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Item 1. Financial Statements

2024-08-07 compared with 2024-02-14 · 227 added, 246 removed, 391 unchanged (55% of the section changed)

3 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended Nine Months Ended

December 31, December 31,

Three Months Ended

(in thousands, except per share data) 2024 2023

6 unchanged sentences

Operating income 40,457 36,418

Loss on deconsolidation/disposition of subsidiaries — — — 648

Loss on pension settlement 12,008 — 12,008 2,588

Gain on debt retirement 1,323 —

Interest expense, net 33,272 30,844

Income (loss) before income taxes and other items 3,757 10,246 22,674 ( 13,190 )

Income before income taxes and other items 8,508 5,574

Income tax expense 6,119 2,646

Income from unconsolidated affiliates 6,578 5,404 6,531 10,708

Net income (loss) 4,179 ( 2,237 ) 12,845 ( 18,292 )

Net income attributable to noncontrolling interests 344 96 111 241

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

(Income) loss from unconsolidated affiliates, net ( 2,563 ) 2,158

Net income 4,952 770

Net income (loss) attributable to noncontrolling interests 310 ( 34 )

Net income attributable to Pyxus International, Inc.

$ 4,642 $ 804

Earnings (loss) per share:

Basic and diluted $ 0.15 $ ( 0.09 ) $ 0.51 $ ( 0.74 )

Earnings per share:

Basic $ 0.18 $ 0.03

Diluted $ 0.18 $ 0.03

Weighted average number of shares outstanding:

Basic and diluted 25,000 25,000 25,000 25,000

Basic 25,461 25,000

Diluted 25,461 25,000

See "Notes to Condensed Consolidated Financial Statements"

1 unchanged sentence

and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended Nine Months Ended

December 31, December 31,

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended

(in thousands) 2024 2023

Net income (loss) $ 4,179 $ ( 2,237 ) $ 12,845 $ ( 18,292 )

Other comprehensive income (loss), net of tax:

Net income $ 4,952 $ 770

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment 543 707

Pension and other postretirement benefit plans 3,511 ( 78 ) 3,511 ( 1,640 )

Cash flow hedges ( 2,237 ) 862

Total other comprehensive income (loss), net of tax 4,408 4,406 3,432 ( 4,281 )

Total comprehensive income (loss) 8,587 2,169 16,277 ( 22,573 )

Comprehensive income attributable to noncontrolling interests 344 96 111 241

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

Total other comprehensive (loss) income, net of tax ( 1,694 ) 1,569

Total comprehensive income 3,258 2,339

Comprehensive income (loss) attributable to noncontrolling interests 310 ( 34 )

Comprehensive income attributable to Pyxus International, Inc.

$ 2,948 $ 2,373

3 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands) December 31, 2023 December 31, 2022 March 31, 2023

(in thousands) June 30, 2024 June 30, 2023 March 31, 2024

Current assets

10 unchanged sentences

Investments in unconsolidated affiliates 103,818 98,591 101,255

Other intangible assets, net 35,030 39,732 38,572

Intangible assets, net 32,728 37,412 33,879

Deferred income taxes, net 8,947 8,879 7,196

25 unchanged sentences

Authorized shares ( 250,000 for all periods)

Issued shares ( 25,000 for all periods)

Issued and outstanding shares ( 25,000 for all periods)

$ 392,820 $ 390,290 $ 389,789

Retained deficit ( 250,649 ) ( 257,150 ) ( 255,291 )

Accumulated other comprehensive income (loss) 8,947 ( 477 ) 5,515

Accumulated other comprehensive income 6,092 7,084 7,786

Total stockholders’ equity of Pyxus International, Inc.

8 unchanged sentences

Attributable to Pyxus International, Inc.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income

(in thousands) Common

4 unchanged sentences

Balance, March 31, 2024 $ 389,789 $ ( 255,291 ) $ ( 5,692 ) $ 12,766 $ 712 $ 4,539 $ 146,823

Net income (loss) — 804 — — — ( 34 ) 770

Other comprehensive income, net of tax — — 707 — 862 — 1,569

Balance, June 30, 2023 $ 390,290 $ ( 257,150 ) $ ( 5,685 ) $ 8,335 $ 4,434 $ 3,945 $ 144,169

Net income (loss) — 8,095 — — — ( 199 ) 7,896

Other — — — — — 493 493

Other comprehensive loss, net of tax — — ( 1,545 ) — ( 1,000 ) — ( 2,545 )

Balance, September 30, 2023 $ 390,290 $ ( 249,055 ) $ ( 7,230 ) $ 8,335 $ 3,434 $ 4,239 $ 150,013

Net income — 4,642 — — — 310 4,952

Other ( 501 ) — — — — 8 ( 493 )

Dividends paid — — — — — ( 450 ) ( 450 )

Other comprehensive income (loss), net of tax — — 2,185 3,511 ( 1,288 ) — 4,408

Balance, December 31, 2023 $ 389,789 $ ( 245,220 ) $ ( 5,045 ) $ 11,846 $ 2,146 $ 4,141 $ 157,657

Equity-based compensation 3,031 — — — — — 3,031

Other comprehensive (loss) income, net of tax — — 543 — ( 2,237 ) — ( 1,694 )

Balance, June 30, 2024 $ 392,820 $ ( 250,649 ) $ ( 5,149 ) $ 12,766 $ ( 1,525 ) $ 4,849 $ 153,112

Balance, March 31, 2023 $ 390,290 $ ( 257,954 ) $ ( 6,392 ) $ 8,335 $ 3,572 $ 3,979 $ 141,830

Net (loss) income — ( 14,663 ) — — — 158 ( 14,505 )

Other — — — — — ( 3,052 ) ( 3,052 )

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

Net income (loss) — 804 — — — ( 34 ) 770

Other comprehensive income, net of tax — — 707 — 862 — 1,569

Balance, June 30, 2023 $ 390,290 $ ( 257,150 ) $ ( 5,685 ) $ 8,335 $ 4,434 $ 3,945 $ 144,169

Net loss — ( 1,537 ) — — — ( 13 ) ( 1,550 )

Other comprehensive loss, net of tax — — ( 4,801 ) ( 1,562 ) ( 1,768 ) — ( 8,131 )

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

Net (loss) income — ( 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

See "Notes to Condensed Consolidated Financial Statements"

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

(in thousands) December 31, 2023 December 31, 2022

Three Months Ended

(in thousands) 2024 2023

Operating Activities:

Net income (loss) $ 12,845 $ ( 18,292 )

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

Net income $ 4,952 $ 770

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 5,127 4,606

Debt amortization/interest 2,828 2,682

Gain on debt retirement ( 1,323 ) —

Loss on foreign currency transactions 978 1,926

Asset impairment charges — 4,035

Loss on deconsolidation/disposition of subsidiaries — 648

Loss on pension settlement 12,008 2,588

Income from unconsolidated affiliates, net of dividends 7,129 814

Equity-based compensation 3,031 —

(Income) loss from unconsolidated affiliates, net of dividends ( 2,563 ) 2,158

Changes in operating assets and liabilities, net

12 unchanged sentences

Purchases of property, plant, and equipment $ ( 5,097 ) $ ( 3,661 )

Proceeds from sale of property, plant, and equipment 3,602 2,213

Collections from beneficial interests in securitized trade receivables 31,741 30,419

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

Other, net 1,304 283

2 unchanged sentences

Net proceeds from short-term borrowings $ 182,001 $ 205,879

Repayment of DDTL facility — ( 110,250 )

Proceeds from term loan facility — 100,000

Proceeds from revolving loan facilities 130,000 65,000

1 unchanged sentence

Debt issuance costs ( 2,662 ) ( 3,462 )

Fees paid to refinance the DDTL facility — ( 4,000 )

Repayment of long-term borrowings ( 9,104 ) —

Other, net 64 ( 34 )

1 unchanged sentence

Effect of exchange rate changes on cash ( 761 ) ( 2,158 )

(Decrease) increase in cash, cash equivalents, and restricted cash ( 44,222 ) 17,071

Decrease in cash, cash equivalents, and restricted cash ( 10,690 ) ( 33,408 )

Cash and cash equivalents at beginning of period 92,569 136,733

1 unchanged sentence

Cash, cash equivalents, and restricted cash at end of period $ 89,103 $ 105,501

Pyxus International, Inc.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

(in thousands) December 31, 2023 December 31, 2022

Other information:

Cash paid for income taxes, net $ 2,679 $ 2,542

Cash paid for income taxes related to debt exchange 12,543 —

Cash paid for interest, net 30,833 25,693

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share data)

(in thousands, except per share data) Page Number

Basis of Presentation and Summary of Significant Accounting Policies

1 unchanged sentence

Revenue Recognition

Restructuring and Asset Impairment Charges

Earnings (Loss) Per Share

Earnings Per Share

Restricted Cash

Inventories, Net

1 unchanged sentence

Variable Interest Entities

Other Intangible Assets, Net

Intangible Assets, Net

Debt Arrangements

2 unchanged sentences

Fair Value Measurements

Pension and Other Postretirement Benefits

Contingencies and Other Information

Equity-Based Compensation

Related Party Transactions

Segment Information

Subsequent Events

Basis of Presentation and Summary of Significant Accounting Policies

22 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating the impact that this new accounting standard will have on its segment disclosures.

This new rule will result in additional disclosures for segment reporting, and does not have an impact on the Company's financial condition, results of operations, or cash flows.

In December 2023, the FASB issued ASU No.

8 unchanged sentences

Product revenue is primarily from the sale of processed tobacco to customers.

Processing and other revenues are mainly derived via contracts to process customer-owned green tobacco.

Processing and other revenues are mainly contracts to process customer-owned green tobacco.

During such processing, ownership remains with the customers.

1 unchanged sentence

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 Nine Months Ended

December 31, December 31,

2023 2022 2023 2022

Three Months Ended

Product revenue $ 589,217 $ 450,938

4 unchanged sentences

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

Three Months Ended Nine Months Ended

December 31, December 31,

2023 2022 2023 2022

Three Months Ended

Balance, beginning of period $ ( 23,940 ) $ ( 24,730 )

4 unchanged sentences

Trade receivables, net $ 209,053 $ 185,467

Restructuring and Asset Impairment Charges

The Company continued its focus on cost-saving initiatives.

The employee separation and asset impairment charges for the periods ended December 31, 2023 were primarily related to changes in the corporate organizational structure 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 following summarizes the Company's restructuring and asset impairment charges:

Three Months Ended Nine Months Ended

December 31, December 31,

2023 2022 2023 2022

Employee separation charges $ 85 $ 35 $ 1,379 $ 345

Asset impairment and other non-cash charges — — — 4,035

Restructuring and asset impairment charges $ 85 $ 35 $ 1,379 $ 4,380

For each period presented, the Company's quarterly provision for income taxes is not calculated using the annual effective tax rate method ("AETR method"), which applies an estimated annual effective tax rate to pre-tax income or loss.

1 unchanged sentence

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

Using the discrete method, the Company determined income tax expense as if each of the nine-month interim periods reported were an annual period.

The effective tax rate for the nine months ended December 31, 2023 and 2022 was 72.2 % and ( 119.9 )%, respectively.

For the nine months ended December 31, 2023, the difference between the Company’s effective rate and the U.S.

statutory rate of 21.0% is primarily due to increases in the Company's deferred tax valuation allowances, liability for unrecognized tax benefits, and variations in the jurisdictional mix of earnings.

Earnings (Loss) Per Share

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

Three Months Ended Nine Months Ended

December 31, December 31,

Using the discrete method, the Company determined income tax expense as if each of the three-month interim periods reported were an annual period.

The effective tax rate for the three months ended June 30, 2024 and 2023 was 71.9 % and 47.5 %, respectively.

For the three months ended June 30, 2024, the difference between the Company’s effective rate and the U.S.

statutory rate of 21.0% is primarily due to U.S.

taxation of foreign earnings partially offset by foreign tax credits and additional unrecognized tax benefits reserves.

Earnings Per Share

The calculations of basic and diluted earnings per share are based on net income divided by the basic weighted average number of common shares and diluted weighted average number of common shares outstanding, respectively.

Under the treasury stock method, restricted stock units will have a dilutive effect when the respective period's average market price of the Company's common stock exceeds the assumed exercise proceeds and the average amount of cost not yet recognized.

Performance based stock units are included in diluted earnings per share if the performance targets have been met at the end of the reporting period.

Share-based payment awards that provide contingently issuable shares upon a performance or market condition are included in basic and diluted earnings per share only if the condition is met as of the end of the reporting period.

The following summarizes the computation of earnings per share:

Three Months Ended

Net income attributable to Pyxus International, Inc.

$ 4,642 $ 804

Basic and diluted earnings (loss) per share:

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

Basic weighted average shares outstanding (1)

25,461 25,000

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

Basic and diluted earnings (loss) per share $ 0.15 $ ( 0.09 ) $ 0.51 $ ( 0.74 )

Dilutive equity awards (2)

Diluted weighted average shares outstanding 25,461 25,000

Earnings per share:

Basic $ 0.18 $ 0.03

Diluted $ 0.18 $ 0.03

(1) For the three months ended June 30, 2024, the basic weighted average shares outstanding are adjusted to include 461 weighted average shares outstanding, representing the underlying shares associated with the time-vesting restricted stock units granted prior to May 10, 2024 that were modified on such date to remove the market condition.

Refer to " Note 17.

Equity-Based Compensation " for additional information.

(2) For the three months ended June 30, 2024, the weighted average number of outstanding restricted stock units not included in the computation of diluted earnings per share because their effect would be antidilutive is 17 .

Restricted Cash

The following summarizes the composition of restricted cash:

June 30, 2024 June 30, 2023 March 31, 2024

Compensating balance for short-term borrowings $ 542 $ 439 $ 516

Escrow 3,209 2,344 2,647

Grants 1,158 696 1,375

Other 2,152 $ 1,977 $ 2,686

Total $ 7,061 $ 5,456 $ 7,224

Inventories, Net

The following summarizes the composition of inventories, net:

December 31, 2023 December 31, 2022 March 31, 2023

June 30, 2024 June 30, 2023 March 31, 2024

Processed tobacco $ 605,535 $ 642,745 $ 585,280

4 unchanged sentences

Equity Method Investments

The following summarizes the Company's equity method investments as of December 31, 2023:

The following summarizes the Company's equity method investments as of June 30, 2024:

Investee Name Location Primary Purpose Ownership Percentage Basis Difference (1)

9 unchanged sentences

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

(1) Basis differences for the Company's equity method investments were due to fair value adjustments recorded during fiscal 2021.

The following summarizes financial information for these equity method investments:

Three Months Ended Nine Months Ended

December 31, December 31,

2023 2022 2023 2022

Operations statement:

Three Months Ended

Statement of operations:

Sales $ 56,771 $ 44,831

Gross profit 7,187 7,185

Net income 14,066 11,625 15,222 23,867

Company's dividends received — — 13,660 11,523

December 31, 2023 December 31, 2022 March 31, 2023

Net income (loss) 5,239 ( 3,854 )

June 30, 2024 June 30, 2023 March 31, 2024

Balance sheet:

7 unchanged sentences

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

December 31, 2023 December 31, 2022 March 31, 2023

June 30, 2024 June 30, 2023 March 31, 2024

Investments in variable interest entities $ 96,903 $ 91,587 $ 94,609

1 unchanged sentence

Guaranteed amounts to variable interest entities (not to exceed) 16,392 61,041 11,113

Other Intangible Assets, Net

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

Nine Months Ended December 31, 2023

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

Intangible Assets, Net

The gross carrying amount and accumulated amortization of intangible assets consist of the following:

June 30, 2024

Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net

Intangibles subject to amortization:

3 unchanged sentences

Total $ 50,349 $ ( 17,621 ) $ 32,728

Year Ended March 31, 2023

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

June 30, 2023

Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net

Intangibles subject to amortization:

3 unchanged sentences

Total $ 50,533 $ ( 13,121 ) $ 37,412

March 31, 2024

Weighted Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Intangible Assets, Net

Intangibles subject to amortization:

Customer relationships 8.4 years $ 26,101 $ ( 7,794 ) $ 18,307

Technology 4.4 years 12,948 ( 5,784 ) 7,164

Trade names 10.4 years 11,300 ( 2,892 ) 8,408

Total $ 50,349 $ ( 16,470 ) $ 33,879

The following summarizes amortization expense for definite-lived intangible assets:

Three Months Ended

Amortization expense $ 1,151 $ 1,160

Debt Arrangements

The following summarizes debt and notes payable:

December 31, December 31, March 31,

(in thousands) Interest Rate 2023 2022 2023

(in thousands) Interest Rate June 30, 2024 June 30, 2023 March 31, 2024

Senior secured credit facilities:

1 unchanged sentence

$ 44,000 $ 50,000 $ —

Term Loan Facility (2)

Senior secured notes:

8 unchanged sentences

122,268 133,284 132,819

Exit Facility Loans (7)

Other long-term debt 8.7 % (1)

8 unchanged sentences

Letters of credit $ 7,669 $ 6,018 $ 5,070

(1) Weighted average rate for the trailing twelve months ended December 31, 2023 or, for indebtedness outstanding only during a portion of such twelve-month period, for the portion of such period that such indebtedness was outstanding.

(2) The amount outstanding at December 31, 2022 is net of original issue discount of $ 2,823 .

This Term Loan Facility was established through the refinancing of the DDTL Facility on July 28, 2022, which included a partial principal payment of $ 9,000 and an exit fee payment of $ 5,250 .

Subsequent to this refinancing, on February 6, 2023, the Term Loan Facility was exchanged for $ 102,000 (inclusive of a $ 2,000 exit fee) of Intabex Term Loans.

(3) On February 6, 2023, $ 260,452 of the 10.0 % Notes due 2024 were exchanged for 8.5 % Notes due 2027.

The remaining 10.0 % Notes due 2024 outstanding of $ 20,169 is net of a debt discount of $ 222 , and are reported in the current portion of long-term debt.

(1) Weighted average rate for the trailing twelve months ended June 30, 2024 or, for indebtedness outstanding only during a portion of such twelve-month period, for the portion of such period that such indebtedness was outstanding.

(2) The 10.0 % Notes due 2024 outstanding of $ 20,328 is net of a debt discount of $ 63 .

Total repayment at maturity is $ 20,391 .

5 unchanged sentences

Total repayment at maturity is $ 120,205 .

(7) On February 6, 2023, $ 189,033 , representing 40.0 % of the Exit Facility Loans, were exchanged for Intabex Term Loans, and $ 130,550 , representing the remaining 60.0 % of the Exit Facility Loans, were exchanged for Pyxus Term Loans.

(6) Primarily foreign seasonal lines of credit.

4 unchanged sentences

("Pyxus Parent"), as parent guarantors, entered into an ABL Credit Agreement (as amended, 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.

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, 2023 .

The ABL Credit Agreement was amended on May 23, 2023 to extend the maturity of the ABL Credit Facility to February 8, 2027.

The ABL Credit Agreement was amended on October 24, 2023 to, among other things:

• increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility to $ 120,000 ;

• adjust the fee payable on unused borrowing availability under the ABL Credit Facility from a rate of 0.375 % per annum to a rate of (i) 0.25 % per annum if the outstanding borrowings equal or exceed $ 60,000 and (ii) 0.375 % per annum if the outstanding borrowings are less than $ 60,000 ;

• adjust the covenant restricting the prepayment of the New Term Loans, the 2024 Notes and the 2027 Notes (as such terms are defined below) to permit prepayments, subject to an aggregate limit of $ 100,000 , based on excess borrowing availability under the ABL Credit Facility, after giving pro forma effect to the prepayment, being at least equal to a specified level, with an increased amount being permitted upon pro forma satisfaction of a minimum fixed charge coverage ratio;

• adjust the events triggering application of the cash dominion provisions of the ABL Credit Agreement, in the absence of an event of default, to be if (i) excess borrowing availability under the ABL Credit Facility (based on the lesser of the commitments thereunder and the borrowing base) falls below the greater of $ 10,000 or 10 % of the lesser of total commitments under the ABL Credit Facility at such time and the borrowing base at such time or (ii) Domestic Availability (as defined in the ABL Credit Agreement) being less than the greater of $ 20,000 or 20 % of the lesser of total commitments under the ABL Credit Facility at such time and the borrowing base at such time, with similar adjustments to the events triggering termination of the application of the cash dominion provisions.

The ABL Credit Agreement was amended on October 24, 2023 to, among other things increase the aggregate amount of the revolving loan commitments under the ABL Credit Facility to $ 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, 2024 .

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 $ 120,000 , subject to the limitations described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

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 $ 140,000 .

At December 31, 2023, the Borrowers and the parent guarantors under the ABL Credit Agreement were in compliance with the covenants under the ABL Credit Agreement.

At June 30, 2024, the Borrowers and the parent guarantors under the ABL Credit Agreement were in compliance with the covenants under the ABL Credit Agreement.

Intabex Term Loans

Pursuant to (i) an exchange offer (the "DDTL Facility Exchange") made to, and accepted by, holders of 100.0 % of the outstanding term loans (the "DDTL Term Loans") under the Amended and Restated Term Loan Credit Agreement, effectuated pursuant to that certain Amendment and Restatement Agreement, dated as of June 2, 2022 (the "DDTL Credit Agreement"), by and among Intabex Netherlands B.V., as borrower ("Intabex"), the guarantors party thereto, the administrative agent and collateral agent thereunder, and the several lenders from time to time party thereto and (ii) an exchange offer (the "Exit Facility Exchange") made to, and accepted by, holders of 100.0 % of the outstanding term loans (the "Exit Term Loans") under the Exit Term Loan Credit Agreement, dated as of August 24, 2020 (the "Exit Term Loan Credit Agreement"), by and among Pyxus Holdings, as borrower, the guarantors party thereto, the administrative agent and collateral agent thereunder, and the several lenders from time to time party thereto, on February 6, 2023, Pyxus Holdings entered into the Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "Intabex Term Loan 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.

The Intabex Term Loan Credit Agreement established a term loan credit facility in an aggregate principal amount of approximately $ 189,033 (the "Intabex Credit Facility"), under which term loans in the full aggregate principal amount of the Intabex Credit Facility (the "Intabex Term Loans") were deemed made in exchange for (i) $ 100,000 principal amount of the DDTL Term Loans, plus an additional $ 2,000 on account of the exit fee payable under the DDTL Credit Agreement and (ii) approximately $ 87,033 principal amount of Exit Term Loans, representing 40.0 % of the outstanding principal amount thereof (including the applicable accrued and unpaid PIK interest thereon).

On February 6, 2023, Pyxus Holdings entered into the Intabex Term Loan Credit Agreement, dated as of February 6, 2023 (the "Intabex Term Loan 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.

The Intabex Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum.

1 unchanged sentence

A detailed description of the Intabex Term Loan Credit Agreement is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

At December 31, 2023, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with all covenants under the Intabex Term Loan Credit Agreement.

At June 30, 2024, Pyxus Holdings and the guarantors under the Intabex Term Loan Credit Agreement were in compliance with all covenants under the Intabex Term Loan Credit Agreement.

Pyxus Term Loans

Pursuant to the Exit Facility Exchange, on February 6, 2023, Pyxus Holdings entered into the Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the "Pyxus Term Loan 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 $ 130,550 (the "Pyxus Credit Facility"), under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans" and, together with the Intabex Term Loans, the "New Term Loans") were deemed made in exchange for 60.0 % of the outstanding principal amount of Exit Term Loans (including the applicable accrued and unpaid PIK interest thereon).

On February 6, 2023, Pyxus Holdings entered into the Pyxus Term Loan Credit Agreement, dated as of February 6, 2023 (the "Pyxus Term Loan 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 $ 130,550 (the "Pyxus Credit Facility")., under which term loans in the full aggregate principal amount of the Pyxus Credit Facility (the "Pyxus Term Loans" and, together with the Intabex Term Loans, the "New Term Loans") were deemed made in exchange for certain outstanding term debt of Pyxus Holdings and applicable accrued and unpaid PIK interest thereon.

The Pyxus Term Loans bear interest, at Pyxus Holdings’ option, at either (i) a term SOFR rate (subject to a floor of 1.5 %) plus 8.0 % per annum or (ii) an alternate base rate plus 7.0 % per annum.

1 unchanged sentence

A detailed description of the Pyxus Term Loan Credit Agreement is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

At December 31, 2023, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with all covenants under the Pyxus Term Loan Credit Agreement.

At June 30, 2024, Pyxus Holdings and the guarantors under the Pyxus Term Loan Credit Agreement were in compliance with all covenants under the Pyxus Term Loan Credit Agreement.

8.50 % Senior Secured Notes due 2027

Pursuant to an exchange offer (the "Notes Exchange" and, together with the DDTL Facility Exchange and the Exit Facility Exchange, the "Debt Exchange Transactions") made by Pyxus Holdings and accepted by holders of approximately 92.7 % of the aggregate principal amount of the outstanding 10.0 % Senior Secured First Lien Notes due 2024 issued by Pyxus Holdings (the "2024 Notes") pursuant to that certain Indenture, dated as of August 24, 2020 (the "2024 Notes Indenture"), by and among Pyxus Holdings, the guarantors party thereto and the trustee, collateral agent, registrar and paying agent thereunder, on February 6, 2023, Pyxus Holdings issued approximately $ 260,452 in aggregate principal amount of 8.5 % Senior Secured Notes due December 31, 2027 (the "2027 Notes" and, together with the New Term Loans, the "New Secured Debt") to the exchanging holders of the 2024 Notes for an equal principal amount of 2024 Notes.

The 2027 Notes were issued pursuant to the Indenture, dated as of February 6, 2023 (the "2027 Notes Indenture"), among Pyxus Holdings, the guarantors party thereto, and Wilmington Trust, National Association, as trustee, and Alter Domus, as collateral agent.

Pursuant to an exchange offer made by Pyxus Holdings and accepted by holders of approximately 92.7 % of the aggregate principal amount of the outstanding 10.0 % Senior Secured First Lien Notes due 2024 issued by Pyxus Holdings (the "2024 Notes") pursuant to that certain Indenture, dated as of August 24, 2020 (the "2024 Notes Indenture"), by and among Pyxus Holdings, the guarantors party thereto and the trustee, collateral agent, registrar and paying agent thereunder, on February 6, 2023, Pyxus Holdings issued approximately $ 260,452 in aggregate principal amount of 8.5 % Senior Secured Notes due December 31, 2027 (the "2027 Notes") to the exchanging holders of the 2024 Notes for an equal principal amount of 2024 Notes.

as collateral agent.

The 2027 Notes bear interest at a rate of 8.5 % per annum, which interest is computed on the basis of a 360-day year comprised of twelve 30-day months.

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A detailed description of the 2027 Notes and the 2027 Notes Indenture is included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

At December 31, 2023, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.

Refinanced Senior Secured Debt

DDTL Facility

On April 23, 2021 (the “DDTL Closing Date”), Intabex entered into a Term Loan Credit Agreement (as amended on May 21, 2021, the "Initial DDTL Facility Credit Agreement"), dated as of April 23, 2021, by and among (i) Intabex, as borrower, (ii) the Company, Pyxus Parent, Pyxus Holdings, Alliance One International, LLC, Alliance One International Holdings, Ltd, as guarantors (collectively, the "Parent Guarantors"), (iii) the lenders thereto, which included certain funds managed by Glendon Capital Management, L.P., Monarch Alternative Capital LP, and Owl Creek Asset Management, L.P.

(collectively and, together other lenders that became parties thereto as lenders, the "DDTL Facility Lenders"), and (iv) Alter Domus, as administrative agent and collateral agent.

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 was drawn (the "Initial DDTL Loans") by March 31, 2022.

The obligations of Intabex under the Initial DDTL Facility Credit Agreement (and certain related obligations) were (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 was or became a guarantor of borrowings under the Exit Term Loan Credit Agreement and (b) was 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.

The Initial DDTL Credit Facility Agreement was amended and restated by the DDTL Credit Agreement, which established a $ 100,000 term loan credit facility (the "DDTL Term Loan Facility") and required that Intabex use the net proceeds of the DDTL Term Loans made thereunder 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 and the payment of fees and expenses incurred in connection with repaying such borrowings and incurring the DDTL Term Loans under the DDTL Credit Agreement.

The DDTL Term Loans were exchanged upon consummation of the DDTL Facility Exchange on February 6, 2023.

Exit Term Loan Credit Facility

On August 24, 2020, pursuant to the Exit Term Loan Credit Agreement, Pyxus Holdings became obligated with respect to the Exit Term Loans in an aggregate principal amount of approximately $ 213,418 .

Pyxus Holdings’ obligations under the Exit Term Loan Credit Agreement (and certain related obligations) were (a) guaranteed by Pyxus Parent, Inc.

and the Company, all of Pyxus Holdings’ material domestic subsidiaries and certain of Pyxus Holdings’ foreign subsidiaries, and each of Pyxus Holdings’ material domestic subsidiaries was required to guarantee the Exit Term Loan Credit Agreement on a senior secured basis and (b) secured by specified collateral owned by Pyxus Holdings and such guarantors.

The Exit Term Loans were exchanged upon consummation of the DDTL Facility Exchange and the Exit Facility Exchange on February 6, 2023.

At June 30, 2024, Pyxus Holdings and the guarantors of the 2027 Notes were in compliance with all covenants under the 2027 Notes Indenture.

Related Party Transactions

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 2024 Notes outstanding under the 2024 Notes Indenture.

Pursuant to the Support Agreement, the Supporting Holders agreed to participate in the Debt Exchange 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.

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/A filed with the SEC on January 23, 2023, by Monarch Alternative Capital LP (the "Monarch Investor"), MDRA GP LP and Monarch GP LLC, Monarch Alternative Capital LP 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 served as directors of Pyxus at the time the Company and its applicable subsidiaries entered into the Initial DDTL Credit Facility Agreement, the amendments thereto (including the DDTL Credit Agreement) and the Support Agreement, effected borrowings under the Initial DDTL Credit Facility Agreement and the DDTL Credit Agreement and commenced the Debt Exchange Transactions.

The Initial DDTL Credit Facility Agreement and the amendments thereto (including the DDTL Credit Agreement), any and all borrowings thereunder, the related guaranty transactions, the Support Agreement, and the Debt Exchange Transactions, including the Intabex Term Loan Credit Agreement, the Intabex Term Loans, the Pyxus Term Loan Credit Agreement, the Pyxus Term Loans, the 2027 Notes and the 2027 Notes Indenture 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.

Based on a Schedule 13D/A filed with the SEC on March 25, 2024, by Monarch Alternative Capital LP (the "Monarch Investor"), MDRA GP LP and Monarch GP LLC, the Monarch Investor reported beneficial ownership of 6,125 shares of the Company’s common stock, representing approximately 24.5 % of the outstanding shares of the Company’s common stock.

An individual designated by the Monarch Investor serves as a director of Pyxus.

On March 21, 2024, Pyxus Holdings entered into an agreement (the "Debt Repurchase Agreement") with funds affiliated with the Monarch Investor to purchase $ 77,922 of aggregate principal amount of their holdings in the 2027 Notes for $ 60,000 , a 23.0 % discount to par value, plus accrued and unpaid interest and specified customary fees.

The purchase of $ 77,922 aggregate principal amount of the 2027 Notes for a total of $ 62,339 (including fees and accrued and unpaid interest) was completed on March 28, 2024.

The Debt Repurchase Agreement also included the right of Pyxus Holdings, at its option, to purchase from such holders an additional $ 34,191 aggregate principal amount of the 2027 Notes for $ 26,327 , a 23.0 % discount to par value, plus accrued and unpaid interest, and $ 10,345 aggregate principal amount of the Pyxus Term Loans for $ 9,104 , a 12.0 % discount to par value, plus accrued and unpaid interest.

On April 12, 2024, Pyxus Holdings exercised its rights to complete these repurchases by September 30, 2024.

On May 31, 2024, Pyxus Holdings completed the purchase of $ 10,345 of aggregate principal amount of the Pyxus Term Loans for a total of $ 9,435 (including accrued and unpaid interest).

The Debt Repurchase Agreement and the transactions contemplated thereunder 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.

Other Outstanding Debt

In conjunction with the Notes Exchange, Pyxus Holdings received consents from requisite holders of 2024 Notes to amend the 2024 Notes Indenture, the 2024 Notes and the related intercreditor and security documents to, among other things, (i) eliminate most of the restrictive covenants and certain of the affirmative covenants in the 2024 Notes Indenture, (ii) eliminate the change of control repurchase obligation in the 2024 Notes Indenture, (iii) subordinate the 2024 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 2024 Notes.

On February 6, 2023, the relevant parties to the 2024 Notes Indenture entered into the Second Supplemental Indenture, dated as of February 6, 2023 (the "2024 Notes Supplemental Indenture"), to the 2024 Notes Indenture, pursuant to which the 2024 Notes Indenture, the 2024 Notes and the related intercreditor and security documents were amended to effect these changes.

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The 2024 Notes are stated to mature on August 24, 2024.

At December 31, 2023, Pyxus Holdings and the guarantors of the 2024 Notes were in compliance with all covenants under the 2024 Notes Indenture, as amended by the 2024 Notes Supplemental Indenture.

At June 30, 2024, Pyxus Holdings and the guarantors of the 2024 Notes were in compliance with all covenants under the 2024 Notes Indenture, as amended by the 2024 Notes Supplemental Indenture.

Foreign Seasonal Lines of Credit

Excluding long-term credit agreements, the Company typically finances its foreign operations with uncommitted short-term seasonal lines of credit arrangements with a number of banks.

Excluding long-term credit agreements, the Company typically finances 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 days to 365 days corresponding to the tobacco crop cycle in that location.

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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 December 31, 2023, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 160,416 .

As of December 31, 2023, the aggregate amount available for borrowing under the seasonal lines of credit was $ 250,164 .

At December 31, 2023 , the Company was permitted to borrow under foreign seasonal lines of credit up to a total $ 700,260 , subject to limitations under the ABL Credit Agreement and the agreements governing the New Secured Debt.

At December 31, 2023 , $ 976 of cash was held on deposit as a compensating balance.

At December 31, 2023, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term seasonal lines of credit.

As of June 30, 2024, the total borrowing capacity under individual foreign seasonal lines of credit range up to $ 152,600 .

As of June 30, 2024, the aggregate amount available for borrowing under the seasonal lines of credit was $ 169,703 .

At June 30, 2024 , the Company was permitted to borrow under foreign seasonal lines of credit up to a total $ 815,646 , subject to limitations under the ABL Credit Agreement and the agreements governing the Intabex Term Loans, the Pyxus Term Loans and the 2027 Notes.

At June 30, 2024 , $ 542 of cash was held on deposit as a compensating balance.

At June 30, 2024, the Company, and its subsidiaries, were in compliance with the covenants associated with its short-term seasonal lines of credit.

Securitized Receivables

The Company sells trade receivables to unaffiliated financial institutions under four accounts receivable securitization facilities, two of 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, 2023, 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 December 31, 2023, the investment limit under the second facility was $ 110,000 of trade receivables.

As of December 31, 2023, the investment limit under the third and fourth facilities were 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 December 31, 2023 and 2022, and March 31, 2023, trade receivables, net in the condensed consolidated balance sheets has been reduced by $ 5,813 , $ 12,280 , and $ 3,193 as a result of the net settlement, respectively.

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

Under the first facility, with Finacity Corporation (the "Finacity 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.

Following the sale and transfer of the receivables to the special purpose entity, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables.

This facility requires a minimum level of deferred purchase price be retained by the Company in connection with the sales of the receivables to the unaffiliated financial institution.

The Company continues to service, administer, and collect the receivables on behalf of the special purpose entity and receives a servicing fee of 0.5 % of serviced receivables per annum.

As the Company estimates the expected fee it receives in return for its obligation to service these receivables is at fair value, no servicing assets or liabilities are recognized.

Servicing fees are recorded as a reduction of selling, general, and administrative expenses within the condensed consolidated statements of operations.

As of June 30, 2024, the investment limit of this facility was $ 120,000 of trade receivables.

Under the second facility, the Company offers trade receivables for sale to an unaffiliated financial institution, which are then subject to acceptance by the unaffiliated financial institution.

Following the sale and transfer of the receivables to the unaffiliated financial institution, the receivables are isolated from the Company and its affiliates, and effective control of the receivables is passed to the unaffiliated financial institution, which has all rights, including the right to pledge or sell the receivables.

Although the Company continues to service, administer, and collect the receivables on behalf of the unaffiliated financial institution, the Company does not receive a servicing fee, and as a result, has established a servicing liability based upon unobservable inputs, primarily discounted cash flow.

As of June 30, 2024, the investment limit under the second facility was $ 130,000 of trade receivables.

As servicer for the Finacity Facility and the second facility, 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, 2024 and 2023, and March 31, 2024, trade receivables, net in the condensed consolidated balance sheets has been reduced by $ 8,219 , $ 908 , and $ 15,036 as a result of the net settlement, respectively.

As of March 31, 2024, accrued expenses and other current liabilities in the consolidated balance sheets includes $ 10,279 of net payables for the Finacity Facility.

Refer to " Note 15.

Fair Value Measurements " for additional information.

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

As of June 30, 2024, the investment limits under these other facilities were variable based on qualifying sales.

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:

December 31, 2023 December 31, 2022 March 31, 2023

June 30, 2024 June 30, 2023 March 31, 2024

Receivables outstanding in facility $ 260,973 $ 132,313 $ 170,267

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

Nine Months Ended

Three Months Ended

Cash proceeds:

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

December 31, 2023 December 31, 2022 March 31, 2023

June 30, 2024 June 30, 2023 March 31, 2024

Amounts guaranteed (not to exceed) $ 79,192 $ 138,523 $ 97,411

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Amounts due to local banks on behalf of suppliers for government subsidized rural credit financing 526 459 34,571

(1) Most of the guarantees outstanding at December 31, 2023 expire within one year .

(1) Most of the guarantees outstanding at June 30, 2024 expire within one year .

Derivative Financial Instruments

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

The Company recorded a net gain of $ 1,548 and $ 4,368 from its derivative financial instruments in cost of goods and services sold for the three and nine months ended December 31, 2023, 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.

As of December 31, 2023 and 2022, and March 31, 2023, the Company recorded current derivative assets of $ 0 , $ 678 , and $ 3,970 within other current assets, respectively.

The Company recorded a net gain of $ 851 and $ 1,434 from its derivative financial instruments in cost of goods and services sold for the three months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and 2023, the Company recorded current derivative liabilities of $ 1,834 and $ 11 within accrued expenses and other current liabilities, respectively.

Refer to " N ote 15.

Fair Value Measurements " for additional information.

The following summarizes the U.S.

Dollar notional amount of derivative contracts outstanding:

December 31, 2023 December 31, 2022 March 31, 2023

June 30, 2024 June 30, 2023 March 31, 2024

Dollar notional outstanding $ 23,300 $ 4,378 $ —

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

December 31, 2023 December 31, 2022 March 31, 2023

June 30, 2024 June 30, 2023 March 31, 2024

Level 2 Level 3 Total

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Financial Assets:

Derivative financial instruments $ — $ — $ — $ 678 $ — $ 678 $ 3,970 $ — $ 3,970

Securitized beneficial interests $ — $ 25,640 $ 25,640 $ — $ 19,641 $ 19,641 $ — $ 15,036 $ 15,036

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Financial Liabilities:

Derivative financial instruments $ 1,834 $ — $ 1,834 $ 11 $ — $ 11 $ — $ — $ —

Long-term debt (1)

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

Three Months Ended

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

Beginning balance $ 24,393 $ 507 $ 1,458 $ 22,842 $ 577 $ 1,206

Securitized Beneficial Interests Long-Term Debt Guarantees

Beginning balance at March 31, 2024

$ 15,036 $ 160 $ 5,097

Issuances of sales of receivables/guarantees 61,029 — 938

Settlements ( 45,233 ) — ( 715 )

Additions 44,754 — — 60,310 —

Losses recognized in earnings ( 5,192 ) — ( 2,709 )

Ending balance $ 14,312 $ 200 $ 1,703 $ 37,650 $ 532 $ 1,752

Nine Months Ended

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

Beginning balance $ 19,522 $ 514 $ 5,262 $ 28,072 $ 246 $ 2,956

Ending balance at June 30, 2024

$ 25,640 $ 160 $ 2,611

Securitized Beneficial Interests Long-Term Debt Guarantees

Beginning balance at March 31, 2023

$ 19,522 $ 514 $ 5,262

Issuances of sales of receivables/guarantees 36,640 — 1,054

Settlements ( 33,183 ) ( 5 ) ( 555 )

Additions 129,031 — — 131,392 325 —

Losses recognized in earnings ( 3,338 ) — 3

Ending balance $ 14,312 $ 200 $ 1,703 $ 37,650 $ 532 $ 1,752

For the nine months ended December 31, 2023 and 2022, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests was $ 1,551 and $ 2,252 , respectively.

Pension and Other Postretirement Benefits

The Company terminated one of its defined benefit pension plans in the U.K.

Pension Plan") during the three-month period ended December 31, 2023.

Pension Plan was over-funded.

During the three-month period ended December 31, 2023, the Company utilized the surplus assets to pay termination fees and received a $ 1,106 cash distribution from the plan termination.

The Company recorded a noncash pension settlement charge of $ 12,008 during the three and nine months ended December 31, 2023, which included the disposition of the U.K.

Pension Plan assets and the reclassification of $ 3,511 unrecognized net pension losses, net of $ 1,170 tax benefit, within accumulated other comprehensive income (loss) into the Company's condensed consolidated statements of operations.

Termination of the U.S.

Pension Plan occurred during the three 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.

defined benefit pension plan ("U.S.

Pension Plan") liabilities that was used to purchase a group annuity contract to administer payments to the remaining U.S.

Pension Plan participants.

The Company recorded pension settlement charges of $ 0 and $ 2,588 for the three and nine months ended December 31, 2022, respectively, which included the reclassification of $ 1,562 unrecognized net pension gains within accumulated other comprehensive income (loss) into the Company's condensed consolidated statements of operations.

Ending balance at June 30, 2023

$ 19,641 $ 509 $ 5,764

For the three months ended June 30, 2024 and 2023, the impact to earnings attributable to the change in unrealized losses on securitized beneficial interests was $ 1,250 and $ 748 , respectively.

Gains and losses included in earnings are reported in other expense, net.

Contingencies and Other Information

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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, 2023, the assessment for intrastate trade tax credits taken is $ 2,727 and the total assessment including penalties and interest is $ 11,013 .

At June 30, 2024, the assessment for intrastate trade tax credits taken is $ 2,375 and the total assessment including penalties and interest is $ 9,796 .

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, 2023, the assessment for intrastate trade tax credits taken is $ 2,353 and the total assessment including penalties and interest is $ 6,997 .

At June 30, 2024, the assessment for intrastate trade tax credits taken is $ 2,050 and the total assessment including penalties and interest is $ 6,201 .

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 $ 17,068 as of December 31, 2023.

The tax credits have a carrying value of $ 20,377 as of June 30, 2024.

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.

2 unchanged sentences

While the outcome of these matters cannot be predicted with certainty, they are being vigorously defended 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.

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.

Equity-Based Compensation

Pursuant to the Pyxus International, Inc.

Amended and Restated 2020 Incentive Plan (the "Incentive Plan"), the Company granted time-vesting restricted stock units, with the vesting of these restricted stock units being subject to continued employment through specified dates and the condition that the Company’s common stock be listed for trading on a national securities exchange or an approved foreign securities exchange by March 31, 2028 (the "Listing Condition").

On May 10, 2024 (the "Modification Date"), the time-vesting restricted stock units granted under the Incentive Plan that were outstanding

immediately prior to that date were amended to extend the period by which the Listing Condition must be satisfied for the vesting of such restricted stock units from March 31, 2028 to March 31, 2031 and to provide that the Listing Condition shall be deemed to be satisfied on March 31, 2031 regardless of whether the Company’s common stock has been listed by that date on a national securities exchange or foreign securities exchange and would vest earlier upon the occurrence of a "Change in Control" (as defined in the Incentive Plan) as a result of a merger, consolidation, share exchange or sale of all or substantially all of the assets of the Company.

On the Modification Date, the amended Listing Condition was rendered nonsubstantive, and recipients of all such outstanding time-vesting restricted stock units had satisfied the continued service requirement, meaning the restricted stock units were fully earned for vesting.

During the three months ended June 30, 2024, the Company recognized total equity-based compensation expense of $ 3,031 , which is recorded in selling, general, and administrative expenses within the condensed consolidated statements of operations.

The modified time-vesting restricted stock units accounted for $ 2,877 of the total equity-based compensation to reflect the cumulative catch-up required on the Modification Date.

The following summarizes the Company's equity awards granted:

Three Months Ended

(in thousands, except grant date fair value) 2024 2023

Restricted stock units

Number granted 768 —

Grant date fair value $ 3.50 $ —

Performance-based stock units

Number granted (at target performance level) 576 —

Grant date fair value $ 4.36 $ —

Restricted stock units granted under the Incentive Plan during the three months ended June 30, 2024 are earned ratably over a three-year period, and will vest, subject to continued employment, upon the earlier of March 31, 2031 or the occurrence of a liquidity event as defined under the terms of the restricted stock unit award agreement.

Unrecognized compensation costs for restricted stock units is $ 2,534 as of June 30, 2024, and is expected to be recognized over a weighted average period of 2.75 years, representing the remaining service period related to the awards, subject to adjustments for actual forfeitures.

Under the terms of the performance-based stock units, the amount of shares to be issued (ranging from 0 % to 200 % of the number of shares to be issued at the target performance level) will be contingent upon the per share price achieved in a liquidity event (as defined under the terms of the performance-based stock unit award agreement), subject to continued employment through the date of a liquidity event.

The contingent liquidity event is not probable as of June 30, 2024, and accordingly, no equity-based compensation expense has been recognized for the performance-based stock units granted during the period.

Related Party Transactions

The Company engages in transactions with its equity method investees primarily for the procuring and processing of inventory.

The following summarizes sale and purchase transactions with related parties:

Three Months Ended Nine Months Ended

December 31, December 31,

2023 2022 2023 2022

The following summarizes activities with the Company's equity method investees:

Three Months Ended

Sales $ 10,575 $ 10,817

1 unchanged sentence

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

December 31, 2023 December 31, 2022 March 31, 2023 Location in Condensed Consolidated Balance Sheet

June 30, 2024 June 30, 2023 March 31, 2024 Location in Condensed Consolidated Balance Sheet

Accounts receivable, related parties $ 4,080 $ 5,090 $ 50 Other receivables

2 unchanged sentences

Transactions with Significant Shareholders

As described in " Note 1 1 .

Debt Arrangements ," funds managed by the Glendon Investor, funds managed by the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P., (such funds are collectively referred to as the "Investor-Affiliated Funds") held 2024 Notes and/or Exit Term Loans, were parties to the Initial DDTL Facility Credit Agreement and amendments thereto (including the DDTL Credit Agreement) and the Support Agreement, and received the New Secured Debt pursuant to the Debt Exchange Transactions.

Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of December 31, 2023 and 2022, and March 31, 2023, includes $ 4,091 , $ 7,649 , and $ 3,653 , respectively, of interest payable to Investor-Affiliated Funds and CI Investments, Inc.

Based on a Schedule 13D/A filed with the SEC on June 13, 2024 by Glendon Capital Management, L.P.

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

and Glendon Opportunities Fund II, L.P., the Glendon Investor reported beneficial ownership of 8,315 shares of the Company’s common stock, representing approximately 33.3 % of the outstanding shares of the Company’s common stock.

A representative of the Glendon Investor serves as a director of Pyxus.

Based on a Schedule 13G/A filed with the SEC on May 6, 2024 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 2,605 shares of the Company’s common stock on April 30, 2024, representing approximately 10.4 % of the outstanding shares of the Company’s common stock.

Funds managed by the Glendon Investor, funds managed by the Monarch Investor, and funds managed by Owl Creek Asset Management, L.P., (such funds are collectively referred to as the "Investor-Affiliated Funds") were holders, in part, of the Intabex Term Loans, the Pyxus Term Loans and the 2027 Notes, which are described in " Note 11.

Debt Arrangements ," during the three months ended June 30, 2024.

Accrued expenses and other current liabilities as presented in the condensed consolidated balance sheets as of June 30, 2024 and 2023, and March 31, 2024, includes $ 1,894 , $ 3,945 , and $ 4,239 , respectively, of interest payable to Investor-Affiliated Funds and CI Investments, Inc.

("CI Investments"), which is also a beneficial owner of greater than five percent of the Company's common stock.

Interest expense as presented in the condensed consolidated statements of operations includes $ 10,314 and $ 30,683 for the three and nine months ended December 31, 2023, respectively, and $ 9,264 and $ 25,494 for the three and nine months ended December 31, 2022, respectively, that relates to the Investor-Affiliated Funds and CI Investments.

Interest expense as presented in the condensed consolidated statements of operations includes $ 7,261 and $ 10,075 for the three months ended June 30, 2024 and 2023, respectively, that relates to the Investor-Affiliated Funds and CI Investments.

The holders of senior debt that are parties to the Debt Repurchase Agreement entered into on March 21, 2024 are funds affiliated with the Monarch Investor and of which the Monarch Investor is the investment advisor.

The Debt Repurchase Agreement and the transactions contemplated thereby, including the exercise by Pyxus Holdings of its right to purchase the Pyxus Term Loans and additional 2027 Notes thereunder on April 12, 2024, 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.

Under the terms of the Debt Repurchase Agreement, the Company has paid the following amounts to funds affiliated with the Monarch Investor:

• On March 28, 2024, the Company paid a total of $ 62,339 , which included $ 1,849 of accrued and unpaid interest and $ 490 in other fees, to retire $ 77,922 of aggregate principal amount of the 2027 Notes.

• On May 31, 2024, the Company paid a total of $ 9,435 , which included $ 332 of accrued and unpaid interest, to retire $ 10,345 of aggregate principal amount of the Pyxus Term Loans.

Segment Information

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 Nine Months Ended

December 31, December 31,

2023 2022 2023 2022

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

Three Months Ended

Sales and other operating revenues:

8 unchanged sentences

Consolidated operating income $ 40,457 $ 36,418

December 31, 2023 December 31, 2022 March 31, 2023

June 30, 2024 June 30, 2023 March 31, 2024

Segment assets:

2 unchanged sentences

Total assets $ 1,792,711 $ 1,802,994 $ 1,657,913

S ubsequent Events

Debt Repurchase

On August 2, 2024, pursuant to the Debt Repurchase Agreement with funds affiliated with the Monarch Investor, Pyxus paid a total of $ 26,707 , which includes $ 379 for accrued and unpaid interest through the date prior to payment, to retire $ 34,191 of aggregate principal amount of the 2027 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