What changed in this filing

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Item 2. Unregistered Sales of Equity Securities

2022-08-12 compared with 2022-05-16 · 37 added, 19 removed, 4 unchanged (93% of the section changed)

Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Defaults Upon Senior Securities

On December 14, 2017, the Company entered into a Revolving Credit, Term Loan and Security Agreement (the “Loan Agreement”) with PNC Bank, National Association and the other participant lenders thereunder (collectively, “Prior Lender”).

This was the Company’s primary source of liquidity until it refinanced this facility with Line Capital during September 2021.

On April 23, 2021, the Company entered into a Purchase and Sale Agreement (“PSA”) with an unaffiliated purchaser (the “Purchaser”) pursuant to which the Company sold its facility in Lake Barrington, Illinois (the “Lake Barrington Facility”), in which our headquarters office, production and warehouse space are located, to the Purchaser.

The sale price for the Lake Barrington Facility was $3,500,000, consisting of $2,000,000 in cash and a promissory note with a principal amount of $1,500,000, due and payable on May 3, 2021 (the “Purchaser Promissory Note”).

Concurrently with the closing under the PSA, the Company and the Purchaser entered into a lease agreement pursuant to which the Company agreed to lease the Lake Barrington Facility from the Purchaser for a period of ten years.

The annual base rent commences at $500,000 for the first year of the term and escalates annually to $652,386 during the last year of the term of the lease.

Concurrently with the entry into the PSA and the Lease, the Company entered into a Consent, Forbearance and Amendment No.

6 to Revolving Credit, Term Loan and Security Agreement (the “Amendment Agreement”) with PNC for itself and for the other participant lenders thereunder (collectively, the “Prior Lender”).

Prior to entering into the Amendment Agreement, PNC had notified the Company that various events of default had occurred under the Loan Agreement (the “Existing Defaults”) and were continuing.

Pursuant to the Amendment Agreement, the Prior Lender consented to the transactions contemplated by the PSA and the Lease, as required under the Loan Agreement. 

As a condition to the Amendment Agreement, the Company agreed that the full $2,000,000 in cash proceeds from the sale of the Lake Barrington Facility would be applied to repay the $2,000,000 term loan owed to the Prior Lender pursuant to the Loan Agreement.

The Company further agreed that $1,500,000 in proceeds from the Purchaser Promissory Note will be applied to amounts due and owing to the Prior Lender under revolving credit advances made pursuant to the Loan Agreement (the “Revolving Loans”).

Pursuant to the Amendment Agreement, the Prior Lender agreed to forbear from exercising its rights and remedies with respect to the Existing Event of Defaults under the Loan Agreement for a period ending on the earlier of September 30, 2021, the occurrence of a new event of default under the Loan Agreement, or the occurrence of a Termination Event (as defined therein).

Additionally, certain additions and amendments to the Loan Agreement were set forth in the Amendment Agreement, including:

In consideration for entering into the Loan Amendment, the Company agreed to pay the Prior Lender a Forbearance Fee of $1,000,000.

Provided, however, that, so long as no Event of Default under the Loan Agreement has occurred (including as a result of a failure of the Company to pay down the Revolving Loans by $1,500,000 with the proceeds of the Purchaser Promissory Note, (i) if the Company consummates the Equity Investment by June 30, 2021, the Forbearance Fee shall be reduced by $250,000, to $750,000, and (ii) if the Company causes all of the obligations under the Loan Agreement to be paid in full, in cash, on or before September 30, 2021, the Forbearance Fee shall be reduced by an additional $500,000, to $250,000.

December 14, 2017, the Company entered into a Revolving Credit, Term Loan and Security Agreement (the “Loan Agreement”) with

PNC Bank, National Association and the other participant lenders thereunder (collectively, “Prior Lender”).

Company’s primary source of liquidity until it refinanced this facility with Line Capital during September 2021.

April 23, 2021, the Company entered into a Purchase and Sale Agreement (“PSA”) with an unaffiliated purchaser (the “Purchaser”)

pursuant to which the Company sold its facility in Lake Barrington, Illinois (the “Lake Barrington Facility”), in which our

headquarters office, production and warehouse space are located, to the Purchaser.

The sale price for the Lake Barrington Facility was

$3,500,000, consisting of $2,000,000 in cash and a promissory note with a principal amount of $1,500,000, due and payable on May 3, 2021

(the “Purchaser Promissory Note”).

Concurrently with the closing under the PSA, the Company and the Purchaser entered into

a lease agreement pursuant to which the Company agreed to lease the Lake Barrington Facility from the Purchaser for a period of ten years.

The annual base rent commenced at $500,000 for the first year of the term and escalates annually to $652,386 during the last year of

the term of the lease.

Concurrently with the entry into the PSA and the Lease, the Company entered into a Consent, Forbearance and Amendment

6 to Revolving Credit, Term Loan and Security Agreement (the “Amendment Agreement”) with PNC for itself and for the other

participant lenders thereunder (collectively, the “Prior Lender”).

Prior to entering into the Amendment Agreement, PNC had

notified the Company that various events of default had occurred under the Loan Agreement (the “Existing Defaults”) and were

Pursuant to the Amendment Agreement, the Prior Lender consented to the transactions contemplated by the PSA and the Lease,

as required under the Loan Agreement.

As a condition to the Amendment Agreement, the Company agreed that the full $2,000,000 in cash

proceeds from the sale of the Lake Barrington Facility would be applied to repay the $2,000,000 term loan owed to the Prior Lender pursuant

to the Loan Agreement.

The Company further agreed that $1,500,000 in proceeds from the Purchaser Promissory Note will be applied to amounts

due and owing to the Prior Lender under revolving credit advances made pursuant to the Loan Agreement (the “Revolving Loans”).

Pursuant to the Amendment Agreement, the Prior Lender agreed to forbear from exercising its rights and remedies with respect to the Existing

Event of Defaults under the Loan Agreement for a period ending on the earlier of September 30, 2021, the occurrence of a new event of

default under the Loan Agreement, or the occurrence of a Termination Event (as defined therein).

Additionally, certain additions and

amendments to the Loan Agreement were set forth in the Amendment Agreement, including:

consideration for entering into the Loan Amendment, the Company agreed to pay the Prior Lender a Forbearance Fee of $1,000,000.

however, that, so long as no Event of Default under the Loan Agreement has occurred (including as a result of a failure of the Company

to pay down the Revolving Loans by $1,500,000 with the proceeds of the Purchaser Promissory Note, (i) if the Company consummates the

Equity Investment by June 30, 2021, the Forbearance Fee shall be reduced by $250,000, to $750,000, and (ii) if the Company causes all

of the obligations under the Loan Agreement to be paid in full, in cash, on or before September 30, 2021, the Forbearance Fee shall be

reduced by an additional $500,000, to $250,000.

These commitments were met and the final Forbearance Fee was $250,000.

The Company believes that it has been in compliance with the terms of the Line Capital financing since inception on September 30, 2021.

Company believes that it has been in compliance with the terms of the Line Capital financing since inception on September 30, 2021.

Mine Safety Disclosures

Not applicable.

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 2. Unregistered Sales of Equity Securities