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Item 1. Financial Statements

2023-02-14 compared with 2022-11-10 · 247 added, 146 removed, 508 unchanged (44% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

(in thousands, except per share data) 2022 2021 2022 2021

3 unchanged sentences

Selling, general, and administrative expenses 37,119 34,235 106,694 106,005

Other expense, net 1,151 1,816 66 1,654

Other expense (income), net 9,040 ( 163 ) 9,106 1,491

Restructuring and asset impairment charges 35 560 4,380 7,652

Goodwill impairment — 372 — 372

Operating income 41,607 30,222 75,695 43,880

2 unchanged sentences

Interest expense, net 31,361 27,503 85,649 82,820

Loss before income taxes and other items ( 4,315 ) ( 25,479 ) ( 23,436 ) ( 44,115 )

Income tax benefit 1,210 14,128 2,077 22,567

Income (loss) from unconsolidated affiliates 1,555 1,328 5,304 ( 103 )

Income (loss) before income taxes and other items 10,246 ( 4,350 ) ( 13,190 ) ( 48,465 )

Income tax expense 17,887 31,809 15,810 9,242

Income from unconsolidated affiliates 5,404 6,102 10,708 5,999

Net loss ( 2,237 ) ( 30,057 ) ( 18,292 ) ( 51,708 )

Net (loss) income attributable to noncontrolling interests ( 13 ) ( 342 ) 145 ( 462 )

Net income (loss) attributable to noncontrolling interests 96 43 241 ( 419 )

Net loss attributable to Pyxus International, Inc.

7 unchanged sentences

and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

Three Months Ended Six Months Ended

September 30, September 30,

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended Nine Months Ended

December 31, December 31,

(in thousands) 2022 2021 2022 2021

Net loss $ ( 2,237 ) $ ( 30,057 ) $ ( 18,292 ) $ ( 51,708 )

Other comprehensive (loss) income, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 4,855 ( 1,753 ) 1,001 ( 2,655 )

Pension and other postretirement benefit plans ( 78 ) — ( 1,640 ) ( 512 )

Change in pension liability for settlements — ( 35 ) — ( 35 )

Cash flow hedges ( 371 ) ( 1,550 ) ( 3,642 ) ( 118 )

Total other comprehensive (loss) income, net of tax ( 8,131 ) ( 4,999 ) ( 8,687 ) 18

Total comprehensive loss ( 9,681 ) ( 15,022 ) ( 24,742 ) ( 21,633 )

Comprehensive (loss) income attributable to noncontrolling interests ( 13 ) ( 342 ) 145 ( 462 )

Comprehensive loss attributable to Pyxus International, Inc.

Total other comprehensive income (loss), net of tax 4,406 ( 3,338 ) ( 4,281 ) ( 3,320 )

Total comprehensive income (loss) 2,169 ( 33,395 ) ( 22,573 ) ( 55,028 )

Comprehensive income (loss) attributable to noncontrolling interests 96 43 241 ( 419 )

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

$ 2,073 $ ( 33,438 ) $ ( 22,814 ) $ ( 54,609 )

3 unchanged sentences

Condensed Consolidated Balance Sheets

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

(in thousands) December 31, 2022 December 31, 2021 March 31, 2022

Current assets

60 unchanged sentences

Balance, March 31, 2022 $ 390,290 $ ( 218,813 ) $ ( 8,873 ) $ 6,328 $ 6,349 $ 6,090 $ 181,371

Net loss attributable to Pyxus International, Inc.

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

— ( 14,663 ) — — — 158 ( 14,505 )

6 unchanged sentences

Balance, September 30, 2022 390,290 ( 235,013 ) ( 12,727 ) 4,766 3,078 3,183 153,577

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

— ( 2,333 ) — — — 96 ( 2,237 )

Other comprehensive income (loss), net of tax — — 4,855 ( 78 ) ( 371 ) — 4,406

Balance, December 31, 2022 $ 390,290 $ ( 237,346 ) $ ( 7,872 ) $ 4,688 $ 2,707 $ 3,279 $ 155,746

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

9 unchanged sentences

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 )

Other ( 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"

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended

(in thousands) September 30, 2022 September 30, 2021

Nine Months Ended

(in thousands) December 31, 2022 December 31, 2021

Operating Activities:

7 unchanged sentences

Loss on pension settlement 2,588 —

Income (loss) from unconsolidated affiliates, net of dividends 6,217 9,248

Income from unconsolidated affiliates, net of dividends 814 3,212

Changes in operating assets and liabilities, net

13 unchanged sentences

Proceeds from sale of property, plant, and equipment 2,213 2,168

Collections on beneficial interests on securitized trade receivables 76,209 82,649

Collections from beneficial interests in securitized trade receivables 122,638 155,226

DIP loan to deconsolidated subsidiary — ( 5,229 )

7 unchanged sentences

Repayment of DDTL facility ( 110,250 ) ( 15,375 )

Proceeds from term loan facility 100,000 —

Proceeds from DDTL term loan facility 100,000 —

Proceeds from revolving loan facilities 80,000 11,000

5 unchanged sentences

Effect of exchange rate changes on cash 3,776 ( 2,590 )

Increase in cash, cash equivalents, and restricted cash 17,071 52,530

Pyxus International, Inc.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Six Months Ended

(in thousands) September 30, 2022 September 30, 2021

(Decrease) increase in cash, cash equivalents, and restricted cash ( 85,541 ) 33,340

Nine Months Ended

(in thousands) December 31, 2022 December 31, 2021

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

14 unchanged sentences

Revenue Recognition

Restructuring and Asset Impairment

Restructuring and Asset Impairment Charges

Loss Per Share

26 unchanged sentences

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:

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 that 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.

4 unchanged sentences

Segment Information " for additional information.

Reclassifications

The prior-period amount for goodwill impairment has been reclassified from other expense (income), net to conform to the current-year presentation.

New Accounting Standards

12 unchanged sentences

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 Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2022 2021 2022 2021

5 unchanged sentences

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

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2022 2021 2022 2021

7 unchanged sentences

The Company continued its focus on cost saving initiatives.

The employee separation and asset impairment charges for the periods ended September 30, 2022 were primarily related to the restructuring of certain non-leaf agriculture operations.

The employee separation and asset impairment charges for the periods ended September 30, 2021 were primarily related to the write-off of the Company's remaining industrial hemp cannabidiol ("CBD") extraction equipment and the continued restructuring of certain leaf operations.

The employee separation and asset impairment charges for the periods ended December 31, 2022 were primarily related to the restructuring of certain non-leaf agriculture operations.

The employee separation and asset impairment charges for the periods ended December 31, 2021 were primarily related to the write-off of the Company's remaining industrial hemp cannabidiol ("CBD") extraction equipment and the continued restructuring of certain leaf operations.

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

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2022 2021 2022 2021

4 unchanged sentences

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

As of December 31, 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 six-month interim period of the current fiscal year were an annual period.

The effective tax rate for the six months ended September 30, 2022 and 2021 was 8.9 % and 51.2 %, respectively.

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

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 were an annual period.

The effective tax rate for the nine months ended December 31, 2022 and 2021 was ( 119.9 )% and ( 19.1 )%, respectively.

For the nine months ended December 31, 2022 and 2021, the difference between the Company’s effective rate and the U.S.

statutory rate of 21.0% is primarily due to the impact of net foreign exchange effects, non-deductible interest, and variations in the expected jurisdictional mix of earnings.

1 unchanged sentence

The following summarizes the computation of loss per share:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2022 2021 2022 2021

6 unchanged sentences

The following summarizes the composition of inventories, net:

September 30, 2022 September 30, 2021 March 31, 2022

December 31, 2022 December 31, 2021 March 31, 2022

Processed tobacco $ 571,909 $ 650,373 $ 517,613

30 unchanged sentences

Equity Method Investments

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

The following summarizes the Company's equity method investments as of December 31, 2022:

Investee Name Location Primary Purpose Ownership Percentage Basis Difference

10 unchanged sentences

The following summarizes financial information for these equity method investments:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2022 2021 2022 2021

4 unchanged sentences

Company's dividends received — — 11,523 8,666

September 30, 2022 September 30, 2021 March 31, 2022

December 31, 2022 December 31, 2021 March 31, 2022

Balance sheet:

7 unchanged sentences

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

September 30, 2022 September 30, 2021 March 31, 2022

December 31, 2022 December 31, 2021 March 31, 2022

Investments in variable interest entities $ 87,381 $ 85,263 $ 88,118

3 unchanged sentences

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

Six Months Ended September 30, 2022

Nine Months Ended December 31, 2022

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

15 unchanged sentences

The following summarizes debt and notes payable:

September 30, September 30, March 31,

December 31, December 31, March 31,

(in thousands) Interest Rate 2022 2021 2022

3 unchanged sentences

Exit ABL Credit Facility 5.8 % (1)

Term Loan Facility (2)

DDTL Term Loan Facility (2)

DDTL Facility 10.7 % (1)

16 unchanged sentences

Letters of credit $ 14,337 $ 9,543 $ 9,038

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

As the ABL Credit Facility and the Term Loan Facility have not been outstanding for a trailing twelve-month period, the interest rate is the weighted average rate from inception through September 30, 2022.

(1) Weighted average rate for the trailing twelve months ended December 31, 2022.

As the ABL Credit Facility and the DDTL Term Loan Facility have not been outstanding for a trailing twelve-month period, the interest rate is the weighted average rate from inception through December 31, 2022.

(2) Balance of $ 97,177 is net of original issue discount of $ 2,823 .

2 unchanged sentences

Total repayment will be $ 280,844 .

(4) The aggregate balance of the Exit Term Loan Credit Facility of $ 221,606 includes $ 5,932 of accrued paid-in-kind interest.

(4) The aggregate balance of the Exit Term Loan Credit Facility of $ 222,620 includes $ 3,718 accrued paid-in-kind interest and $ 5,484 original issue premium.

(5) Primarily foreign seasonal lines of credit.

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 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.

On February 8, 2022, the Company’s wholly owned subsidiary, Pyxus Holdings, Inc.

("Pyxus Holdings"), certain subsidiaries of Pyxus Holdings (together with Pyxus Holdings, the "Borrowers"), and the Company and its wholly owned subsidiary, Pyxus Parent, Inc.

("Pyxus Parent"), 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 .

The ABL Credit 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 Exit Term Loan Credit Agreement and the Indenture.

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

At December 31, 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.

The Exit ABL Credit Facility provided 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.

1 unchanged sentence

On April 23, 2021, Intabex Netherlands B.V.

("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.

("Intabex"), an indirect wholly owned subsidiary of the Company, entered into a Term Loan Credit Agreement (the "Initial 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, Pyxus Holdings, Inc., Alliance One International, LLC, Alliance One International Holdings, Ltd, as guarantors (collectively, the "DDTL 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 (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").

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

became a lender under the Initial DDTL Facility.

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

The obligations of Intabex under the Initial DDTL Facility Credit Agreement (and certain related obligations) were (a) guaranteed by the DDTL 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 became a guarantor of borrowings under the Exit Term Loan Credit Agreement (defined below), which subsidiaries are referred to collectively, together with the DDTL Parent Guarantors, as the "DDTL Guarantors", and (b) were 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.

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.

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 (the "Amendment and Restatement Effectiveness Date"), 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.

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 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.

The Term Loans mature on December 2, 2023.

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.

At September 30, 2022, Intabex and each of the Guarantors was in compliance with the covenants under the Amended Credit Facility.

Related Party Transactions

Based on a Schedule 13D/A filed with the SEC on October 19, 2022 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.

A representative of the Glendon Investor and a representative of the Monarch Investor servce as directors of Pyxus.

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.

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

Amendment and Restatement of the Initial DDTL Facility Credit Agreement

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

On July 28, 2022 (the "DDTL Amendment and Restatement Effectiveness Date"), following the satisfaction of the conditions to effectiveness specified in the Amendment and Restatement Agreement, the amendment and restatement of the Initial DDTL Facility Credit Agreement by the DDTL Credit Agreement became effective.

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

The DDTL Credit Agreement provided that the DDTL 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 DDTL Amendment and Restatement Effectiveness Date, including a payment made at maturity.

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

Under the DDTL Credit Agreement, interest on the outstanding principal amount of the DDTL Term Loans accrued 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 DDTL Credit Agreement and subject to a specified floor) plus 6.5 %.

Interest was required 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 DDTL Credit Agreement, the DDTL Loan Lenders received on the DDTL Amendment and Restatement Effectiveness Date a non-refundable commitment fee equal to 3.0 % of the aggregate commitments under the DDTL Term Loan Facility and a closing fee equal to

1.0 % of the aggregate commitments under the DDTL Term Loan Facility, as original issue discount.

The DDTL Term Loans were scheduled to mature on December 2, 2023.

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

At December 31, 2022, Intabex and each of the DDTL Guarantors were in compliance with the covenants under the DDTL Term Loan Facility.

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.

The Notes mature on August 24, 2024.

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

On August 24, 2020, Pyxus Holdings issued approximately $ 280,844 in aggregate principal amount of 10.0% Senior Secured First Lien Notes due 2024 (the "Existing Notes") pursuant to the Indenture dated as of August 24, 2020 (the "Existing Notes Indenture") among Pyxus Holdings, the initial guarantors party thereto, and Wilmington Trust, National Association, as trustee and collateral agent.

The Existing Notes mature on August 24, 2024.

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

At December 31, 2022, Pyxus Holdings was in compliance with the covenants under the Existing Notes 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 .

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 Exit Term Loan Credit Facility.

The Exit Term Loans and the Exit Term Credit Facility mature on February 24, 2025.

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

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

The aggregate principal amount of loans outstanding under the debtor-in-possession financing facility of Old Holdco, Inc.

(formerly named Pyxus International, Inc.) and its then subsidiaries Alliance One International, LLC, Alliance One North America, LLC, Alliance One Specialty Products, LLC and GSP Properties, LLC , and related fees, was converted into, or otherwise satisfied with the proceeds of, the Exit Term Loan Credit Facility.

The term loans outstanding under the Exit Term Loan Credit Facility (the "Exit Term Loans") and the Exit Term Credit Facility mature on February 24, 2025.

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

At December 31, 2022, Pyxus Holdings and the guarantors party to the Exit Term Loan Credit Agreement were in compliance with the covenants under the Exit Term Loan Credit Agreement.

Short-Term Seasonal Lines of Credit

4 unchanged sentences

Certain of the foreign seasonal lines of credit are secured by trade receivables and inventories as collateral and are guaranteed by the Company and certain of its subsidiaries.

As of September 30, 2022, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 148,000 , which includes the lines of credit of certain of the Company's African subsidiaries with Eastern and Southern African Trade and Development Bank ("TDB").

As of September 30, 2022, the aggregate amount available for borrowing under the seasonal lines of credit was $ 165,900 .

At September 30, 2022, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term seasonal lines of credit.

As of December 31, 2022, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 128,630 , which includes the lines of credit of certain of the Company's African subsidiaries with Eastern and Southern African Trade and Development Bank ("TDB").

As of December 31, 2022, the aggregate amount available for borrowing under the seasonal lines of credit was $ 218,900 .

At December 31, 2022, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term seasonal lines of credit.

Support Agreement for Debt Exchange Offers

The Company, Pyxus Parent and Pyxus Holdings (collectively, the "Holding Companies") entered into a Support and Exchange Agreement, effective as of December 27, 2022 (as amended, including by joinders thereto, the "Support Agreement"), with a group of creditors, including Glendon Capital Management LP, Monarch Alternative Capital LP, Nut Tree Capital Management, L.P., Intermarket Corporation and Owl Creek Asset Management, L.P.

on behalf of certain funds managed by them and/or certain of their advisory clients, as applicable (collectively, the "Supporting Holders"), holding in aggregate:

• approximately 99.7 % of the DDTL Term Loans outstanding under the DDTL Credit Agreement;

• approximately 68.1 % of the Exit Term Loans outstanding under the Exit Term Loan Credit Agreement;

• approximately 64.1 % of the Existing Notes outstanding under the Existing Notes Indenture.

Pursuant to the Support Agreement, the Supporting Holders agreed to participate in a set of exchange transactions to be commenced by the Holding Companies, which exchange transactions are described in " Note 21 .

Subsequent Events ." The Support Agreement includes certain covenants on the part of each of the Holding Companies, the Supporting Holders and other parties who execute a joinder thereto to become a Supporting Holder, including, among other things, (i) commitments to support, and take all commercially reasonable actions necessary or reasonably requested to facilitate, the consummation of the contemplated exchange transactions in accordance with the terms, conditions and applicable deadlines set forth in the Support Agreement, (ii) commitments by the parties to negotiate in good faith to finalize the documents and agreements effectuating such exchange transactions and (iii) for the Holding Companies to commence such exchange transactions no later than February 5, 2023.

The Support Agreement provides that no fees, premiums or direct or minimum allocations would be paid or provided to the Supporting Holders that will not be offered to other holders of the applicable debt obligations.

Related Party Transactions

Based on a Schedule 13D/A filed with the SEC on January 4, 2023 by Glendon Capital Management, L.P.

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

Based on Schedule 13D/A filed with the SEC on January 23, 2023 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.

A representative of the Glendon Investor and a representative of the Monarch Investor served as directors of Pyxus at the time the Company and its applicable subsidiaries entered into the Initial DDTL Credit Facility Agreement, the Amendment and Restatement Agreement, the DDTL Credit Agreement and the Support Agreement, effected borrowings under the Initial DDTL Facility Credit Agreement and the DDTL Credit Agreement and the guaranty transactions described above, and commenced the offers to effect the exchange transactions contemplated by the Support Agreement.

The Initial DDTL Facility Credit Agreement, the Amendment and Restatement Agreement, the DDTL Credit Agreement and any and all borrowings under the Initial DDTL Facility Credit Agreement and the DDTL Credit Agreement, the guaranty transactions described above, the Support Agreement and the exchange transactions contemplated by the Support Agreement 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.

Securitized Receivables

1 unchanged sentence

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

As of December 31, 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 September 30, 2022, the investment limit under the second facility was $ 80,000 of trade receivables.

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

As of December 31, 2022, the investment limit under the second facility was $ 110,000 of trade receivables.

As of December 31, 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 September 30, 2022 and 2021, and March 31, 2022, trade

receivables, net in the condensed consolidated balance sheets has been reduced by $ 5,108 , $ 4,843 , and $ 1,872 as a result of the net settlement, respectively.

As of December 31, 2022 and 2021, and March 31, 2022, trade receivables, net in the condensed consolidated balance sheets has been reduced by $ 12,280 , $ 2,730 , and $ 1,872 as a result of the net settlement, respectively.

Refer to " Note 16.

1 unchanged sentence

The following summarizes the Company's accounts receivable outstanding in the securitization facilities, which represents trade receivables sold into the program that have not been collected from the customer, and related beneficial interests, which represents the Company's residual interest in receivables sold that have not been collected from the customer:

September 30, 2022 September 30, 2021 March 31, 2022

December 31, 2022 December 31, 2021 March 31, 2022

Receivables outstanding in facility $ 270,042 $ 105,175 $ 131,092

3 unchanged sentences

The following summarizes the Company's cash purchase price and deferred purchase price:

Six Months Ended

September 30,

Nine Months Ended

Cash proceeds for the period ended:

5 unchanged sentences

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

September 30, 2022 September 30, 2021 March 31, 2022

December 31, 2022 December 31, 2021 March 31, 2022

Amounts guaranteed (not to exceed) $ 129,837 $ 94,462 $ 114,208

3 unchanged sentences

Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing 113 — 15,781

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

(1) Most of the guarantees outstanding at December 31, 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 $ 1,848 and $ 2,710 from its derivative financial instruments in cost of goods and services sold for the three and six months ended September 30, 2022, respectively.

The Company recorded a net gain of $ 647 and $ 1,062 from its derivative financial instruments in cost of goods and services sold for the three and six months ended September 30, 2021, respectively.

As of September 30, 2022 and 2021, the Company recorded current derivative assets of $ 0 and $ 1,523 within other current assets and current derivative liabilities of $ 531 and $ 634 within accrued expenses and other current liabilities, respectively.

Dollar notional amount of derivative contracts outstanding as of September 30, 2022 and 2021 was $ 32,000 and $ 72,522 , respectively.

The Company recorded a net gain of $ 1,966 and $ 4,676 from its derivative financial instruments in cost of goods and services sold for the three and nine months ended December 31, 2022, respectively.

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.

As of December 31, 2022 and 2021, the Company recorded current derivative assets of $ 678 and $ 603 within other current assets and current derivative liabilities of $ 0 and $ 1,280 within accrued expenses and other current liabilities, respectively.

Dollar notional amount of derivative contracts outstanding as of December 31, 2022 and 2021 was $ 32,000 and $ 72,522 , respectively.

Fair Value Measurements

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

September 30, 2022 September 30, 2021 March 31, 2022

December 31, 2022 December 31, 2021 March 31, 2022

Level 2 Level 3 Total

12 unchanged sentences

Three Months Ended

September 30, 2022 September 30, 2021

December 31, 2022 December 31, 2021

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

5 unchanged sentences

Ending balance $ 37,650 $ 532 $ 1,752 $ 21,573 $ 2,057 $ 747

Six Months Ended

September 30, 2022 September 30, 2021

Nine Months Ended

December 31, 2022 December 31, 2021

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

5 unchanged sentences

Ending balance $ 37,650 $ 532 $ 1,752 $ 21,573 $ 2,057 $ 747

For the six months ended September 30, 2022 and 2021, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests was $ 597 and $ 826 , respectively.

For the nine months ended December 31, 2022 and 2021, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests was $ 2,252 and $ 640 , respectively.

Pension and Other Postretirement Benefits

2 unchanged sentences

Pension Plan").

Termination of the U.S.

Pension Plan is expected to occur during the three-month period ending December 31, 2022.

During the three months ended September 30, 2022, the Company settled benefits with vested participants that elected a lump sum payout and made a cash contribution of $ 5,300 to fully fund the U.S.

During the nine months ended December 31, 2022, the Company settled benefits with vested participants that elected a lump sum payout and made a cash contribution of $ 5,300 to fully fund the U.S.

Pension Plan's liabilities in preparation to purchase a group annuity contract to administer future payments to the remaining U.S.

Pension Plan participants.

In addition, the Company recorded a pension settlement charge of $ 2,588

during the three months ended September 30, 2022, which included the reclassification of unrecognized pension gains within accumulated other comprehensive loss within the Company's condensed consolidated statements of operations.

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

pension plans is approximately $ 3,839 at September 30, 2022.

In addition, the Company recorded a pension settlement charge of $ 2,588 during the nine months ended December 31, 2022, which included the reclassification of unrecognized pension gains within accumulated other comprehensive loss within the Company's condensed consolidated statements of operations.

Termination of the U.S.

Pension Plan occurred during the three-month period ended December 31, 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 September 30, 2022, the assessment for intrastate trade tax credits taken is $ 2,436 and the total assessment including penalties and interest is $ 9,218 .

At December 31, 2022, the assessment for intrastate trade tax credits taken is $ 2,524 and the total assessment including penalties and interest is $ 9,689 .

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 September 30, 2022, the assessment for intrastate trade tax credits taken is $ 2,107 and the total assessment including penalties and interest is $ 5,936 .

At December 31, 2022, the assessment for intrastate trade tax credits taken is $ 2,184 and the total assessment including penalties and interest is $ 6,151 .

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

3 unchanged sentences

The Company has an agreement with the state government regarding the amounts and timing of credits that can be sold.

The tax credits have a carrying value of $ 15,456 .

The tax credits have a

carrying value of $ 13,535 .

The intrastate trade tax credits are monitored for impairment in future periods based on market conditions and the Company’s ability to use or sell the tax credits.

6 unchanged sentences

The following summarizes sales and purchases transactions with related parties:

Three Months Ended Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2022 2021 2022 2021

2 unchanged sentences

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

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

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

Accounts receivable, related parties $ 770 $ 1,283 $ 1,896 Other receivables

7 unchanged sentences

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.

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 12.

became a lender under the Initial DDTL Facility.

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

On June 2, 2022, Intabex, the Company and the DDTL Parent Guarantors entered into the Amendment and Restatement Agreement with the DDTL Facility Lenders and the DDTL Agent to amend and restate the Initial DDTL Facility Credit Agreement as set forth in the DDTL Credit Agreement, which became effective on July 28, 2022 (see " Note 12.

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.

In connection with the effectiveness of the DDTL Credit Agreement, certain funds managed by Glendon Capital Management, L.P.

(the "Glendon Investor"), certain funds managed by Monarch Alternative Capital LP (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 Initial 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.

Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of September 30, 2022 and 2021, and March 31, 2022, includes $ 4,085 , $ 4,369 , 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 $ 8,133 and $ 16,230 for the three and six months ended September 30, 2022, respectively, and $ 8,537 and $ 16,036 for the three and six months ended September 31, 2021, respectively, that relates to the Glendon Investor, the Monarch Investor, and funds 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 DDTL Loan Lenders in connection with the aggregate $ 97,500 principal amount of the DDTL Term Loans made by them of the total $ 100,000 aggregate principal amount of the DDTL Term Loans made by all DDTL Loan Lenders.

Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of December 31, 2022 and 2021, and March 31, 2022, includes $ 7,649 , $ 6,039 , 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 $ 9,264 and $ 25,494 for the three and nine months ended December 31, 2022, respectively, and $ 8,530 and $ 24,566 for the three and nine months ended December 31, 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

In connection with the CCAA Proceeding, the DIP Lender, another non-U.S.

In connection with the CCAA Proceeding, the DIP Lender, a non-U.S.

subsidiary of the Company, provided Figr Brands with secured debtor-in-possession financing 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.

3 unchanged sentences

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 Six Months Ended

September 30, September 30,

Three Months Ended Nine Months Ended

December 31, December 31,

2022 2021 2022 2021

8 unchanged sentences

Restructuring and asset impairment charges 35 560 4,380 7,652

Goodwill impairment — 372 — 372

Consolidated operating income $ 41,607 $ 30,222 $ 75,695 $ 43,880

September 30, 2022 September 30, 2021 March 31, 2022

December 31, 2022 December 31, 2021 March 31, 2022

Segment assets:

3 unchanged sentences

Subsequent Events

Securitized Receivables

On November 3, 2022, the investment limit of the second securitization facility described in " Note 13.

Securitized Receivables " was increased from $ 80,000 to $ 110,000 of trade receivables.

Debt Exchange Transactions

As contemplated by the Support Agreement described in " Note 12 .

Debt Arrangements ", on January 5, 2023, the Holding Companies commenced a set of exchange transactions (collectively, the "Exchange Transactions") in which, among other things:

• Each holder of the DDTL Facility Loans was offered the opportunity to exchange all of its DDTL Facility Loans for (i) an equal principal amount of new senior secured term loans due December 31, 2027 with Pyxus Holdings as the borrower (the "New Intabex Loans") and (ii) additional New Intabex Loans in a principal amount equal to 2 % of the principal amount of such holder’s exchanged DDTL Facility Loans on account of the exit fee that would be payable under certain circumstances on the repayment of the DDTL Facility Loans (the "DDTL Facility Loans Exchange Offer");

• Each holder of the Exit Facility Loans was offered the opportunity to exchange (i) 40 % of its Exit Facility Loans for an equal principal amount of New Intabex Loans and (ii) 60 % of its Exit Facility Loans for an equal principal amount of new senior secured term loans due December 31, 2027 with Pyxus Holdings as the borrower (the "New Pyxus Loans" and, together with the New Intabex Loans, the "New Term Loans");

provided that, if less than all holders of Exit Facility Loans participate in the Exchange Transactions the amount of New Intabex Loans reserved for the non-participating holders was be allocated ratably to the participating holders (and the amount of New Pyxus Loans to be issued to participating holders shall be reduced commensurately) (the "Exit Facility Loans Exchange Offer");

• Eligible holders of the Existing Notes being offered the opportunity to exchange any and all of their Existing Notes for an equal principal amount of new 8.50 % Senior Secured Notes due December 31, 2027 (the "New Notes" and, together with the New Term Loans, the "New Secured Debt") to be issued pursuant to an exchange offer conducted by Pyxus Holdings (the "Notes Exchange Offer");

• In conjunction with the Notes Exchange Offer, Pyxus Holdings solicited consents from holders of the Existing Notes to amend the Existing Notes Indenture, the Existing Notes and the related intercreditor and security documents as necessary to, among other things, (i) eliminate most of the restrictive covenants and certain of the affirmative covenants in the Existing Notes Indenture, (ii) eliminate the change of control repurchase obligation in the Existing Notes Indenture, (iii) subordinate the Existing Notes in right of payment to existing and future senior indebtedness (including the New Secured Debt), (iv) eliminate certain events of default and (v) release all of the collateral securing the Existing Notes;

• In conjunction with the Exit Facility Loans Exchange Offer, Pyxus Holdings solicited consents from holders of the Exit Facility Loans to amend the agreements governing such loans and any related intercreditor and security documents as necessary to, among other things, (i) eliminate most of the restrictive covenants, certain of the affirmative covenants and the mandatory prepayments in the Exit Term Loan Credit Agreement, (ii) make junior in priority of payment the Exit Facility Loans to the payment in full of the New Secured Debt and (iii) eliminate certain events of default;

• In conjunction with the DDTL Facility Loans Exchange Offer, Pyxus Holdings solicited consents from holders of the DDTL Facility Loans to amend the agreements governing such loans and any related intercreditor and security documents as necessary to, among other things, (i) eliminate most of the restrictive covenants and certain of the affirmative covenants in the DDTL Credit Agreement, (ii) make junior in priority of payment the DDTL Facility Loans to the payment in full of the New Intabex Loans and (iii) eliminate certain events of default;

• The Company solicited consents from lenders under the ABL Credit Agreement to amend the ABL Credit Agreement and the related intercreditor agreement (the "ABL Intercreditor Agreement") as necessary to, among other things, (i) modify certain covenants and (ii) give effect to and permit the other Exchange Transactions.

On February 6, 2023 (the "Settlement Date"), the Holding Companies and certain other of the Company’s direct and indirect subsidiaries completed the Exchange Transactions, that included, among other things:

• the election by holders of 100 % of the DDTL Facility Loans to exchange all of their DDTL Facility Loans in the DDTL Facility Exchange);

• the election by holders of 100 % of the Exit Facility Loans to exchange their Exit Facility Loans in Exit Facility Exchange;

• the election by holders of approximately 92.7 % of the aggregate principal amount of the Existing Notes to exchange all of their Existing Notes in the Notes Exchange.

In conjunction with the Notes Exchange, Pyxus Holdings received consents from requisite holders of Existing Notes to amend the Existing Notes Indenture, the Existing Notes and the related intercreditor and security documents as necessary to, among other things, (i) eliminate most of the restrictive covenants and certain of the affirmative covenants in the Existing Notes Indenture, (ii) eliminate the change of control repurchase obligation in the Existing Notes Indenture, (iii) subordinate the Existing Notes in right of payment to existing and future senior indebtedness (including the New Secured Debt), (iv) eliminate certain events of default and (v) release all of the collateral securing the Existing Notes.

The Holding Companies also entered into an amendment to the ABL Credit Agreement to, among other things, (i) permit the incurrence of the New Secured Debt (and the related liens and priorities) and the Exchange Transactions, to the extent applicable, and (ii) modify certain covenants to be substantially consistent with those governing the New Secured Debt.

The debt arrangements effected by and in connection with the Exchange Transactions are described in more detail below.

New Intabex Credit Facility

On the Settlement Date, Pyxus Holdings entered into the Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "New Intabex Credit Agreement"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus (US) LLC ("Alter Domus"), as administrative agent and senior collateral agent, to establish a term loan credit facility in an aggregate principal amount of approximately $ 189.0 million (the "New Intabex Credit Facility"), under which the New Intabex Loans were deemed made in exchange for (x) $ 100.0 million principal amount of DDTL Term Loans (plus an additional $ 2.0 million on account of the exit fee payable thereunder) pursuant to the DDTL Facility Exchange and (y) approximately $ 87.0 million principal amount of Existing Term Loans, representing 40 % of the outstanding principal amount thereof (plus the applicable accrued and unpaid PIK interest thereon) pursuant to the Exit Facility Exchange.

Borrowings under the New Intabex Credit Facility bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.50 %) plus 8.00 % per annum or (ii) an alternate base rate plus 7.00 % per annum.

The New Intabex Credit Facility is stated to mature on December 31, 2027.

The New Intabex Credit Facility may be prepaid from time to time, in whole or in part, without prepayment or penalty.

With respect to alternate base rate loans, accrued interest is payable quarterly in arrears on the last business day of each calendar quarter and, with respect to SOFR loans, accrued interest is payable on the last day of each applicable interest period but no less frequently than every three months.

The New Intabex Credit Agreement 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 and its restricted subsidiaries’ 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;

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

enter into transactions with affiliates;

and designate subsidiaries as unrestricted subsidiaries.

New Pyxus Credit Facility

On the Settlement Date, Pyxus Holdings entered into the Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the "New Pyxus Credit Agreement"), by and among, Pyxus Holdings, the guarantors party thereto, the lenders party thereto and Alter Domus, as administrative agent and senior collateral agent, to establish a term loan credit facility in an aggregate principal amount of approximately $ 130.5 million (the "New Pyxus Credit Facility"), under which the New Term Loans were deemed made in exchange for 60 % of the outstanding principal amount of Existing Term Loans (plus the applicable accrued and unpaid PIK interest thereon) pursuant to the Exit Facility Exchange.

Borrowings under the New Pyxus Credit Facility bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.50 %) plus 8.00 % per annum or (ii) an alternate base rate plus 7.00 % per annum.

The New Pyxus Credit Facility is stated to mature on December 31, 2027.

The New Pyxus Credit Facility may be prepaid from time to time, in whole or in part, without prepayment or penalty.

The New Pyxus Credit Agreement 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

and its restricted subsidiaries’ 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;

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

enter into transactions with affiliates;

and designate subsidiaries as unrestricted subsidiaries.

New 8.50% Senior Secured Notes due 2027

On the Settlement Date, Pyxus Holdings issued approximately $ 260.5 million in aggregate principal amount of the New Notes to the exchanging holders of the Existing Notes, pursuant to the Indenture, dated as of February 6, 2023 (the "New Notes Indenture"), among Pyxus Holdings, the guarantors party thereto, and Wilmington Trust, National Association, as trustee, and Alter Domus, as collateral agent.

The New Notes bear interest at a rate of 8.50 % per annum, which interest is computed on the basis of a 360-day year comprised of twelve 30-day months.

Interest accrues on the New Notes from the Settlement Date and is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2023.

The New Notes are stated to mature on December 31, 2027.

At any time from time to time, Pyxus Holdings may redeem the New Notes, in whole or in part, at a redemption price equal to 100 % of the principal amount of New Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

The New Notes Indenture contains customary affirmative and negative covenants (subject, in each case, to exceptions and qualifications) and events of defaults, including covenants that limit the Company’s and its restricted subsidiaries’ 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;

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

enter into transactions with affiliates;

and designate subsidiaries as unrestricted subsidiaries.

The New Notes and the guarantees thereof have not been and will not be registered under the Securities Act or any state or other securities laws.

The New Notes may not be offered or sold except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act and the applicable state securities laws.

Guarantees and Collateral

The obligations of Pyxus Holdings under the New Secured Debt are fully and unconditionally guaranteed by the Company, Pyxus Parent and all of the Company’s domestic subsidiaries and certain of the Company’s foreign subsidiaries, subject to certain limitations (the "New Secured Debt Obligors").

In addition, under the New Intabex Credit Facility, Intabex and Alliance One International Tabak B.V.

(which were obligors under the DDTL Facility Loans) also guarantee the New Intabex Credit Facility (together, the "Specified Intabex Obligors") but do not guarantee the New Notes, the New Pyxus Loans or the ABL Credit Agreement.

In addition, certain assets of the Specified Intabex Obligors (which were pledged as collateral for the DDTL Facility Loans) are pledged as collateral to secure the New Intabex Loans (the "Intabex Collateral") but do not secure the New Notes, the New Pyxus Loans or the ABL Credit Agreement.

The New Secured Debt is secured by (i) a first-priority lien on substantially all assets of the New Secured Debt Obligors other than certain exclusions and certain collateral for which obligations under the ABL Credit Agreement are secured on a first-priority basis (the "ABL Priority Collateral") and (ii) a second-priority lien on the ABL Priority Collateral.

The New Intabex Loans are further secured by a first-priority lien on the Intabex Collateral.

The New Secured Debt shares a single lien, held by Alter Domus, as senior collateral agent (the "Senior Collateral Agent"), on the Collateral (excluding the Intabex Collateral) subject to the payment waterfall pursuant to the intercreditor arrangements described below.

Intercreditor and Collateral Agency Agreement

On the Settlement Date, the New Secured Debt Obligors, together with the representative for the holders of the New Secured Debt and the Senior Collateral Agent, entered into the Intercreditor and Collateral Agency Agreement, dated as of February 6, 2023 (the "Intercreditor and Collateral Agency Agreement"), pursuant to which the Senior Collateral Agent, serves as joint collateral agent for the benefit of the holders of the New Notes, the New Pyxus Loans and the New Intabex Loans with respect to all common collateral securing such indebtedness (the "Collateral";

which, for the avoidance of doubt, excludes Intabex Collateral).

The Intercreditor and Collateral Agency Agreement provides that any Collateral or proceeds thereof received in connection with or upon the exercise of any secured creditor remedies will be distributed (subject to the provisions described in the next paragraph) first to holders of the New Notes and the New Term Loans on a pro rata basis, and then to holders of any future junior debt secured by such Collateral on a pro rata basis (and in each case permitted refinancing indebtedness thereof).

Exercise of rights and remedies against the Collateral and certain rights in a bankruptcy or insolvency proceeding (including the right to object to debtor-in-possession financing or to credit bid) by the Senior Collateral Agent will be controlled first by the holders of a majority in principal amount of the New Term Loans (including, in any event, each holder holding at least 20% of

the New Term Loans as of the Settlement Date, provided such holder holds at least 15% of the New Term Loans as of the date of determination), second, after repayment in full of the New Term Loans, by the holders of a majority in principal amount of the New Notes and last, after repayment in full of the New Term Loans and the New Notes, by holders of a majority in principal amount of any future junior debt secured by the Collateral.

Any such future junior debt will be subject to certain customary waivers of rights in a bankruptcy or insolvency proceeding in favor of the Senior Collateral Agent, including, but not limited to, with respect to debtor-in-possession financing, adequate protection and credit bidding.

Limited Consent and Amendment to ABL Credit Agreement

On January 5, 2023, Pyxus Holdings entered into the Limited Consent and Amendment to the ABL Credit Agreement (the "ABL Amendment"), which became effective concurrently with the consummation of the Exchange Transactions on the Settlement Date and which among other things, (i) permits the incurrence of the New Secured Debt and the related liens and priorities and the Exchange Transactions, to the extent applicable, and (ii) modifies certain covenants to be substantially consistent with those governing the New Secured Debt.

In addition, on the Settlement Date, the New Secured Debt Obligors entered into the amended and restated intercreditor agreement, dated as of February 6, 2023 (the "Amended and Restated Intercreditor Agreement"), to amend and restate the intercreditor agreement, dated as of August 24, 2020, to govern the relative rights of the ABL Facility on the one hand, and the New Secured Debt on the other hand, in the Collateral.

The ABL Facility retains a senior lien on all ABL Priority Collateral while the New Secured Debt has a senior lien on all Collateral other than the ABL Priority Collateral.

Second Supplemental Indenture to the Existing Notes Indenture

On the Settlement Date, Pyxus Holdings entered into the Second Supplemental Indenture, dated as of February 6, 2023 (the "Existing Notes Supplemental Indenture"), to the Existing Notes Indenture, pursuant to which the Existing Notes Indenture, the Existing Notes and the related intercreditor and security documents were amended to, among other things, (i) eliminate most of the restrictive covenants and certain of the affirmative covenants in the Existing Notes Indenture, (ii) eliminate the change of control repurchase obligation in the Existing Notes Indenture, (iii) subordinate the Existing Notes in right of payment to existing and future senior indebtedness (including the New Secured Debt), (iv) eliminate certain events of default and (v) release all of the collateral securing the Existing Notes.

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