company's common stock distributed in connection with the effectiveness of the Plan or (ii) cash equal to 2.00 % of the principal amount of all Second Lien Notes beneficially owned by such Holder.

• Lenders under Foreign Credit Lines (as defined in the Plan) were paid in the ordinary course of business in accordance with the terms of the relevant agreement.

• General Unsecured Claims (as defined in the Plan) were paid in the ordinary course of business.

• The existing common stock, and rights to acquire common stock, of Old Pyxus was discharged, cancelled, released, and extinguished and of no further force or effect.

Third-Party Releases

Upon the effectiveness of the Plan, certain Holders of Claims and Interests (as such terms are defined in the Plan) with respect to the Debtors, except as otherwise specified in the Plan or Confirmation Order, were deemed to release and discharge the Released Parties (as defined in the Plan) from certain claims, obligations, rights, suits, damages, causes of action and liabilities in connection with the Chapter 11 Cases.

Transactions in Connection with Emergence

As contemplated by the Plan, certain transactions were effected on or prior to the effectiveness of the Plan, including the following:

• Three new Virginia corporations (i.e., the Company (then known as “Pyxus One, Inc.”), Pyxus Parent, Inc.

and Pyxus Holdings) were organized.

• Pyxus Parent, Inc.

issued all of its equity interests to the Company in exchange for 25,000 shares of common stock, no par value, of the Company (such common stock is referred to as “New Common Stock” and the 25,000 shares of which are referred to as the “Equity Consideration”).

Pyxus Holdings then issued all of its equity interests to Pyxus Parent, Inc.

in exchange for the Equity Consideration.

• Pyxus Holdings entered into the Exit ABL Credit Agreement (as defined below) to borrow cash under the ABL Credit Facility (as defined below) which together with cash on-hand was sufficient to fund (1) the distributions to holders of Allowed Second Lien Notes Claims (as defined in the Plan) that elected to take the Second Lien Notes Cash Option (as defined in the Plan) and (2) the Existing Equity Cash Pool (as defined in the Plan) (collectively such amount of cash is referred to as the “Cash Consideration”).

• Pursuant to an Asset Purchase Agreement, Old Pyxus transferred to Pyxus Holdings all of its assets (including by assuming and assigning all of Old Pyxus’ Executory Contracts and Unexpired Leases (as such terms are defined in the Plan) to Pyxus Holdings in accordance with the Plan, other than those Executory Contracts and Unexpired Leases that were rejected) and Pyxus Holdings assumed all of Old Pyxus’ obligations that are not discharged under the Plan (including all of Old Pyxus’ obligations to satisfy Allowed Administrative Claims, Allowed Professional Fee Claims, Allowed Other Secured Claims, Allowed Other Priority Claims, Allowed Foreign Credit Line Claims, Allowed General Unsecured Claims, Allowed Debtor Intercompany Claims, and Allowed Debtor Intercompany Claims as set forth in the Plan (as such terms are defined in the Plan)) in exchange for (i) Pyxus Holdings transferring the Equity Consideration to Old Pyxus, (ii) Pyxus Holdings transferring the Cash Consideration to Old Pyxus, (iii) Pyxus Holdings issuing the Notes (as defined below) under the Indenture (as defined below) which, on behalf of Old Pyxus, was issued to the Holders of Allowed

First Lien Notes Claims (as defined in the Plan) as set forth in the Plan, and (iv) Pyxus Holdings issuing the Term Loans (as defined below) under the Term Loan Credit Facility (as defined below) which, on behalf of Old Pyxus, was issued to the holders of the DIP Facility Claims (as defined in the Plan) as set forth in the Plan.

In addition to the transfer of assets to Pyxus Holdings, Pyxus Holdings made an offer of employment to all employees of Old Pyxus and all such employees became employed by Pyxus Holdings, or a designated subsidiary, upon the effectiveness of the Plan on the same terms and conditions existing immediately prior to the effectiveness of the Plan.

• The Company and Pyxus Parent, Inc., along with each applicable subsidiary of the Company, guaranteed the Notes, the Term Loan Credit Facility, and the ABL Credit Facility.

• Old Pyxus provided for the distribution of (i) the Notes to the Holders of Allowed First Lien Notes Claims pursuant to the Plan, (ii) approximately 12,500 shares of New Common Stock to Holders of Allowed Second Lien Notes Claims (as defined in the Plan) that elected to receive New Common Stock under the Second Lien Notes Stock Option (as defined in the Plan) pursuant to the Plan, (iii) cash to the Holders of Allowed Second Lien Notes Claims that elected to take or are deemed to elect to take the Second Lien Notes Cash Option (as defined in the Plan), (iv) cash to the Qualifying Holders (as defined in the Plan) of the common stock of Old Pyxus pursuant to the Plan, (v) the Term Loans under the Term Loan Credit Facility and approximately 11,100 shares of New Common Stock to the Holders of the DIP Facility Claims pursuant to the Plan, and (vi) approximately 1,400 shares of New Common Stock in satisfaction of the Second Lien Notes RSA Fee Shares (as defined in the Plan) and in satisfaction of the Backstop Fee Shares (as defined in the Plan) to the persons entitled thereto pursuant to the terms and conditions of the Restructuring Support Agreement, dated June 14, 2020, by and among Old Pyxus and certain of its creditors party thereto, which was filed as Exhibit 10.1 to the Current Report on Form 8-K of Old Pyxus filed on June 15, 2020.

• Old Pyxus changed its name to Old Holdco, Inc., and the Company changed its name to Pyxus International, Inc.

• The Company elected a board of directors, initially comprising J.

Pieter Sikkel, Holly Kim, and Patrick Fallon, and appointed as its officers the individuals serving as officers of Old Pyxus to the same offices held immediately prior to the effectiveness of the Old Plan.

The Company as Successor Issuer

As a result of these transactions, the Company is deemed to be the successor issuer to Old Pyxus under Rule 12g‑3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As a result, the shares of New Common Stock were deemed to be registered under Section 12(g) of the Exchange Act and the Company was thereby deemed to be subject to the informational requirements of the Exchange Act, and the rules and regulations promulgated thereunder and, in accordance therewith, is required to file reports and other information with the Securities and Exchange Commission.

ABL Credit Facility

On the Effective Date, Pyxus Holdings entered into an Exit ABL Credit Agreement (the “Exit ABL Credit Agreement”), dated as of August 24, 2020 by and among, amongst others, Pyxus Holdings, certain lenders party thereto and Wells Fargo Bank, National Association, as administrative agent and collateral agent to establish an asset-based revolving credit facility (the “ABL Credit Facility”).

A detailed description of the Exit ABL Credit Agreement and ABL Credit Facility is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

See "Note 15.

Debt Arrangements" for additional information with respect to the Exit ABL Credit Agreement and the ABL Credit Facility.

Term Loan Credit Facility

On the Effective Date, Pyxus Holdings entered into an Exit Term Loan Credit Agreement (the “Term Loan Credit Agreement”), dated as of August 24, 2020 by and among, amongst others, Pyxus Holdings, certain lenders party thereto and Alter Domus (US) LLC, as administrative agent and collateral agent to establish a term loan credit facility in an aggregate principal amount of approximately $ 213,400 (the “Term Loan Credit Facility”).

A detailed description of the Term Loan Credit Agreement and Term Loan Credit Facility is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

See "Note 15.

Debt Arrangements" for additional information with respect to the Term Loan Credit Agreement and the Term Loan Credit Facility.

Senior Secured First Lien Notes

On the Effective Date, Pyxus Holdings issued approximately $ 280,800 in aggregate principal amount of its 10.00 % Senior Secured First Lien Notes due 2024 (the “Notes”) to holders of Allowed First Lien Notes Claims (as defined in the Plan) pursuant to an Indenture (the “Indenture”) dated as of the Effective Date among Pyxus Holdings, the initial guarantors party thereto, and Wilmington Trust, National Association, as trustee, and collateral agent.

A detailed description of the Notes and the Indenture is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

See "Note 15.

Debt Arrangements" for additional information with respect to the Notes and the Indenture.

Shareholders Agreement

On August 24, 2020, the Company entered into a Shareholders Agreement (the “Shareholders Agreement”), among the Company and the investors listed therein, each other beneficial owner of the Company's common stock as of the date of the Shareholder Agreement deemed to be a party thereto pursuant to the Plan and other persons that may from time to time become parties thereto (collectively, the “Investors”).

The Shareholders Agreement provides that each of Glendon Capital Management, L.P.

(together with its affiliates, the “Glendon Investor”) and Monarch Alternative Capital LP (together with its affiliates, the “Monarch Investor”) shall be entitled to nominate two individuals to serve on the seven -member board of directors of the Company so long as it beneficially owns at least 20 % of the outstanding shares of the Company's common stock, or one individual to serve as such a director if it beneficially owns fewer than 20 % of the outstanding shares but at least 10 % of the outstanding shares.

The Shareholders Agreement provides that the Investors shall take all necessary action to elect such nominees of each of the Glendon Investor and the Monarch Investor as directors, as well as the election of the chief executive officer of the Company as a director and other individuals qualifying as independent directors to be selected by Investors that beneficially own 5 % or more of the outstanding shares of common stock of the Company, as determined by a majority of the shares of the Company's common stock beneficially owned by such Investors.

The Shareholders Agreement provides that the chairperson of the board of directors of the Company is to be elected by a majority of the directors that had been nominated by the Glendon Investor (the “Glendon Directors”) and those that had been nominated by the Monarch Investor (the “Monarch Directors”), with the chairperson of such board to be elected by the board of directors of the Company if the Glendon Directors and Monarch Directors are together fewer than three in number or fail to appoint a chairperson.

The Shareholders Agreement also includes provisions for the removal and replacement of the Glendon Directors at the request of the Glendon Investor and the removal and replacement of the Monarch Directors at the request of the Monarch Director, as well as provisions with respect to the calling and quorum of meetings of the board of directors of the Company, membership of committees of the board of directors of the Company, and compensation and insurance of members of the board of directors of the Company.

The Shareholders Agreement also provides for tag-along rights for Investors beneficially owning 1 % or more of the outstanding shares of the Company's common stock (the “ 1 % Investors”) upon the transfer by an Investor or group of Investors of 20 % or more of the outstanding shares of the Company's common stock, drag-along rights upon the transfer of shares by an Investor or group of Investors of 50 % or more of the outstanding shares of the Company's common stock, rights of first offer with respect to the transfer by an Investor, subject to certain exceptions, of 1 % or more of the outstanding shares of the Company common stock, pre-emptive rights to the 1 % Investors upon issuance of new securities by the Company, and demand and piggyback registration rights.

The Shareholders Agreement includes the agreement of the Investors not to transfer shares of common stock of the Company (i) in violation of federal and state securities laws, (ii) in a transfer that would cause the Company to be regarded as an “investment company” under the Investment Company Act of 1940, as amended, (iii) in a transfer, at any time that the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, that would cause the number of holders of the Company's common stock to exceed specified thresholds, or (iv) in a transfer that is, to the knowledge of the transferor after reasonable inquiry, (A) to any specified competitor of the Company (B) or to a person that would become either a beneficial owner of 5 % of the outstanding common stock of the Company or a “5-percent shareholder” within the meaning of Section 382 of the Internal Revenue Code and the regulations promulgated thereunder (collectively, a “ 5 % Holder”).

The Shareholders Agreement provides that the board of directors may waive these restrictions, provided that any waiver of the restriction with respect to a person that would become a 5 % Holder upon such transfer may be waived only if the transferee enters into a joinder agreeing to be bound by the Shareholders Agreement.

Fresh Start Reporting

In connection with the emergence from Chapter 11 Cases, the Company qualified for fresh start reporting as (i) the holders of existing voting shares of the Predecessor received less than 50% of the voting shares of the Successor Company and (ii) the preliminary reorganization value of the Company's assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims.

In accordance with ASC 852, with the application of fresh start reporting, the Company allocated the preliminary reorganization value to its individual assets and liabilities based on their estimated fair values.

The Effective Date estimated fair values of certain of the Company's assets and liabilities differed materially from their recorded values as reflected on the historical balance sheets.

Reorganization Value

The reorganization value represents the fair value of the Company’s total assets before considering liabilities and is intended to approximate the amount a willing buyer would pay for the Company’s assets immediately after restructuring.

The reorganization value was derived from the enterprise value, which represents the estimated fair value of an entity’s long-term debt and equity.

As set forth in the Plan, the enterprise value (excluding cash) of the Company was estimated to be in the range of $ 1,251,000 to $ 1,524,000 with a midpoint of $ 1,388,000 .

The Company estimated its enterprise value to be $ 1,252,379 , which is near the low point of the range.

The Company believes utilizing an estimated enterprise value near the low point of the range is appropriate due to the identification of Level 1 trading activity that indicated the estimated enterprise value was near

the low point of the range, the Company's performance lagging behind plan (due in part to the continued impact of the COVID-19 pandemic), and the utilization of an increased discount rate for the Other Products and Services long-term projections.

The estimated enterprise value is not necessarily indicative of actual value or financial results.

Changes in the economy or the financial markets could result in a different estimated enterprise value.

The calculated enterprise value relies on the three methodologies listed below collectively.

The actual value of the business is subject to certain uncertainties and contingencies that are difficult to predict and will fluctuate with changes in various factors affecting the financial conditions and prospects of the business.

The following reconciles the estimated enterprise value to the estimated fair value of the Successor common stock as of the Fresh Start Reporting Date:

Enterprise value, excluding cash $ 1,252,379

cash, cash equivalents, and restricted cash 117,587

fair value of debt ( 974,205 )

Fair value of Successor stockholders’ equity $ 395,761

Shares issued upon emergence 25,000

Per share value $ 15.83

The following reconciles estimated enterprise value to the reorganization value of the Successor assets to be allocated to individual assets as of the Fresh Start Reporting Date:

Enterprise value, excluding cash $ 1,252,379

cash, cash equivalents, and restricted cash 117,587

working capital liabilities 170,905

other operating liabilities 54,700

non-operating liabilities 113,954

Reorganization value of Successor assets $ 1,709,525

With the assistance of financial advisors, the Company determined the estimated enterprise value and the corresponding estimated equity value of the Successor by considering various valuation methods, including (i) discounted cash flow method, (ii) guideline public company method, and (iii) selected transaction analysis method.

In order to estimate the enterprise value using the discounted cash flow analysis approach, the Company’s estimated future cash flow projections through 2024, plus a terminal value calculated using a capitalization rate applied to normalized cash flows were discounted to an assumed present value using our estimated weighted average cost of capital ( 12 %), which represents the internal rate of return.

The identified intangible assets of $ 70,999 , which principally consisted of trade names, technology, licenses, and customer relationships, were also valued with the assistance of financial advisors and were estimated based on either the relief-from-royalty or multi-period excess earnings methods.

Significant assumptions included discount rates and certain assumptions that form the basis of the forecasted results such as revenue growth rates, margins, customer attrition, and royalty rates.

Some of these estimates are inherently uncertain and may be affected by future economic and market conditions.

Condensed Consolidated Balance Sheet

The adjustments set forth in the following condensed consolidated balance sheet as of August 31, 2020 reflect the effects of the transactions contemplated by the Plan and executed on the Fresh Start Reporting Date (reflected in the column entitled “Reorganization Adjustments”) as well as the fair value and other required accounting adjustments resulting from the adoption of fresh start reporting (reflected in the column entitled “Fresh Start Reporting Adjustments”).

Pre-petition liabilities that were allowed as claims in the Chapter 11 Cases are classified as liabilities subject to compromise within the condensed consolidated balance sheet.

(in thousands) As of August 31, 2020

Fresh Start Reporting Adjustments

Predecessor Reorganization Adjustments As Reported at September 30, 2020 As Adjusted at December 31, 2020 Successor

Current assets

Cash and cash equivalents $ 111,427 $ ( 18,289 ) (1) $ — $ — $ 93,138

Restricted cash 2,949 21,500 (2) — — 24,449

Trade receivables, net 152,309 — — — 152,309

Other receivables 13,227 — — — 13,227

Accounts receivable, related parties 2,780 — — — 2,780

Inventories, net 861,851 — — — 861,851

Advances to tobacco suppliers, net 44,061 — — — 44,061

Recoverable income taxes 5,830 — — — 5,830

Prepaid expenses 34,350 — — — 34,350

Other current assets 15,059 — — — 15,059

Total current assets 1,243,843 3,211 — — 1,247,054

Restricted cash 389 — — — 389

Investments in unconsolidated affiliates 54,460 — 13,291 30,531 (13) 84,991

Goodwill 6,120 — 48,756 31,815 (14) 37,935

Other intangible assets, net 64,924 — 1,596 6,075 (15) 70,999

Deferred income taxes, net 125 — 9,638 7,484 (16) 7,609

Long-term recoverable income taxes 3,130 — — — 3,130

Other noncurrent assets 45,821 3,139 (3) ( 310 ) ( 310 ) (17) 48,650

Right-of-use assets 39,576 — ( 4,281 ) ( 4,281 ) (18) 35,295

Property, plant, and equipment, net 299,293 — ( 124,965 ) ( 125,820 ) (19) 173,473

Total assets $ 1,757,681 $ 6,350 $ ( 56,275 ) $ ( 54,506 ) $ 1,709,525

Liabilities and Stockholders’ Equity

Current liabilities

Notes payable to banks $ 461,783 $ — $ — $ — $ 461,783

DIP financing 206,700 ( 206,700 ) (4) — — —

Accounts payable 58,813 334 (5) 25 25 59,172

Accounts payable, related parties 26,125 — — — 26,125

Advances from customers 23,967 — — — 23,967

Accrued expenses and other current liabilities 113,118 ( 31,853 ) (6) ( 1,792 ) ( 1,792 ) (20) 79,473

Income taxes payable 8,319 — — — 8,319

Operating leases payable 11,083 — ( 992 ) ( 992 ) (21) 10,091

Current portion of long-term debt 90 — — — 90

Total current liabilities 909,998 ( 238,219 ) ( 2,759 ) ( 2,759 ) 669,020

Long-term taxes payable 7,623 — — — 7,623

Long-term debt 277,090 250,546 (7) ( 15,304 ) ( 15,304 ) (22) 512,332

Deferred income taxes 20,749 91 (8) ( 10,070 ) ( 7,742 ) (23) 13,098

Liability for unrecognized tax benefits 13,420 — — — 13,420

Long-term leases 25,728 — ( 2,263 ) ( 2,263 ) (21) 23,465

Pension, postretirement, and other long-term liabilities 71,898 — 3,467 3,467 (24) 75,365

Total liabilities not subject to compromise 1,326,506 12,418 ( 26,929 ) ( 24,601 ) 1,314,323

Liabilities subject to compromise

Debt subject to compromise 635,686 ( 635,686 ) (9) — — —

Accrued interest on debt subject to compromise 26,156 ( 26,156 ) (9) — — —

Total liabilities subject to compromise 661,842 ( 661,842 ) — — —

Total liabilities 1,988,348 ( 649,424 ) ( 26,929 ) ( 24,601 ) 1,314,323

Stockholders’ equity

Common Stock— no par value:

Predecessor common stock (shares) 9,976 ( 9,976 ) — — —

Successor common stock (shares) — 25,000 — — 25,000

Predecessor additional paid-in capital 468,147 ( 468,147 ) (10) — — —

Successor additional paid-in capital — 391,402 (11) — ( 313 ) 391,089

Retained deficit ( 644,250 ) 728,160 (12) ( 83,910 ) ( 83,910 ) (25) —

Accumulated other comprehensive loss ( 54,484 ) — 54,484 54,484 (26) —

Total stockholders’ equity (deficit) of Pyxus International, Inc.

( 230,587 ) 651,415 ( 29,426 ) ( 29,739 ) 391,089

Noncontrolling interests ( 80 ) 4,359 80 ( 166 ) 4,113

Total stockholders’ equity (deficit) ( 230,667 ) 655,774 ( 29,346 ) ( 29,905 ) 395,202

Total liabilities and stockholders’ equity $ 1,757,681 $ 6,350 $ ( 56,275 ) $ ( 54,506 ) $ 1,709,525

(1) The following summarizes the change in cash and cash equivalents:

Proceeds from ABL Credit Facility, net of debt issuance costs $ 26,861

Repayment of DIP Facility ( 213,418 )

Proceeds from Term Loan Credit Facility 213,418

Proceeds from 10.0 % first lien notes

Repayment of 8.5 % first lien notes

Payment to fund professional fee escrow account ( 21,500 )

Payment of other professional and administrative fees ( 11,828 )

Payment of accrued interest on DIP Facility ( 494 )

Payment to holders of Predecessor second lien notes that elected the cash option ( 1,199 )

Payment to holders of Predecessor common stock ( 1,000 )

Payment of accrued interest on prepetition Predecessor first lien notes ( 9,129 )

(2) Represents the funding of an escrow account for professional fees associated with the Chapter 11 Cases.

(3) Represents the capitalization of debt issuance costs related to the ABL Credit Facility.

(4) Represents the conversion of the DIP Facility that was exchanged for the Term Loans, and accordingly reclassified to long-term debt.

(5) Reflects the recognition of payables for professional fees to be paid subsequent to the Company's emergence from Chapter 11 Cases.

(6) The following summarizes the net change in accrued expenses and other current liabilities:

Payment of accrued interest on the DIP Facility $ ( 494 )

Payment of accrued interest on the Predecessor first lien notes ( 9,129 )

Settlement of accrued backstop fee through the issuance of common stock ( 18,000 )

Reclassification of DIP Facility exit fee to long-term debt ( 6,718 )

Recognition of accrued interest from the Effective Date to the Convenience Date 1,044

Accrual for professional fees 1,444

(7) The following summarizes the changes in long-term debt:

Draw on the ABL Credit Facility $ 30,000

Issuance of the Term Loans (1)

Conversion of redemption fee on Predecessor first lien notes to Successor Notes 5,843

Derecognition of the original issue discount and the debt issuance costs on Predecessor first lien notes 1,285

(1) Includes $ 6,718 related to the DIP Facility exit fee

(8) Represents the recognition of deferred tax liabilities as a result of the cumulative tax impact of the reorganization adjustments herein.

(9) Represents the settlement of liabilities subject to compromise in accordance with the Plan, which resulted in a gain on the discharge of the Predecessor second lien notes as follows:

Debt subject to compromise $ 635,686

Accrued interest on debt subject to compromise 26,156

Total second lien notes discharged 661,842

Payment to holders of second lien notes electing cash option ( 1,199 )

Value of common stock issued to holders of second lien notes ( 198,339 )

Gain on discharge of second lien notes $ 462,304

(10) Represents the cancellation of Predecessor common stock.

(11) The changes in Successor additional paid-in capital were as follows:

Value of Successor common stock, second lien notes $ 198,339

Value of Successor common stock, other 193,063

(12) Represents $ 260,013 of cumulative impact to Predecessor retained deficit as a result of the reorganization adjustments described above and $ 468,147 for the elimination of Predecessor common stock.

(13) Represents fair value adjustments to the Company's equity method investments.

(14) Represents reorganization value in excess of value allocable to tangible and intangible assets.

(15) Represents the fair value adjustments to recognize the customer relationships, licenses, technology (inclusive of patents and know how), trade names, and internally developed software intangible assets.

(16) Represents the recognition of deferred tax assets as a result of the cumulative tax impact of the fresh start adjustments herein.

(17) Represents an adjustment to pension assets of ($ 352 ), partially offset by other adjustments of $ 42 .

(18) Represents the fair value adjustments to right-of-use lease assets.

(19) Represents the following fair value adjustments to property, plant, and equipment, net:

Historical Value Fair Value

Adjustment Successor

Land $ 33,562 $ ( 104 ) $ 33,458

Buildings 259,255 ( 195,797 ) 63,458

Machinery and equipment 198,708 ( 122,151 ) 76,557

Total 491,525 ( 318,052 ) 173,473

Accumulated Depreciation ( 192,232 ) 192,232 —

Total property, plant, and equipment, net $ 299,293 $ ( 125,820 ) $ 173,473

(20) Represents the revaluation of the current pension liability of ($ 1,800 ), partially offset by an adjustment to financing leases of $ 8 .

(21) Represents the Company's recalculation of lease obligations using a higher incremental borrowing rate applicable upon emergence from Chapter 11 Cases and commensurate with the new capital structure.

(22) Represents the fair value adjustment to the first lien notes.

(23) Represents the adjustment of deferred tax liabilities as a result of the cumulative tax impact of the fresh start valuation adjustments herein.

(24) Represents the recalculation of the present value of the Company's pension liability.

(25) Represents the cumulative impact of the remeasurement of assets and liabilities from fresh start reporting, $ 7,631 of tax effect of reorganization items, and the elimination of Predecessor's accumulated other comprehensive losses for the five months ended August 31, 2020.

(26) Represents the derecognition of accumulated other comprehensive loss as a result of reorganization pension adjustments, and the elimination of Predecessor's foreign currency translation adjustments.

CCAA Proceeding and Deconsolidation of Subsidiaries

On January 21, 2021, Figr Norfolk Inc.

(“Figr Norfolk”) and Figr Brands, Inc.

(“Figr Brands”), which are indirect subsidiaries of the Company, and Canada’s Island Garden Inc.

(“Figr East,” and together with Figr Norfolk and Figr Brands, the “Canadian Cannabis Subsidiaries”), which, prior to its sale on June 28, 2021 was an indirect subsidiary of the Company, applied for relief from their respective creditors pursuant to Canada’s Companies’ Creditors Arrangement Act (the “CCAA”) in the Ontario Superior Court of Justice (Commercial List) (the “Canadian Court”) in Ontario, Canada as Court File No.

CV-21-00655373-00CL (the “CCAA Proceeding”).

On January 21, 2021 (the “Order Date”), upon application by the Canadian Cannabis Subsidiaries, the Canadian Court issued an order for creditor protection of the Canadian Cannabis Subsidiaries pursuant to the provisions of the CCAA and the appointment of FTI Consulting Canada Inc.

to serve as the Canadian Court-appointed monitor of the Canadian Cannabis Subsidiaries during the pendency of the CCAA Proceeding (the “Monitor”).

The order issued by the Canadian Court in the CCAA Proceeding on the Order Date included the following relief:

• approval for the Canadian Cannabis Subsidiaries to borrow under a debtor-in-possession financing facility (the “Canadian DIP Facility”) from another non-U.S.

subsidiary of Pyxus (the "DIP Lender") in an initial amount of up to Cdn.$ 8,000 , which following approval by the Canadian Court was increased to Cdn.$ 16,000 ;

• a stay of proceedings in respect of the Canadian Cannabis Subsidiaries and the directors and officers of the Canadian Cannabis Subsidiaries (the “Canadian Directors and Officers”) and the Monitor;

• the granting of super priority charges against the property of the Canadian Cannabis Subsidiaries in favor of:

(a) certain administrative professionals;

(b) the Canadian Directors and Officers;

and (c) the DIP Lender for amounts borrowed under the Canadian DIP Facility.

On January 29, 2021, the Canadian Court issued an order permitting the Canadian Cannabis Subsidiaries to initiate a sale and investment solicitation process to be conducted by the Monitor and its affiliate to solicit interest in, and opportunities for, a sale of, or investment in, all or substantially all, or one or more components, of the assets and/or the business operations of the Canadian Cannabis Subsidiaries.

On May 10, 2021, a definitive agreement for the sale of the assets of Figr Norfolk was entered into for a purchase price of Cdn.$ 5,000 .

On June 10, 2021, the Canadian Court approved the sale agreement.

The consummation of the sale under this agreement occurred on January 28, 2022.

On May 25, 2021, a definitive agreement was entered into with a separate buyer for the sale of the outstanding equity of Figr East and certain intangible assets of Figr Brands for an aggregate purchase price of Cdn.$ 24,750 .

On June 10, 2021, the Canadian Court approved the sale agreement.

On June 25, 2021, Health Canada approved the buyers of Figr East and certain intangible assets of Figr Brands.

The sale of Figr East and certain intangible assets of Figr Brands was completed on June 28, 2021.

As discussed below, the amount of recovery that the Company may receive from the sales of the assets of Figr Norfolk, the outstanding equity of Figr East, and certain intangible assets of Figr Brands will be impacted by the amount of claims against the Canadian Cannabis Subsidiaries submitted in the CCAA Proceeding and the extent to which such claims have been approved by the Canadian Court.

Canadian DIP Financing

Pursuant to the Canadian DIP Facility, the DIP Lender provided Figr Brands with secured debtor-in-possession financing to permit Figr Brands, the parent entity of Figr East and Figr Norfolk, to fund the working capital needs of the Canadian Cannabis

Subsidiaries in accordance with the cash flow projections approved by the Monitor and the DIP Lender.

These payments also funded fees and expenses to be paid to the DIP Lender, professional fees and expenses incurred by the Canadian Cannabis Subsidiaries and the Monitor in respect of the CCAA Proceeding, and such other costs and expenses of the Canadian Cannabis Subsidiaries as may be agreed to by the DIP Lender.

On July 8, 2021, the loans under the Canadian DIP Facility were fully repaid to the DIP Lender.

Deconsolidation of Subsidiaries

While the Canadian Cannabis Subsidiaries were at the time of the commencement of the CCAA Proceedings majority owned by the Company, the administration of the CCAA Proceeding, including the Canadian Court’s appointment of the Monitor and the related authority of the Monitor, including approval rights with respect to significant actions of the Canadian Cannabis Subsidiaries during the pendency of the CCAA Proceeding, resulted in the Company losing control (in accordance with U.S.

GAAP) of the Canadian Cannabis Subsidiaries at that time, and the deconsolidation of the Canadian Cannabis Subsidiaries’ assets and liabilities and elimination of their equity components from the Company’s consolidated financial statements as of January 21, 2021.

The Canadian Cannabis Subsidiaries’ financial results are included in the Company’s consolidated results through January 20, 2021, which is the day prior to the Order Date.

Prior to the deconsolidation of the Canadian Cannabis Subsidiaries, they comprised an operating segment within the Other Products and Services reportable segment.

Upon deconsolidation, the Company accounts for its investment in the Canadian Cannabis Subsidiaries using the cost method of accounting.

Prior to the deconsolidation, the carrying value of the Company's related party note receivable from the Canadian Cannabis Subsidiaries was $ 153,860 .

The Company fully impaired its equity investment in the Canadian Cannabis Subsidiaries, effective as of the Order Date, based on the Canadian Cannabis Subsidiaries carrying a retained deficit of $ 77,518 and based on offers the Company received to buy the Canadian Cannabis Subsidiaries or certain assets and the allocation of consideration among the assets to be sold, as reflected in the sales agreements approved by the Canadian Court.

Following consummation of the contemplated sales of the Canadian Cannabis Subsidiaries, and after repayment of the Canadian DIP Facility and satisfaction of administrative expenses from the CCAA Proceeding, the Company estimated recovering aggregate net cash consideration of $ 6,100 , which represents the fair value of the related party note receivable retained by the Company as of March 31, 2021.

As a result, the Company recorded a net loss of $ 70,242 for the year ended March 31, 2021 associated with the deconsolidation of the Canadian Cannabis Subsidiaries.

As of December 31, 2021, the Company's adjusted related party note receivable was $ 2,579 , which resulted in a loss on the deconsolidation of the Canadian Cannabis Subsidiaries recorded within the condensed consolidated statements of operations of $ 900 and $ 3,356 for the three and nine months ended December 31, 2021, respectively.

The amount of recovery with respect to the related party note receivable is dependent on the actual amount of administrative claims in the CCAA Proceeding, the amount of claims of unsecured creditors against the Canadian Cannabis Subsidiaries submitted in the CCAA Proceeding, and the extent to which such claims have been approved by the Canadian Court.

Related Party Relationship

The commencement of the CCAA Proceeding, the appointment of the Monitor, and the subsequent deconsolidation of the Canadian Cannabis Subsidiaries results in transactions with the Canadian Cannabis Subsidiaries no longer being eliminated in consolidation.

As such, transactions between the Company and the Canadian Cannabis Subsidiaries, during their respective period of ownership by the Company, are treated as related-party transactions.

See "Note 22.

Related Party Transactions" for transactions between the Company and the Canadian Cannabis Subsidiaries.

The new disclosure guidance was adopted prospectively and became effective for the Company on April 1, 2022.

The adoption of this new accounting standard is not expected to have a material impact on the Company's annual disclosures for fiscal year 2023.

Revenue Recognition

2 unchanged sentences

During processing, ownership remains with the customers.

For the period ended December 31, 2020, the other products and services revenue was primarily composed of revenue from the sale of legal cannabis in Canada and e-liquids product revenue.

For the period ended December 31, 2021, the other products and services revenue was primarily composed of e-liquids product revenue.

The following disaggregates sales and other operating revenues by major source:

Three months ended December 31, 2021 Three months ended December 31, 2020

Leaf - North America:

Product revenue $ 45,421 $ 46,588

Processing and other revenues 14,573 13,956

Total sales and other operating revenues 59,994 60,544

Leaf - Other Regions:

Product revenue 349,402 298,376

Processing and other revenues 16,728 12,007

Total sales and other operating revenues 366,130 310,383

Other Products and Services:

Total sales and other operating revenues 2,818 8,633

Total sales and other operating revenues $ 428,942 $ 379,560

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Leaf - North America:

Product revenue $ 175,431 $ 63,693 $ 51,211

Processing and other revenues 24,852 16,828 6,523

Total sales and other operating revenues 200,283 80,521 57,734

Leaf - Other Regions:

All Other revenue is primarily composed of revenue from the sale of e-liquids and non-tobacco agriculture product revenue.

The following disaggregates sales and other operating revenues by major source, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the condensed consolidated financial statements:

Three months ended June 30, 2022 Three months ended June 30, 2021

Product revenue $ 322,884 $ 311,741

1 unchanged sentence

Total sales and other operating revenues 340,626 329,858

Other Products and Services:

Total sales and other operating revenues 3,279 3,432

1 unchanged sentence

The following summarizes activity in the allowance for expected credit losses:

Three months ended December 31, 2021 Three months ended December 31, 2020

Balance, beginning of period $ ( 23,641 ) $ ( 15,091 )

Additions ( 251 ) ( 2,187 )

Write-offs — —

Balance, end of period ( 23,892 ) ( 17,278 )

Trade receivables 213,103 194,834

Trade receivables, net $ 189,211 $ 177,556

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Three months ended June 30, 2022 Three months ended June 30, 2021

Balance, beginning of period $ ( 24,541 ) $ ( 20,900 )

4 unchanged sentences

Trade receivables, net $ 155,976 $ 198,241

Restructuring and Asset Impairment Charges

The Company continued its focus on cost saving initiatives.

The employee separation and impairment charges are primarily related to the continued wind down of the Company's industrial hemp cannabidiol ("CBD") operations and the continued restructuring of certain leaf operations.

The following summarizes the Company's restructuring and asset impairment charges:

Three months ended December 31, 2021 Three months ended December 31, 2020

Employee separation charges $ 510 $ 4,087

Asset impairment and other non-cash charges 50 3,687

Restructuring and asset impairment charges $ 560 $ 7,774

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Employee separation charges $ 1,913 $ 5,009 $ 353

Asset impairment and other non-cash charges 5,739 3,982 213

Restructuring and asset impairment charges $ 7,652 $ 8,991 $ 566

The Company's quarterly provision for income taxes has generally been calculated using the annual effective tax rate method ("AETR method"), which applies an estimated annual effective tax rate to pre-tax income or loss.

The AETR method was used to calculate the provision for income taxes for the prior reported interim periods of the current fiscal year, for which the Company reported income tax benefits in each prior reporting period.

Due to COVID-19 pandemic-driven variability in the Company's current expectations of results of operations for the remainder of the fiscal year, as of December 31, 2021, the Company recorded its interim income tax provision using the discrete method, as allowed under ASC 740-270, Accounting for Income Taxes - Interim Reporting .

The Company utilized the discrete method, rather than the AETR method, due to significant variations in income tax expense, primarily driven by U.S.

non-deductible interest pursuant to Section 163(j) of the Internal Revenue Code, relative to projected annual pre-tax income (loss) that would have resulted in a disproportionate and unreliable

effective tax rate under the AETR method.

Using the discrete method, the Company determined current and deferred income tax expense as if the nine-month interim period of the current fiscal year was a year-end period.

The effective tax rate for the nine months ended December 31, 2021, the four months ended December 31, 2020, and the five months ended August 31, 2020 was ( 19.1 )%, 21.8 %, and 1.8 %, respectively.

For the nine months ended December 31, 2021, the four months ended December 31, 2020, and the five months ended August 31, 2020, the difference between the Company’s effective rate and the U.S.

The AETR method was used to calculate the provision for income taxes for the prior fiscal years, for which the Company reported income tax benefits in each prior reporting period.

As of June 30, 2022, the AETR method produced an unreliable estimate of the Company’s annual effective tax rate;

therefore, the Company recorded its interim income tax provision using the discrete method, as allowed under ASC 740-270, Income Taxes - Interim Reporting .

Using the discrete method, the Company determined current and deferred income tax expense as if the three-month interim period of the current fiscal year were an annual period.

The effective tax rate for the three months ended June 30, 2022 and 2021 was 4.5 % and 45.3 %, respectively.

For the three months ended June 30, 2022 and 2021, the difference between the Company’s effective rate and the U.S.

statutory rate of 21% is primarily due to the impact of net foreign exchange effects, non-deductible interest, and variations in the expected jurisdictional mix of earnings.

The change in the effective rate for the nine months ended December 31, 2021 was primarily due to improved operational results and changes in the U.S.

tax profile resulting from the Company's emergence from the Chapter 11 Cases.

(Loss) Earnings Per Share

The following summarizes the computation of earnings (loss) per share:

Three months ended December 31, 2021 Three months ended December 31, 2020

Loss Per Share

The following summarizes the computation of loss per share:

Three months ended June 30, 2022 Three months ended June 30, 2021

Basic and diluted loss per share:

3 unchanged sentences

Basic and diluted loss per share $ ( 0.59 ) $ ( 0.46 )

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Basic (loss) earnings per share:

Net (loss) income attributable to Pyxus International, Inc.

$ ( 51,289 ) $ ( 13,478 ) $ 19,037

Weighted average number of shares outstanding 25,000 25,000 9,976

Basic (loss) earnings per share $ ( 2.05 ) $ ( 0.54 ) $ 1.91

Diluted (loss) earnings per share:

Net (loss) income attributable to Pyxus International, Inc.

$ ( 51,289 ) $ ( 13,478 ) $ 19,037

Weighted average number of shares outstanding 25,000 25,000 9,976

Restricted shares issued and shares applicable to stock options and restricted stock units, net of shares assumed to be purchased from proceeds at average market price (1)

Adjusted weighted average number of shares outstanding 25,000 25,000 9,992

Diluted (loss) earnings per share $ ( 2.05 ) $ ( 0.54 ) $ 1.91

(1) Outstanding restricted shares, shares applicable to stock options, and restricted stock units are excluded because their inclusion would

have an antidilutive effect on the loss per share.

The dilutive shares would have been 0 for the nine months ended December 31, 2021.

Inventories, Net

The following summarizes the composition of inventories, net:

December 31, 2021 December 31, 2020 March 31, 2021

June 30, 2022 June 30, 2021 March 31, 2022

Processed tobacco $ 646,539 $ 584,791 $ 517,613

3 unchanged sentences

Total $ 980,070 $ 854,042 $ 749,427

(1) Represents inventory from the Other Products and Services segment.

Acquisitions and Dispositions

Acquisition of Criticality

On December 18, 2017, the Company completed a purchase of a 40.0 % interest in Criticality, a North Carolina-based industrial hemp company that was engaged in CBD extraction and other applications for industrial hemp in accordance with a pilot program authorized under the federal Agriculture Act of 2014 and applicable North Carolina law.

On April 22, 2020, the Company acquired the remaining 60.0 % of the equity in Criticality in exchange for consideration consisting of $ 5,000 cash and $ 7,450 for the settlement of the Company's note receivable from Criticality, subject to certain post-closing adjustments.

The acquisition of Criticality was a business combination achieved in stages, which required the Company to remeasure its previously held equity interest in Criticality at its acquisition date fair value.

This remeasurement resulted in a loss of approximately $ 2,667 being recorded in other income (expense), net within the condensed consolidated statements of operations for the five months ended August 31, 2020.

The assets and liabilities were recorded at their fair value.

Following the acquisition, the Company recorded certain post-closing purchase price adjustments.

The intent of the acquisition was to allow the Company to expand its industrial hemp production and product portfolio.

The following summarizes the fair values of the assets acquired and liabilities assumed as of April 22, 2020:

Cash and cash equivalents $ 195

Accounts receivable 1,528

Advances to suppliers 1,043

Inventories 3,823

Other current assets 181

Property, plant, and equipment 5,060

Goodwill 6,120

Total assets acquired 17,950

Accounts payable 1,654

Notes payable 7,450

Other current liabilities 513

Total liabilities 9,617

Fair value of equity interest $ 8,333

The following summarizes the revenue, operating loss, and net loss for Criticality as well as the resulting impact to basic and diluted loss per share:

Successor Successor Predecessor

Three months ended December 31, 2020 Four months ended December 31, 2020 Five months ended August 31, 2020

Revenue 16 19 —

Operating loss ( 3,619 ) ( 4,750 ) ( 3,117 )

Net loss ( 9,897 ) ( 11,067 ) ( 3,317 )

Impact to loss per share:

Basic and Diluted ( 0.40 ) ( 0.44 ) ( 0.33 )

In December 2020, the Company commenced actions to exit operations of the industrial hemp businesses, including the production and sale of products containing extracts of industrial hemp, including CBD products, by Criticality.

Disposition of Humble Juice Co., LLC

On November 23, 2021, the Company disposed of its ownership interests in Humble Juice Co., LLC ("Humble Juice"), a manufacturer and distributor of flavored e-liquids, in exchange for royalties on future revenue, which was recorded as other assets in the condensed consolidated balance sheet as of December 31, 2021.

Humble Juice's financial results are included in the Company's consolidated results through the transaction date within the Other Products and Services segment.

On the date of the transaction, Humble Juice's assets, liabilities, and equity components were eliminated from the Company's condensed consolidated financial statements.

The Company recognized a loss on the disposition of Humble Juice of $ 5,374 for the three months ended December 31, 2021.

CCAA Proceeding and Deconsolidation of Subsidiaries

On January 21, 2021, Figr Norfolk Inc.

("Figr Norfolk"), Figr Brands, Inc.

("Figr Brands"), and Canada’s Island Garden Inc.

("Figr East," and together with Figr Norfolk and Figr Brands, the "Canadian Cannabis Subsidiaries"), which, prior to their sale, were indirect subsidiaries of the Company, applied for relief from their respective creditors pursuant to Canada’s Companies’ Creditors Arrangement Act (the "CCAA") in the Ontario Superior Court of Justice (Commercial List) (the "Canadian Court") in Ontario, Canada as Court File No.

CV-21-00655373-00CL (the "CCAA Proceeding").

On January 21, 2021 (the "Order Date"), upon application by the Canadian Cannabis Subsidiaries, the Canadian Court issued an order for creditor protection of the Canadian Cannabis Subsidiaries pursuant to the provisions of the CCAA and the appointment of FTI Consulting Canada Inc.

to serve as the Canadian Court-appointed monitor of the Canadian Cannabis Subsidiaries during the pendency of the CCAA Proceeding (the "Monitor").

The administration of the CCAA Proceeding, including the Canadian Court's appointment of the Monitor and the related authority of the Monitor, including approval rights with respect to significant actions of the Canadian Cannabis Subsidiaries during the pendency of the CCAA Proceeding, resulted in the Company losing control (in accordance with U.S.

GAAP) of the Canadian Cannabis Subsidiaries at that time, and the deconsolidation on January 20, 2021 of the Canadian cannabis Subsidiaries' assets and liabilities and elimination of their equity components from the Company's consolidated financial statements as of January 21, 2021.

Prior to the deconsolidation of the Canadian Cannabis Subsidiaries, they comprised an operating segment within the Other Products and Services reportable segment, which upon the Company's reevaluation of operating and reportable segments effective during the fourth quarter of the year ended March 31, 2022 is presented in the All Other category.

Upon deconsolidation, the Company accounts for its investments in the Canadian Cannabis Subsidiaries using the cost method of accounting.

On January 28, 2022, a sale of the assets of Figr Norfolk for a purchase price of Cdn.$ 5,000 was completed.

On June 28, 2021, a sale of the outstanding equity of Figr East and certain intangible assets of Figr Brands for an aggregate purchase price of Cdn.$ 24,750 was completed.

On February 2, 2022, Figr Norfolk and Figr Brands obtained approval to make cash distributions to their creditors pursuant to a distribution protocol approved by the Canadian Court.

In the three months ended June 30, 2022, the Company received $ 2,011 in settlement of its debt claims with respect to the Canadian Cannabis Subsidiaries and did not receive any recovery with respect to its equity interest in the Canadian Cannabis Subsidiaries.

On April 21, 2022, Figr Norfolk and Figr Brands obtained approval from the Canadian Court to terminate the CCAA Proceedings and commence bankruptcy proceedings under Canada's Bankruptcy and Insolvency Act (the "BIA Proceedings") to complete certain corporate and tax-related wind-up activities.

On May 13, 2022, Figr Norfolk and Figr Brands commenced the BIA Proceedings.

On June 13, 2022, the CCAA Proceedings were formally terminated.

Related Party Relationship

As such, transactions between the Company and the Canadian Cannabis Subsidiaries, including loans under the debtor-in-possession financing facility (the "Canadian DIP Facility") from another non-U.S.

subsidiary of Pyxus (the "DIP Lender") provided during the pendency of the CCAA Proceedings, which were fully repaid on July 8, 2021, are treated as related party transactions.

See " Note 18.

Related Party Transactions " for transactions between the Company and the Canadian Cannabis Subsidiaries.

Equity Method Investments

The following summarizes the Company's equity method investments as of December 31, 2021:

Location Primary Purpose The Company's Ownership Percentage Basis Difference (1)

The following summarizes the Company's equity method investments as of June 30, 2022:

Investee Name Location Primary Purpose The Company's Ownership Percentage Basis Difference

Adams International Ltd.

8 unchanged sentences

Siam Tobacco Export Company Thailand purchase and process tobacco 49 % ( 6,098 )

(1) The basis difference for the Company's equity method investments is primarily due to $ 30,531 of fair value adjustments from fresh start reporting that were recorded in the fiscal year-ended March 31, 2021.

The following summarizes financial information for these equity method investments:

Three months ended December 31, 2021 Three months ended December 31, 2020

Operations statement:

Sales $ 122,710 $ 121,873

Gross profit 28,995 30,154

Net income 13,421 16,577

Company's dividends received — 317

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Operations statement:

Three months ended June 30, 2022 Three months ended June 30, 2021

Sales $ 69,382 $ 31,432

2 unchanged sentences

Company's dividends received 11,522 8,848

December 31, 2021 December 31, 2020 March 31, 2021

Balance sheet:

June 30, 2022 June 30, 2021 March 31, 2022

Current assets $ 441,973 $ 290,750 $ 375,015

6 unchanged sentences

The following summarizes the Company's financial relationships with its unconsolidated variable interest entities:

December 31, 2021 December 31, 2020 March 31, 2021

June 30, 2022 June 30, 2021 March 31, 2022

Investments in variable interest entities $ 80,446 $ 78,903 $ 88,118

1 unchanged sentence

Guaranteed amounts to variable interest entities (not to exceed) 64,610 55,987 55,884

Goodwill and Other Intangible Assets, Net

Other Intangible Assets, Net

The following summarizes the changes in the Company's goodwill and other intangible assets, net:

Nine months ended December 31, 2021

Weighted Average Remaining Useful Life Beginning Gross Carrying Amount Additions Accumulated Amortization (1)

Disposition of Humble Juice (2)

Impairment (3)

Ending Intangible Assets, Net

Three months ended June 30, 2022

Weighted Average Remaining Useful Life Beginning Carrying Amount, Net Amortization Expense Ending Intangible Assets, Net

Intangibles subject to amortization:

2 unchanged sentences

Trade names 12.17 years 10,022 ( 202 ) 9,820

Intangibles not subject to amortization:

Goodwill 36,853 — — ( 4,667 ) ( 372 ) 31,814

Total $ 45,061 $ ( 3,009 ) $ 42,052

(1) Amortization expense across intangible asset classes for the nine months ended December 31, 2021 was $ 4,192 .

(2) See “ Note 11.

Acquisitions and Dispositions ” for additional information.

(3) The Company’s goodwill represents reorganization value in excess of value allocable to tangible and intangible assets as of August 31, 2020.

The impairment is related to the continued restructuring of certain leaf operations.

Seven months ended March 31, 2021 (3)

Weighted Average Remaining Useful Life Beginning Gross Carrying Amount Additions Accumulated Amortization (1)

Deconsolidation of Canadian Cannabis Subsidiaries Impairment (2)

Ending Intangible Assets, Net

Year ended March 31, 2022

Weighted Average Remaining Useful Life Beginning Carrying Amount, Net Additions Amortization Expense Disposition of Humble Juice Impairment Ending Intangible Assets, Net

Intangibles subject to amortization:

1 unchanged sentence

Technology 5.80 years 12,858 840 ( 2,227 ) — — 11,471

Licenses 0.00 years 19,000 — ( 924 ) ( 18,076 ) — —

Trade names 12.42 years 10,829 — ( 807 ) — — 10,022

2 unchanged sentences

Total $ 88,270 $ 840 $ ( 5,461 ) $ ( 6,402 ) $ ( 32,186 ) $ 45,061

(1) Amortization expense across intangible asset classes for the seven months ended March 31, 2021 was $ 5,113 .

(2) The Company’s goodwill represents reorganization value in excess of value allocable to tangible and intangible assets as of August 31, 2020.

The impairment is related to the Canadian Cannabis Subsidiaries filing for relief from their respective creditors via the CCAA Proceeding in January 2021.

(3) In connection with the Company's emergence from the Chapter 11 Cases on August 24, 2020, a series of transactions were completed pursuant to which the business assets and operations of Old Pyxus vested in the Company.

See “ Note 3.

Emergence from Voluntary Reorganization under Chapter 11 ” for additional information.

Debt Arrangements

The following summarizes debt and notes payable:

December 31, December 31, March 31,

June 30, June 30, March 31,

(in thousands) Interest Rate 2022 2021 2022

2 unchanged sentences

$ 90,000 $ — $ 90,000

Exit ABL Credit Facility 5.8 % (1)

DDTL Facility (2)

109,751 117,353 107,832

Senior secured notes:

1 unchanged sentence

10.0 % 271,678 268,168 270,762

Term Loan Credit Facility (4)

Exit Term Loan Credit Facility (4)

220,518 216,533 219,500

5 unchanged sentences

Short-term (5)

$ 545,224 $ 403,792 $ 378,612

Current portion of long-term debt $ 13,781 $ 2,686 $ 107,856

2 unchanged sentences

Letters of credit $ 14,430 $ 4,804 $ 9,038

(1) Weighted average rate for the trailing twelve months ended December 31, 2021.

As the DDTL Facility has not been outstanding for a trailing twelve-month period, the interest rate is the weighted average rate from inception through December 31, 2021.

(1) Weighted average rate for the trailing twelve months ended June 30, 2022.

As the ABL Credit Facility has not been outstanding for a trailing twelve-month period, the interest rate is the weighted average rate from inception through June 30, 2022.

(2) Balance of $ 109,751 is net of original issue discount of $ 499 .

Total repayment will be $ 110,250 , which includes an estimated $ 5,250 exit fee payable upon repayment.

Total repayment will be $ 110,250 , which includes a $ 5,250 exit fee payable upon repayment.

(3) Balance of $ 271,678 is net of original issue discount of $ 9,166 .

Total repayment will be $ 280,844 .

(4) Upon emergence from the Chapter 11 Cases on the Effective Date, the DIP Facility entered into at the Petition Date converted into the Term Loan Credit Facility.

(4) The aggregate balance of the Term Loan Credit Facility of $ 220,518 includes $ 5,436 of accrued paid-in-kind interest.

The 9.6 % interest rate does not include the paid-in-kind interest which is (a) 1.0 % per annum from and after the first anniversary of the Effective Date until the second anniversary of the Effective Date, (b) 2.0 % per annum from and after the second anniversary of the Effective Date until the third anniversary of the Effective Date, (c) 3.0 % per annum from and after the third anniversary of the Effective Date until the fourth anniversary of the Effective Date, and (d) from and after the fourth anniversary of the Effective Date, 4.0 % per annum.

(5) Primarily foreign seasonal lines of credit.

ABL Credit Facility

On the Effective Date, Pyxus Holdings entered into the Exit ABL Credit Agreement to establish the ABL Credit Facility.

The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to an initial maximum principal amount o f $ 75,000 , subject to certain limitations.

A detailed description of the Exit ABL Credit Agreement and ABL Credit Facility is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

At December 31, 2021, Pyxus Holdings was in compliance with the covenants under the Exit ABL Credit Agreement.

At December 31, 2021, $ 22,500 was available for borrowing under the ABL Credit Facility, after reducing availability by the aggregate borrowings under the ABL Credit Facility of $ 52,500 outstanding on that date.

Term Loan Credit Facility

On the Effective Date, Pyxus Holdings entered into the Term Loan Credit Agreement, dated as of August 24, 2020 by and among, amongst others, Pyxus Holdings, certain lenders party thereto and Alter Domus (US) LLC, as administrative agent and collateral agent to establish the Term Loan Credit Facility in an aggregate principal amount of approximately $ 213,418 .

The aggregate principal amount of loans outstanding under Debtors’ debtor-in-possession financing facility, and related fees, was converted into, or otherwise satisfied with the proceeds of, the Term Loan Credit Facility.

A detailed description of the Term Loan Credit Agreement and Term Loan Credit Facility is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

At December 31, 2021, Pyxus Holdings was in compliance with the covenants under the Term Loan Credit Agreement.

Senior Secured First Lien Notes

On the Effective Date, Pyxus Holdings issued approximately $ 280,844 in aggregate principal amount of the Notes to holders of Allowed First Lien Notes Claims (as defined in the Plan) pursuant to the Indenture dated as of the Effective Date among Pyxus Holdings, the initial guarantors party thereto, and Wilmington Trust, National Association, as trustee and collateral agent.

A detailed description of the Notes and the Indenture is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021.

At December 31, 2021, Pyxus Holdings was in compliance with the covenants under the Indenture.

On February 8, 2022, Pyxus Holdings, certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the "Borrowers"), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc., as parent guarantors, entered into an ABL Credit Agreement (the "ABL Credit Agreement"), dated as of February 8, 2022, by and among Pyxus Holdings, as Borrower Agent, the Borrowers and parent guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as Administrative Agent and Collateral Agent, to establish an asset-based revolving credit facility (the "ABL Credit Facility"), the proceeds of which may be used to refinance existing senior bank debt, pay fees and expenses related to the ABL Credit Facility, partially fund capital expenditures, and provide for the ongoing working capital needs of the Borrowers.

The ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to an initial maximum principal amount of $ 100,000 , subject to the limitations described below in this paragraph.

The ABL Credit Facility includes a $ 20,000 uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the ABL Credit Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility not to exceed a maximum principal amount of $ 120,000 .

A detailed description of the ABL Credit Agreement is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

At June 30, 2022, Pyxus Holdings was in compliance with the covenants under the ABL Credit Agreement.

Exit ABL Credit Facility

On August 24, 2020, Pyxus Holdings entered into the Exit ABL Credit Agreement to establish the Exit ABL Credit Facility.

The Exit ABL Credit Facility may be used for revolving credit loans and letters of credit from time to time up to an initial maximum principal amount o f $ 75,000 , subject to certain limitations.

On February 8, 2022, Pyxus Holdings terminated the Exit ABL Credit Agreement and repaid $ 56,500 outstanding thereunder with proceeds from the initial borrowing under the ABL Credit Facility.

DDTL Facility

1 unchanged sentence

("Intabex"), an indirect wholly owned subsidiary of the Company, entered into a Term Loan Credit Agreement (the "DDTL Facility Credit Agreement"), dated as of April 23, 2021 (the "Closing Date"), by and among (i) Intabex, as borrower, (ii) the Company, Pyxus Parent, Inc., Pyxus Holdings, Inc., Alliance One International, LLC, Alliance One International Holdings, Ltd, as guarantors (collectively, the "Parent Guarantors"), (iii) certain funds managed by Glendon Capital Management, L.P.

and Monarch Alternative Capital LP, as lenders (collectively and, together with any other lender that is or becomes a party thereto as a lender, the “DDTL Facility Lenders”), and (iv) Alter Domus (US) LLC, as administrative agent and collateral agent.

and Monarch Alternative Capital LP, as lenders (collectively and, together with any other lender that is or becomes a party thereto as a lender, the "DDTL Facility Lenders"), and (iv) Alter Domus (US) LLC, as administrative agent and collateral agent (the "DDTL Agent").

The DDTL Facility Credit Agreement established a $ 120,000 delayed-draw term loan credit facility (the "DDTL Facility") under which the full amount has been drawn (the "DDTL Loans").

After that date, a fund managed by Owl Creek Asset Management, L.P.

became a lender under the DDTL Facility.

The proceeds of the DDTL Loans were used to provide working capital and for other general corporate purposes of Intabex, the Guarantors (as defined below) and their subsidiaries.

The DDTL Facility and all DDTL Loans made thereunder mature on July 31, 2022.

The DDTL Loans may be prepaid by Intabex at any time without premium or penalty other than the Exit Fee described below and, in the case of any prepayment of LIBOR loans, subject to customary breakage.

At December 31, 2021, the aggregate principal amount outstanding was $ 106,013 , net of original issue discount of $ 4,237 , which includes an estimated $ 5,250 exit fee payable upon repayment.

Amounts prepaid or repaid in respect of DDTL Loans may not be reborrowed under the DDTL Facility.

Interest on the aggregate principal amount of outstanding DDTL Loans accrues at an annual rate of LIBOR plus 9.00 %, subject to a LIBOR floor of 1.50 %, for LIBOR loans or, for loans that are not LIBOR loans, at an annual rate of an alternative base rate (as specified in the DDTL Facility Credit Agreement) plus 8.00 %.

Interest is to be paid in arrears in cash upon prepayment, acceleration, maturity, and on the last day of each interest period (and every three months in the case of interest periods in excess of three months) for LIBOR loans and on the last day of each calendar month for loans that are not LIBOR loans.

Pursuant to the DDTL Facility Credit Agreement, the DDTL Facility Lenders received a non-refundable commitment fee equal to 2.00 % of the aggregate commitments under the DDTL Facility, paid in cash in full on the Closing Date and netted from the proceeds of the DDTL Loan borrowed on the Closing Date.

The DDTL Facility Credit Agreement provides for the payment by Intabex to the DDTL Facility Lenders of a non-refundable exit fee (the “Exit Fee”) in the amounts set forth in the table below in respect of any DDTL Loans repaid (whether prepaid voluntarily or paid following acceleration or at maturity).

The Exit Fee is deemed to have been earned on the Closing Date, and is due and payable in cash on each date of repayment or termination, as applicable, in respect of the DDTL Loans or commitments repaid or terminated on such date, as applicable.

Loan Repayment Date Exit Fee

On or before September 30, 2021 1.00 %

After September 30, 2021 and on or before December 31, 2021 2.50 %

After December 31, 2021 and on or before March 31, 2022 3.50 %

After March 31, 2022 5.00 %

The obligations of Intabex under the DDTL Facility Credit Agreement (and certain related obligations) are (a) guaranteed by the Parent Guarantors and Alliance One International Tabak B.V., an indirect subsidiary of the Company, and each of the Company’s domestic and foreign subsidiaries that is or becomes a guarantor of borrowings under the Term Loan Credit Agreement (which subsidiaries are referred to collectively, together with the Parent Guarantors, as the "Guarantors"), and (b) are secured by the pledge of all of the outstanding equity interests of (i) Alliance One Brasil Exportadora de Tabacos Ltda.

("AO Brazil"), which principally operates the Company’s leaf tobacco operations in Brazil, and (ii) Alliance One International Tabak B.V., which owns a 0.001 % interest of AO Brazil.

Affirmative and Restrictive Covenants

The DDTL Facility Credit Agreement contains representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults applicable to the Company and its subsidiaries similar to those included in the Exit Term Loan Credit Agreement, including covenants that limit the Company’s ability to, among other things:

• incur additional indebtedness or issue disqualified stock or preferred stock;

• make certain investments and other restricted payments;

• enter into limitations on its ability to pay dividends, make loans or otherwise transfer assets to its immediate parent entity or to its subsidiaries;

• sell certain assets;

• create liens;

• consolidate, merge, sell or otherwise dispose of all or substantially all of its assets;

• enter into transactions with affiliates;

• engage directly or indirectly in any business other than the businesses engaged in by it and its subsidiaries are currently engaged.

In addition, the DDTL Facility Credit Agreement includes a customary “passive holding company” covenant that contains certain additional restrictions on Intabex and its subsidiaries’ activities and requirements for Intabex to provide to the DDTL Facility Lenders certain periodic financial and operating reports for the Guarantors and their subsidiaries on a consolidated basis.

At December 31, 2021, Intabex and each Guarantor was in compliance with the covenants under the DDTL Facility Credit Agreement.

Related Party Transaction

Based on a Schedule 13D filed with the SEC on September 3, 2020 by Glendon Capital Management, L.P., Glendon Opportunities Fund, L.P.

and Glendon Opportunities Fund II, L.P., Glendon Capital Management, L.P.

reported beneficial ownership of 7,939 shares of the Company’s common stock, representing approximately 31.8 % of the outstanding shares of the Company’s common stock.

Based on a Schedule 13D filed with the SEC on September 3, 2020 by Monarch Alternative Capital LP, MDRA GP LP and Monarch GP LLC, Monarch Alternative Capital LP reported beneficial ownership of 6,033 shares of the Company’s common stock, representing approximately 24.1 % of the outstanding shares of the Company’s common stock.

A detailed description of the DDTL Facility Credit Agreement is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

At June 30, 2022, Intabex and each Guarantor was in compliance with the covenants under the DDTL Facility Credit Agreement.

As described below, the DDTL Facility Credit Agreement was amended and restated on July 28, 2022.

The portion of the DDTL Facility that was refinanced on a long-term basis, effective July 28, 2022, is classified as noncurrent and recorded in Long-term debt within the condensed consolidated balance sheet as of June 30, 2022.

Amendment and Restatement of DDTL Facility Credit Agreement

On June 2, 2022, Intabex, the Company and the Guarantors entered into an Amendment and Restatement Agreement dated as of June 2, 2022 (the "Amendment and Restatement Agreement") with the DDTL Facility Lenders and the DDTL Agent to, subject to the satisfaction of customary closing conditions, amend and restate the DDTL Facility Credit Agreement as set forth in the form of an Amended and Restated Term Loan Credit Agreement (the "Amended Credit Agreement"), appended to the Amendment and Restatement Agreement, among (i) Intabex, as borrower, (ii) the Company and the Guarantors, (iii) the DDTL Facility Lenders and any other lender that becomes a party thereto (collectively, the "Term Loan Lenders"), and (iv) the DDTL Agent, as administrative agent and collateral agent.

On July 28, 2022, following the satisfaction of the conditions to effectiveness specified in the Amendment and Restatement Agreement, the amendment and restatement of the DDTL Facility Credit Agreement by the Amended Credit Agreement became effective.

See " Note 20.

Subsequent Events " for additional information.

The Amended Credit Agreement establishes a $ 100,000 term loan credit facility (the "Term Loan Facility") and requires that Intabex use the net proceeds of the loans made thereunder (the "Term Loans") and other funds to repay in full its obligations under the DDTL Facility Credit Agreement, including the outstanding principal of, and accrued and unpaid interest on, borrowings under the DDTL Facility on the Amendment and Restatement Effectiveness Date and the payment of fees and expenses incurred in connection with repaying such borrowings and entering into the Amended Credit Agreement.

The Term Loans mature on December 2, 2023.

The Amended Credit Agreement provides that the Term Loans may be prepaid at any time, with a 2.0 % fee due with respect to any principal payment made after the one-year anniversary of the Amendment and Restatement Effectiveness Date, including a payment made at maturity.

The Amended Credit Agreement further provides that amounts of principal that are prepaid may not be reborrowed under the Term Loan Facility.

Under the Amended Credit Agreement, interest on the outstanding principal amount of the Term Loans accrues at an annual rate of SOFR plus 7.5 %, subject to a SOFR floor of 1.0 %, for "SOFR loans" or, for loans that are not SOFR loans, at an annual rate of an alternate base rate (as specified in the Amended Credit Agreement and subject to a specified floor) plus 6.5 %.

Interest is to be paid in arrears in cash upon prepayment, acceleration, maturity, and on the last day of each interest period (which may be one, three or six months) for SOFR loans and on the last day of each calendar quarter for loans that are not SOFR loans.

Pursuant to the Amended Credit Agreement, the Term Loan Lenders received on the Amendment and Restatement Effectiveness Date a non-refundable commitment fee equal to 3.0 % of the aggregate commitments under the Term Loan Facility and a closing fee equal to 1.0 % of the aggregate commitments under the Term Loan Facility, as original issue discount.

Under the Amended Credit Agreement, the obligations of Intabex under the Amended Credit Agreement (and certain related obligations) continue to be guaranteed and secured by the same guarantors of, and the same collateral securing, Intabex’s obligations under the DDTL Facility Credit Agreement.

Related Party Transactions

Based on a Schedule 13D filed with the SEC on September 3, 2020 by Glendon Capital Management, L.P.

(the "Glendon Investor"), Glendon Opportunities Fund, L.P.

and Glendon Opportunities Fund II, L.P., the Glendon Investor reported beneficial ownership of 7,939 shares of the Company’s common stock, representing approximately 31.8 % of the outstanding shares of the Company’s common stock.

Based on Form 4 filed with the SEC on July 15, 2021, as well as a Schedule 13D filed with the SEC on September 3, 2020 by Monarch Alternative Capital LP (the "Monarch Investor"), MDRA GP LP and Monarch GP LLC, the Monarch Investor reported beneficial ownership of 6,140 shares of the Company’s common stock, representing approximately 24.6 % of the outstanding shares of the Company’s common stock.

Based on a Schedule 13G/A filed with the SEC on February 10, 2022 by Owl Creek Asset Management, L.P.

and Jeffrey A.

Altman, Owl Creek Asset Management, L.P.

is the investment manager of certain funds and reported beneficial ownership of 2,405 shares of the Company’s common stock on December 31, 2021, representing approximately 9.6 % of the outstanding shares of the Company’s common stock.

Pursuant to the Shareholders Agreement, Holly Kim and Patrick Fallon were designated to serve as directors of Pyxus and each continues to serve as a director of Pyxus.

1 unchanged sentence

Fallon is a Managing Principal at Monarch Alternative Capital LP.

The DDTL Facility Credit Agreement, any and all borrowings thereunder and the guaranty transactions described above were approved, and determined to be on terms and conditions at least as favorable to the Company and its subsidiaries as could reasonably have been obtained in a comparable arm’s-length transaction with an unaffiliated party, by a majority of the disinterested members of the Board of Directors of Pyxus.

African Seasonal Lines of Credit

On August 13, 2020, certain then subsidiaries of Old Pyxus, which are now subsidiaries of the Company, Alliance One International Holdings, Ltd.

(“AOI Holdings”) and the subsidiaries in Kenya, Malawi, Tanzania, Uganda, and Zambia (collectively, the “African Subsidiaries”) entered into an Amendment and Restatement Agreement (the “Initial TDB Facility Agreement”) with Eastern and Southern African Trade and Development Bank (“TDB”).

On August 24, 2020, AOI Holdings, the African Subsidiaries, the Company, Pyxus Parent, Inc., Pyxus Holdings, and TDB entered into a Second Amendment and Restatement Agreement (the “TDB Facility Agreement”) to amend and restate the Initial TDB Facility Agreement to add the Company, Pyxus Parent, Inc., and Pyxus Holdings as guarantors thereunder and to otherwise amend provisions thereof to permit the consummation of the transactions contemplated by the Plan.

The TDB Facility Agreement sets forth the terms that govern the foreign seasonal lines of credit of each of the African Subsidiaries with TDB and supersedes the prior terms in effect.

These lines of credit provide borrowings to fund the purchase of leaf tobacco in the respective jurisdictions to be repaid upon the sale of that tobacco.

The original aggregate maximum borrowing availability under these separate existing foreign seasonal lines of credit was $ 255,000 , and the aggregate borrowings were $ 240,485 as of August 13, 2020.

Subject to certain conditions, the TDB Facility Agreement increased the maximum aggregate borrowing capacity to $ 285,000 , less the amount of outstanding loans borrowed under the existing foreign seasonal lines of credit with TDB.

Loans under the TDB Facility Agreement bear interest at LIBOR plus 6 %.

On June 24, 2021, the Company, and certain of its subsidiaries, including the African Subsidiaries, entered into an Amendment Agreement (the “Amendment Agreement”) with TDB to amend the TDB Facility Agreement, which governs the terms of the separate foreign seasonal lines of credit of each of the African Subsidiaries with TDB.

The Amendment Agreement became effective on June 28, 2021 and amended the TDB Facility Agreement as follows:

• It extended the term of the separate lines of credit of each of the Company’s subsidiaries in Malawi, Tanzania, and Zambia to June 25, 2022;

• It decreased the lending commitment with respect to the line of credit of the Company’s Malawi subsidiary from $ 120,000 to $ 80,000 , effective from and including June 28, 2021;

• It includes provisions allowing for an increase in the lending commitment with respect to the line of credit of the Company’s Tanzania subsidiary from $ 70,000 to $ 85,000 , subject to the satisfaction of certain documentation requirements;

• It terminated the separate lines of credit of the Companies’ subsidiaries in Kenya and Uganda, effective from and including June 30, 2021 (with outstanding borrowings thereunder to be repaid by June 30, 2021);

• It required the Company and such subsidiaries to enter into an agreement to amend and restate the TDB Agreement by August 13, 2021 to reflect items specified in the Amendment Agreement.

On August 12, 2021, the Company and certain subsidiaries of the Company, including the Company’s subsidiaries in Malawi, Tanzania, and Zambia (the “African Subsidiary Borrowers”), entered into the Third Amendment and Restatement Agreement (the “Restated TDB Agreement”) with TDB to amend and restate the Second Amendment and Restatement Agreement dated August 24, 2020, as amended by an amendment letter dated December 30, 2020, an amendment letter dated February 19, 2021 and the Amendment Agreement dated as of June 24, 2021.

The DDTL Facility Credit Agreement, the Amendment and Restatement Agreement, the Amended Credit Agreement and any and all borrowings under the DDTL Facility Credit Agreement and the Amended Credit Agreement and the guaranty transactions described above were approved, and determined to be on terms and conditions at least as favorable to the Company and its subsidiaries as could reasonably have been obtained in a comparable arm’s-length transaction with an unaffiliated party, by a majority of the disinterested members of the Board of Directors of Pyxus.

Senior Secured First Lien Notes

On the August 24, 2020, Pyxus Holdings issued approximately $ 280,844 in aggregate principal amount of the Notes to holders of Allowed First Lien Notes Claims pursuant to the Indenture dated as of August 24, 2020 (the "Indenture") among Pyxus Holdings, the initial guarantors party thereto, and Wilmington Trust, National Association, as trustee and collateral agent.

A detailed description of the Notes and the Indenture is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

At June 30, 2022, Pyxus Holdings was in compliance with the covenants under the Indenture.

Exit Term Loan Credit Facility

On August 24, 2020, Pyxus Holdings entered into the Exit Term Loan Credit Agreement by and among, amongst others, Pyxus Holdings, certain lenders party thereto and Alter Domus (US) LLC, as administrative agent and collateral agent to establish the Exit Term Loan Credit Facility in an aggregate principal amount of approximately $ 213,418 .

A detailed description of the Exit Term Loan Credit Agreement and Exit Term Loan Credit Facility is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

At June 30, 2022, Pyxus Holdings was in compliance with the covenants under the Exit Term Loan Credit Agreement.

Short-Term Seasonal Lines of Credit

Excluding all long-term credit agreements, the Company has typically financed its non-U.S.

operations with uncommitted short-term seasonal lines of credit arrangements with a number of banks.

These operating lines are generally seasonal in nature, typically extending for a term of 180 to 270 days corresponding to the tobacco crop cycle in that location.

These facilities are typically uncommitted in that the lenders have the right to cease making loans and demand repayment of loans at any time.

These loans are typically renewed at the outset of each tobacco season.

Certain of the foreign seasonal lines of credit are secured by trade receivables and inventories as collateral.

African Lines of Credit

On June 30, 2022, the Company and certain subsidiaries of the Company, including the Company’s subsidiaries in Malawi, Tanzania and Zambia (the "African Subsidiary Borrowers"), entered into the Fourth Amendment and Restatement Agreement dated as of June 27, 2022 (the "Restated TDB Agreement") with Eastern and Southern African Trade and Development Bank ("TDB") to amend and restate the Third Amendment and Restatement Agreement dated August 12, 2021 among them.

The Restated TDB Agreement sets forth the terms that govern the foreign seasonal lines of credit of each of the African Subsidiary Borrowers with TDB and supersedes the prior terms in effect.

The Restated TDB Agreement provides for a lending commitment with respect to the line of credit of the Company’s Malawi subsidiary of $ 80.0 million, a lending commitment with respect to the line of credit of the Company’s Tanzania subsidiary of $ 85.0 million, and a lending commitment with respect to the line of credit of the Company’s Zambia subsidiary of $ 40.0 million, in each case with current borrowing availability reduced by the amount of outstanding loans borrowed under the respective existing line of credit with TDB.

Loans under the Restated TDB Agreement bear interest at LIBOR plus 6 %.

The Restated TDB Agreement terminates on June 30, 2024, unless terminated sooner at TDB’s discretion on June 30, 2022 or June 30, 2023.

The terms of the Restated TDB Agreement may also be modified at TDB’s discretion on those dates.

The Restated TDB Agreement provides for a lending commitment with respect to the line of credit of the Company’s Malawi subsidiary of $ 100,000 , a lending commitment with respect to the line of credit of the Company’s Tanzania subsidiary of $ 70,000 , and a lending commitment with respect to the line of credit of the Company’s Zambia subsidiary of $ 15,000 , in each case with current borrowing availability reduced by the

amount of outstanding loans borrowed under the respective prior-existing line of credit with TDB.

The prior-existing outstanding loans under the Restated TDB Agreement bear interest at LIBOR plus 6.0 % and new loans made under the Restated TDB Agreement bear interest at LIBOR plus 5.5 %.

The Restated TDB Agreement terminates on June 30, 2024, unless terminated sooner at TDB’s discretion on June 30, 2023.

The terms of the Restated TDB Agreement may also be modified at TDB’s discretion on that date.

Borrowings under the Restated TDB Agreement are due upon the termination of the Restated TDB Agreement.

Pursuant to the Restated TDB Agreement, each of the Company and its subsidiaries, Pyxus Parent, Inc., and Pyxus Holdings, guarantee the obligations of the African Subsidiary Borrowers under the Restated TDB Agreement.

Pursuant to the Restated TDB Agreement, each of the Company and its subsidiaries, Pyxus Parent, Inc.

and Pyxus Holdings, Inc., guarantee the obligations of the African Subsidiary Borrowers under the Restated TDB Agreement.

In addition, the Restated TDB Agreement provides that obligations of each African Subsidiary Borrower under the Restated TDB Agreement are secured by a first priority pledge of:

13 unchanged sentences

The Restated TDB Agreement contains events of default including, but not limited to, nonpayment of principal or interest, violation of covenants, breaches of representations and warranties, cross-default to other debt, bankruptcy and other insolvency events, invalidity of loan documentation, certain changes of control of the Company and the other loan parties, termination of material licenses and material adverse changes.

At December 31, 2021, the Company and its subsidiaries party to the Restated TDB Agreement were in compliance with all such covenants under the Restated TDB Agreement and $ 89,652 was available for borrowing under the Restated TDB

Agreement, after reducing availability by the aggregate borrowings under the Restated TDB Agreement of $ 115,348 outstanding on that date.

Short-Term Borrowings

In addition to these credit arrangements, the Company has typically financed its non-U.S.

operations with uncommitted unsecured short-term seasonal lines of credit arrangements with a number of banks.

These operating lines are generally seasonal in nature, typically extending for a term of 180 to 270 days corresponding to the tobacco crop cycle in that location.

These facilities are typically uncommitted in that the lenders have the right to cease making loans and demand repayment of loans at any time.

These loans are typically renewed at the outset of each tobacco season.

Certain of the foreign seasonal lines of credit are secured by inventories as collateral.

At June 30, 2022, the Company and its subsidiaries party to the Restated TDB Agreement were in compliance with all such covenants under the Restated TDB Agreement and $ 55,642 was available for borrowing under the Restated TDB Agreement, after reducing availability by the aggregate borrowings under the Restated TDB Agreement of $ 129,358 outstanding on that date.

Securitized Receivables

The Company sells trade receivables to unaffiliated financial institutions under three accounts receivable securitization facilities.

The Company sells trade receivables to unaffiliated financial institutions under three accounts receivable securitization facilities, which are subject to annual renewal.

Under the first facility, the Company continuously sells a designated pool of trade receivables to a special purpose entity, which sells 100 % of the receivables to an unaffiliated financial institution.

As of December 31, 2021, the limit under the first facility was $ 125,000 of trade receivables.

Under the second and third facilities, the Company offers receivables for sale to unaffiliated financial institutions, which are then subject to acceptance by the unaffiliated financial institutions.

As of December 31, 2021, the limit under the second facility was $ 80,000 of trade receivables.

As of December 31, 2021, the investment limit under the third facility was variable based on qualifying sales.

As the servicer of these facilities, the Company may receive funds that are due to the unaffiliated financial institutions, which are net settled on the next settlement date.

As a result of the net settlement, trade and other receivables, net in the condensed consolidated balance sheets has been reduced by $ 2,730 , $ 4,078 , and $ 3,651 as of December 31, 2021 and 2020, and March 31, 2021, respectively.

T he following summarizes the accounts receivable securitization information:

December 31, 2021 December 31, 2020 March 31, 2021

As of June 30, 2022, the investment limit of this facility was $ 100,000 of trade receivables.

For the other facilities, the Company offers trade receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution.

As of June 30, 2022, the investment limit under the second facility was $ 80,000 of trade receivables.

As of June 30, 2022, the investment limit under the third facility was variable based on qualifying sales.

As the servicer of the first and second facilities, the Company may receive funds that are due to the unaffiliated financial institutions, which are net settled on the next settlement date.

As of June 30, 2022 and 2021, and March 31, 2022, trade

receivables, net in the condensed consolidated balance sheets has been reduced by $ 14,893 , $ 4,724 , and $ 1,872 as a result of the net settlement, respectively.

Refer to " Note 15.

Fair Value Measurements " for additional information.

The following summarizes the accounts receivable securitization information:

June 30, 2022 June 30, 2021 March 31, 2022

Receivables outstanding in facility $ 179,761 $ 66,671 $ 131,092

Beneficial interests 22,762 20,271 28,072

Servicing liability 21 — 14

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Three months ended June 30, 2022 Three months ended June 30, 2021

Cash proceeds for the period ended:

1 unchanged sentence

Deferred purchase price 45,468 37,681

Service fees 413 110 218

Total $ 198,917 $ 127,693

In certain markets, the Company guarantees bank loans to suppliers to finance their crops.

Under longer-term arrangements, the Company may also guarantee financing on suppliers’ construction of curing barns or other tobacco production assets.

Guaranteed loans are generally repaid concurrent with the delivery of tobacco to the Company.

The Company is obligated to repay guaranteed loans should the supplier default.

If default occurs, the Company has recourse against its various suppliers and their production assets.

The Company also guarantees bank loans of certain unconsolidated subsidiaries and a lease obligation for a former equity method investment.

In certain markets, the Company guarantees bank loans for suppliers to finance their crops.

The Company also guarantees bank loans of certain unconsolidated subsidiaries.

The following summarizes amounts guaranteed and the fair value of those guarantees:

December 31, 2021 December 31, 2020 March 31, 2021

June 30, 2022 June 30, 2021 March 31, 2022

Amounts guaranteed (not to exceed) $ 118,615 $ 95,272 $ 114,208

2 unchanged sentences

Fair value of guarantees 2,601 1,962 2,956

Amounts due to local banks on behalf of suppliers and included in accounts payable — — 10,930

(1) Of the guarantees outstanding at December 31, 2021, most expire within one year .

Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing 6,376 12,216 15,781

(1) Most of the guarantees outstanding at June 30, 2022 expire within one year .

Derivative Financial Instruments

1 unchanged sentence

These contracts are for green tobacco purchases, processing costs, and selling, general, and administrative expenses.

The Company recorded a net gain of $( 663 ) and $( 1,725 ) from its derivative financial instruments in cost of goods and services sold for the three and nine months ended December 31, 2021, respectively.

The Company recorded losses of $ 0 and $ 66 in cost of goods and services sold for the three and four months ended December 31, 2020, respectively, and $ 164 for the five months ended August 31, 2020.

As of December 31, 2021 and December 31, 2020, accumulated other comprehensive loss includes $ 2,743 and $ 619 , respectively, net of $ 215 and $ 168 of tax, respectively, for net unrealized losses related to designated cash flow hedges.

As of December 31, 2021 and December 31, 2020, the Company recorded current derivative assets of $ 603 and $ 1,652 and current derivative liabilities of $ 1,280 and $ 0 within other current assets and accrued expenses and other current liabilities, respectively.

Dollar notional amount of derivative contracts outstanding as of December 31, 2021 and December 31, 2020 was $ 72,522 and $ 44,123 , respectively.

The Company recorded a net gain of $ 862 and $ 415 from its derivative financial instruments in cost of goods and services sold for the three months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022 and 2021, the Company recorded current derivative assets of $ 560 and $ 4,896 within other current assets, respectively.

Dollar notional amount of derivative contracts outstanding as of June 30, 2022 and 2021 was $ 7,259 and $ 53,436 , respectively.

Fair Value Measurements

The following summarizes the financial assets and liabilities measured at fair value on a recurring basis:

December 31, 2021 December 31, 2020 March 31, 2021

June 30, 2022 June 30, 2021 March 31, 2022

Total Total Total

9 unchanged sentences

The following summarizes the reconciliation of changes in Level 3 instruments measured on a recurring basis:

Three months ended December 31, 2021 Three months ended December 31, 2020

Three months ended June 30, 2022 Three months ended June 30, 2021

Securitized Beneficial Interests Long-Term Debt Guarantees Securitized Beneficial Interests Long-Term Debt Guarantees

5 unchanged sentences

Ending balance $ 22,762 $ 660 $ 2,601 $ 20,271 $ 3,164 $ 1,962

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Securitized Beneficial Interests Long-Term Debt Guarantees Securitized Beneficial Interests Long-Term Debt Guarantees Securitized Beneficial Interests Long-Term Debt Guarantees

Beginning balance $ 19,370 $ 3,162 $ 1,740 $ 11,159 $ 3,892 $ 1,256 $ 27,021 $ 848 $ 2,791

Issuances of sales of receivables/guarantees 162,065 — 948 59,501 — 262 66,821 — 667

Settlements ( 156,651 ) ( 1,107 ) ( 1,708 ) ( 48,555 ) ( 126 ) ( 1,228 ) ( 81,038 ) ( 100 ) ( 2,192 )

Additions — 2 — — 31 — — 3,144 —

(Losses) gains recognized in earnings ( 3,211 ) — ( 233 ) ( 1,573 ) — 15 ( 1,645 ) — ( 10 )

Ending balance $ 21,573 $ 2,057 $ 747 $ 20,532 $ 3,797 $ 305 $ 11,159 $ 3,892 $ 1,256

For the nine months ended December 31, 2021, four months ended December 31, 2020, and five months ended August 31, 2020, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests were $ 640 , $ 726 , and $ 263 , respectively.

For the three months ended June 30, 2022 and 2021, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests was $ 618 and $ 319 , respectively.

Pension and Other Postretirement Benefits

9 unchanged sentences

Pension Plan's liabilities upon termination.

In addition, the Company expects to record a pension settlement charge at plan termination, which includes the reclassification of unrecognized pension gains and losses within accumulated other comprehensive loss to other income (expense) within the Company's consolidated statements of operations.

In addition, the Company expects to record a pension settlement charge at plan termination, which includes the reclassification of unrecognized pension gains and losses within accumulated other comprehensive income (loss) to other (expense) income, net within the Company's condensed consolidated statements of operations.

The Company does not have an estimate for this future settlement charge.

The amount of unrecognized pension gains within accumulated other comprehensive loss related to the U.S.

Pension Plan is approximately $ 1,359 at December 31, 2021.

The amount of unrecognized pension gains within accumulated other comprehensive income (loss) related to the U.S.

Pension Plan is approximately $ 5,401 at June 30, 2022.

Contingencies and Other Information

1 unchanged sentence

The government in the Brazilian State of Parana ("Parana") issued a tax assessment on October 26, 2007 with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil.

At December 31, 2021, the assessment for intrastate trade tax credits taken is $ 2,360 and the total assessment including penalties and interest is $ 8,606 .

At June 30, 2022, the assessment for intrastate trade tax credits taken is $ 2,515 and the total assessment including penalties and interest is $ 9,386 .

On March 18, 2014, the government in Brazilian State of Santa Catarina also issued a tax assessment with respect to local intrastate trade tax credits that result primarily from tobacco transferred between states within Brazil.

At December 31, 2021, the assessment for intrastate trade tax credits taken is $ 2,042 and the total assessment including penalties and interest is $ 5,570 .

At June 30, 2022, the assessment for intrastate trade tax credits taken is $ 2,175 and the total assessment including penalties and interest is $ 6,057 .

The Company believes it has properly complied with Brazilian law and will contest any assessment through the judicial process.

Should the Company lose in the judicial process, the loss of the intrastate trade tax credits would have a material impact on the financial statements of the Company.

Company lose in the judicial process, the loss of the intrastate trade tax credits would have a material impact on the financial statements of the Company.

The Company also has local intrastate trade tax credits in the Brazil State of Rio Grande do Sul.

5 unchanged sentences

In addition to the above-mentioned matters, certain of the Company’s subsidiaries are involved in other litigation or legal matters incidental to their business activities, including tax matters.

While the outcome of these matters cannot be predicted with certainty, the Company is vigorously defending them and does not currently expect that any of them will have a material adverse effect on its business or financial position.

While the outcome of these matters cannot be predicted with certainty, they are being vigorously defending and the Company does not currently expect that any of them will have a material adverse effect on its business or financial position.

However, should one or more of these matters be resolved in a manner adverse to its current expectation, the effect on the Company’s results of operations for a particular fiscal reporting period could be material.

1 unchanged sentence

The Company identified an asset retirement obligation ("ARO") associated with one of its facilities that requires it to restore the land to its initial condition upon vacating the facility.

The Company has not recognized a liability under generally accepted

accounting principles for this ARO as the fair value of restoring the land at this site cannot be reasonably estimated since the settlement date is unknown at this time.

The Company has not recognized a liability under generally accepted accounting principles for this ARO as the fair value of restoring the land at this site cannot be reasonably estimated since the settlement date is unknown at this time.

The settlement date is unknown because the land restoration is not required until title is returned to the government, and the Company has no current or future plans to return the title.

3 unchanged sentences

The following summarizes sales and purchases transactions with related parties:

Three months ended December 31, 2021 Three months ended December 31, 2020

Sales $ 1,955 $ 207

Purchases 39,447 28,815

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

Three months ended June 30, 2022 Three months ended June 30, 2021

Sales $ 10,622 $ 10,637

1 unchanged sentence

The Company included the following related party balances in its condensed consolidated balances sheets:

December 31, 2021 December 31, 2020 March 31, 2021 Location in the Condensed Consolidated Balance Sheets

June 30, 2022 June 30, 2021 March 31, 2022 Location in the Condensed Consolidated Balance Sheets

Accounts receivable, related parties $ 17,750 $ 4,138 $ 1,896 Other receivables

Notes receivable, related parties — 17,301 1,431 Other receivables

Long-term notes receivable, related parties — 149 21 Other non-current assets

Accounts payable, related parties 10,403 15,124 41,747 Accounts payable

Advances from related parties 1,342 14,550 15,240 Advances from customers

Transactions with the Glendon Investor and the Monarch Investor

On August 24, 2020, the Company entered into an Exit Term Loan Credit Agreement and issued Senior Secured First Lien Notes with certain lenders, including the Glendon Investor and the Monarch Investor (see “Note 3.

Emergence from Voluntary Reorganization under Chapter 11” for additional information).

Transactions with Significant Shareholders

On April 23, 2021, the Company and certain of its subsidiaries with certain funds managed by the Glendon Investor and the Monarch Investor, as lenders, and related matters entered into a $ 120,000 delayed-draw credit facility agreement (see " Note 11.

Debt Arrangements " for additional information).

After that date, a fund managed by Owl Creek Asset Management, L.P.

became a lender under the DDTL Facility.

On December 30, 2021, the Company repaid $ 15,375 of the DDTL facility.

Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of December 31, 2021 and 2020, and March 31, 2021, includes $ 6,039 , $ 4,099 , and $ 2,309 , respectively, of interest payable to the Glen don Investor and the Monarch Investor.

Interest expense as presented in the condensed consolidated statements of operations includes $ 8,530 and $ 24,566 for the three and nine months ended December 31, 2021, respectively, and $ 5,317 and $ 7,509 for the three and nine months ended December 31, 2020, respectively, that relates to the Glendon Investor and the Monarch Investor.

On June 2, 2022, Intabex, the Company and the Guarantors entered into an Amendment and Restatement Agreement with the DDTL Facility Lenders and the DDTL Agent to amend and restate the DDTL Facility Credit Agreement as set forth in Amended Credit Agreement, which became effective on July 28, 2022 (see " Note 11.

Debt Arrangements " and " Note 20.

Subsequent Events " for additional information).

Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of June 30, 2022 and 2021, and March 31, 2022, includes $ 5,953 , $ 6,361 , and $ 3,984 , respectively, of interest payable to the Glen don Investor,

the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P.

Interest expense as presented in the condensed consolidated statements of operations includes $ 8,097 and $ 7,499 for the three months ended June 30, 2022 and 2021, respectively, that relates to the Glendon Investor, the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P.

Transactions with the Deconsolidated Canadian Cannabis Subsidiaries

2 unchanged sentences

These payments also funded fees and expenses paid to the DIP Lender, professional fees and expenses incurred by the Canadian Cannabis Subsidiaries and the Monitor in respect of the CCAA Proceeding, and such other costs and expenses of the Canadian Cannabis Subsidiaries as agreed to by the DIP Lender.

As of December 31, 2021 and 2020, and March 31, 2021, the outstanding loan balance under the Canadian DIP Facility was $ 0 , $ 0 , and $ 5,790 , respectively, and is included in other receivables within the condensed consolidated balance sheets.

As of June 30, 2022 and 2021, and March 31, 2022, the outstanding loan balance under the Canadian DIP Facility was $ 0 , $ 11,082 , and $ 0 , respectively, and is included in other receivables within the condensed consolidated balance sheets.

On July 8, 2021, the loans under the Canadian DIP Facility were fully repaid to the DIP Lender.

CCAA Proceeding and Deconsolidation of Subsidiaries" for additional information.

Segment Information

The Company's operations are managed and reported in nine operating segments that are organized by product category and geographic area and aggregated into three reportable segments for financial reporting purposes:

Leaf - North America, Leaf - Other Regions, and Other Products and Services.

The types of products and services from which each reportable segment derives its revenues are as follows:

• Leaf - North America ships tobacco to manufacturers of cigarettes and other consumer tobacco products around the world.

Leaf - North America is more concentrated on processing and other activities compared to the rest of the world.

• Leaf - Other Regions ships tobacco to manufacturers of cigarettes and other consumer tobacco products around the world.

Leaf - Other Regions sells a small amount of processed but un-threshed flue-cured and burley tobacco in loose-leaf and bundle form to certain customers.

• Other Products and Services primarily consists of e-liquid products and industrial hemp and included, for periods prior to the Order Date, the Canadian Cannabis Subsidiaries.

E-liquids and industrial hemp products are sold through retailers and directly to consumers via e-commerce platforms and other distribution channels.

The Canadian Cannabis Subsidiaries collectively operate businesses, under licenses issued by Health Canada, for the production and sale of cannabis products to retailers in Canada.

The following summarizes segment information:

Three months ended December 31, 2021 Three months ended December 31, 2020

Sales and other operating revenues:

Leaf - North America $ 59,994 $ 60,544

Leaf - Other Regions 366,130 310,383

Other Products and Services 2,818 8,633

Total sales and other operating revenues $ 428,942 $ 379,560

Operating income (loss):

Leaf - North America $ 6,574 $ 4,475

Leaf - Other Regions 29,175 21,100

Other Products and Services ( 5,527 ) ( 12,095 )

Total operating income $ 30,222 $ 13,480

Successor Predecessor

Nine months ended December 31, 2021 Four months ended December 31, 2020 Five months ended August 31, 2020

The following summarizes segment information, with the All Other category being included for purposes of reconciliation of the respective balances below of the Leaf segment (the Company's sole reportable segment) to the condensed consolidated financial statements:

Three months ended June 30, 2022 Three months ended June 30, 2021

Sales and other operating revenues:

Leaf - North America $ 200,283 $ 80,521 $ 57,734

Leaf - Other Regions 946,654 407,371 380,497

Other Products and Services 9,496 9,502 9,369

Total sales and other operating revenues $ 1,156,433 $ 497,394 $ 447,600

Operating income (loss):

Leaf - North America $ 17,672 $ 5,384 $ 376

Leaf - Other Regions 50,996 24,988 ( 1,028 )

Other Products and Services ( 24,788 ) ( 25,358 ) ( 43,305 )

Total operating income (loss) $ 43,880 $ 5,014 $ ( 43,957 )

December 31, 2021 December 31, 2020 March 31, 2021

Leaf $ 340,626 $ 329,858

All Other 3,279 3,432

Consolidated sales and other operating revenues $ 343,905 $ 333,290

Segment operating income:

Leaf $ 11,629 $ 14,778

All Other ( 4,377 ) ( 6,341 )

Segment operating income 7,252 8,437

Restructuring and asset impairment charges 300 233

Consolidated operating income $ 6,952 $ 8,204

June 30, 2022 June 30, 2021 March 31, 2022

Segment assets:

Leaf - North America $ 282,058 $ 285,500 $ 247,265

Leaf - Other Regions 1,257,152 1,227,089 1,204,993

Other Products and Services 61,487 183,466 87,204

Leaf $ 1,760,557 $ 1,598,242 $ 1,641,552

All Other 51,889 83,586 56,975

Total assets $ 1,812,446 $ 1,681,828 $ 1,698,527

Subsequent Events

CCAA Proceeding and Deconsolidation of Subsidiaries

On May 10, 2021, a definitive agreement for the sale of the assets of Figr Norfolk was entered into for a purchase price of Cdn.$ 5,000 .

On June 10, 2021, the Canadian Court approved the sale agreement.

The consummation of the sale of the assets of Figr Norfolk occurred on January 28, 2022.

As of January 1, 2022, the date of the Company’s annual goodwill impairment testing for fiscal 2022, the Company had goodwill of $ 31,814 .

Due to a sustained decline in the implied value of the Company's equity based on public trading and share price as well as uncertainty in the Company's estimate of timing for future operating results due to the recent economic effects of the COVID-19 pandemic and related variants, the Company expects to recognize non-cash impairment losses to fully write-off the carrying values of its goodwill during the three months ending March 31, 2022.

PNC ABL Credit Facility

On February 8, 2022, Pyxus Holdings, certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the “Borrowers”), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc., as guarantors, entered into an ABL Credit Agreement (the “ABL Credit Agreement”), dated as of February 8, 2022, by and among Pyxus Holdings, as Borrower Agent, the Borrowers and parent guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as Administrative Agent and Collateral Agent, to establish an asset-based revolving credit facility (the “PNC ABL Facility”), the proceeds of which may be used to refinance existing senior bank debt, pay fees and expenses related to the PNC ABL Facility, partially fund capital expenditures, and provide for the ongoing working capital needs of the Borrowers.

The PNC ABL Facility may be used for revolving credit loans and letters of credit from time to time up to an initial maximum principal amount of $ 100,000 , subject to the limitations described below in this paragraph.

The PNC ABL Facility includes a $ 20,000 uncommitted accordion feature that permits Pyxus Holdings, under certain conditions, to solicit the lenders under the PNC ABL Facility to provide additional revolving loan commitments to increase the aggregate amount of the revolving loan commitments under the PNC ABL Facility not to exceed a maximum principal amount of $ 120,000 .

The amount available under the PNC ABL Facility is limited by a borrowing base consisting of certain eligible accounts receivable and inventory, reduced by specified reserves, as follows:

• 85 % of eligible accounts receivable, plus

• 90 % of eligible credit insured accounts receivable, plus

• the lesser of (i) 70 % of eligible inventory valued at the lower of cost (based on a first-in first-out basis) and market value thereof (net of intercompany profits) or (ii) 85 % of the net-orderly-liquidation value percentage of eligible inventory, minus

• applicable reserves.

The PNC ABL Facility permits both base rate borrowings and borrowings based upon the Bloomberg-Short-Term Bank Yield Index rate (“BSBY”).

Borrowings under the PNC ABL Facility bear interest at an annual rate equal to one, three, or six-month reserve-adjusted BSBY Rate plus 300 basis points or 200 basis points above base rate, as applicable, with a fee on unutilized commitments at an annual rate of 37.5 basis points.

The PNC ABL Facility matures, subject to extension on terms and conditions set forth in the ABL Credit Agreement, on the earlier of February 8, 2027 or 90 days prior to the earliest maturity of obligations owing under the Term Loan Credit Agreement and the Indenture.

The PNC ABL Facility may be prepaid from time to time, in whole or in part, without prepayment or premium, subject to a termination fee upon the permanent reduction of commitments under the PNC ABL Facility of 300 basis points for terminations in the first year after entry into the ABL Credit Agreement, 200 basis points for terminations in the second year and 100 basis points for termination in the third year.

In addition, customary mandatory prepayments of the loans under the PNC ABL Facility are required upon the occurrence of certain events including, without limitation, outstanding borrowing exposures exceeding the borrowing base, certain dispositions of assets outside of the ordinary course of business in respect of certain collateral securing the PNC ABL Facility and certain casualty and condemnation events.

With respect to base rate loans, accrued interest is payable monthly in arrears and, with respect to BSBY loans, accrued interest is payable monthly and on the last day of any applicable interest period.

The Borrowers’ obligations under the PNC ABL Facility (and certain related obligations) are (a) guaranteed by Pyxus Parent, Inc.

and the Company and all of Pyxus Holdings’ wholly owned domestic subsidiaries, and each of Pyxus Holdings’ future wholly owned domestic subsidiaries is required to guarantee the PNC ABL Facility on a senior secured basis (collectively, the “ABL Loan Parties”) and (b) secured by the collateral, as described below, which is owned by the ABL Loan Parties.

The liens and other security interests granted by the ABL Loan Parties on the collateral for the benefit of the lenders under the PNC ABL Facility (and certain related secured parties) are, subject to certain permitted liens, secured by first-priority security interests on a pari passu basis with the security interests securing the ABL Loan Parties’ obligations under the Term Loan Credit Agreement and the Notes.

The obligations of Pyxus Holdings and each other ABL Loan Party under the PNC ABL Facility and any related guarantee are repaid pursuant to a waterfall with respect to portions of the Collateral as set forth in the existing intercreditor agreements with respect to Pyxus Holdings’ senior secured debt.

Cash Dominion

Under the terms of the PNC ABL Facility, if (i) an event of default has occurred and is continuing, (ii) excess borrowing availability under the PNC ABL Facility (based on the lesser of the commitments thereunder and the borrowing base) (the “Excess Availability”) falls below 10 % of the total commitments under the PNC ABL Facility at such time, or (iii) Domestic Availability (as defined in the ABL Credit Agreement) being less than $ 20,000 , the ABL Loan Parties will become subject to cash dominion, which will require daily prepayment of loans under the PNC ABL Facility with the cash deposited in certain deposit accounts of the ABL Loan Parties, including concentration accounts, and will restrict the ABL Loan Parties’ ability to transfer cash from their concentration accounts to their disbursement accounts.

Such cash dominion period (a “Dominion Period”) shall end when (i) if arising as a result of a continuing event of default, such event of default ceases to exist, (ii) if arising as a result of non-compliance with the Excess Availability threshold, Excess Availability shall be equal to or greater than 10 % of the total commitments under the PNC ABL Facility for a period of 30 consecutive days and no event of default is continuing, or (iii) if arising as a result of Domestic Availability being less than $ 20,000 , Domestic Availability is greater than $ 20,000 for a period of 30 consecutive days and no event of default is continuing.

Financial Covenants

The ABL Credit Agreement governing the PNC ABL Facility contains (i) a springing covenant requiring that the Company’s fixed charge coverage ratio be no less than 1.10 to 1.00 during any Dominion Period and (ii) a covenant requiring Domestic Availability greater than $ 20,000 at all times until audited financial statements for fiscal year ending March 31, 2023 are delivered under the ABL Credit Agreement.

Affirmative and Restrictive Covenants

The ABL Credit Agreement governing the PNC ABL Facility contains customary representations and warranties, affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s ability to, among other things:

• incur additional indebtedness or issue disqualified stock or preferred stock;

• make investments;

• pay dividends and make other restricted payments;

• sell certain assets;

• create liens;

• enter into sale and leaseback transactions;

• consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets;

• enter into transactions with affiliates;

• designate subsidiaries as Unrestricted Subsidiaries (as defined in the ABL Credit Agreement).

Exit ABL Credit Agreement

On February 8, 2022, Pyxus Holdings terminated the Exit ABL Credit Agreement and repaid $ 56,500 outstanding thereunder with proceeds from the initial borrowing under the PNC ABL Facility.

Operating and Reportable Segment Considerations

The Company is reevaluating its operating and reportable segments under ASC Topic 280 – Segment Reporting following the effectiveness of the Plan in August 2020, the appointment of a new Board of Directors in fiscal 2021, the outcomes achieved from cost savings and restructuring initiatives implemented in fiscal 2021, the Company's exit from its industrial hemp, CBD, and Canadian cannabis businesses in 2021, and the impact the COVID-19 pandemic has had on the Company's global operations.

These events are changing how the Company is managed and the information used by Management to assess the Company's performance and allocation of its resources.

The Company expects to conclude this evaluation during the three months ending March 31, 2022.

On July 28, 2022, the Amended Credit Agreement became effective (see " Note 11.

Debt Arrangements " for additional information).

In connection with the effectiveness of the Amended Credit Agreement, the Glendon Investor, the Monarch Investor, and a fund managed by Owl Creek Asset Management, L.P.

received $ 5,119 of the aggregate $ 5,250 in exit fee payments from the repayment of the principal amount under the DDTL Facility.

The Glendon Investor, the Monarch Investor and a fund managed by Owl Creek Asset Management, L.P.

received in the aggregate $ 3,900 of the total $ 4,000 in commitment and closing fees, which were reflected as original issue discount, paid to all Term Loan Lenders in connection with the aggregate $ 97,500 principal amount of the Term Loans made by them of the total $ 100,000 aggregate principal amount of the Term Loans made by all Term Loan Lenders.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements