/raid1/www/Hosts/bankrupt/TCR_Public/240426.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, April 26, 2024, Vol. 28, No. 116
Headlines
101 41ST ST NE: Case Summary & One Unsecured Creditor
1375 BROADWAY: JLL to Hold Public Auction Sale on June 6
2100 15TH ST SE: Voluntary Chapter 11 Case Summary
2812 POMEROY RD: Case Summary & Four Unsecured Creditors
4001 FIRST ST SE: Case Summary & Five Unsecured Creditors
4318 HALLEY: Case Summary & Five Unsecured Creditors
4641 HILLSIDE: Case Summary & Four Unsecured Creditors
5012 BASS PLACE: Case Summary & Four Unsecured Creditors
76 M INC: Seeks to Hire Appraisez Residential as Appraiser
ABBOTT LABORATORIES: Dismissal of Economic Loss Claims Upheld
AERWINS TECH: Faces Nasdaq Delisting Due to Delayed 10-K Filing
AIR CANADA: S&P Upgrades ICR to 'BB' on Lower Sustained Debt
ALR CONSTRUCTION: Court OKs Cash Collateral Access on Final Basis
AMK TIKI: Seeks to Hire Genova Malin & Trier LLP as Counsel
ANCHOR PACKAGING: S&P Affirms 'B' ICR, Outlook Stable
APPLIED DNA: Effects 1-for-20 Reverse Stock Split
ARCIMOTO INC: Receives Notice of Delisting From Nasdaq
ASHEVILLE PACKING: Wins Cash Collateral Access on Final Basis
ASHFORD HOSPITALITY: CEO Rob Hays Steps Down; S. Zsigray to Succeed
AVIVAGEN INC: Commences Insolvency Proceedings
B&C FAMILY: Hires John P. Forest as Bankruptcy Counsel
BIG DOG: Court OKs Interim Cash Collateral Access
BIOTRICITY INC: Nasdaq Grants Request for Continued Listing
BREITMEYER FABRICATIONS: Hires Darby Law Practice as Counsel
CALAMP CORP: Nasdaq Accepts Plan to Regain Compliance
CAPITAL TACOS: Hires Johnson Pope Bokor as Counsel
CEL-SCI CORP: Appoints Mario Gobbo as Director
CENTERSTONE REALTY: Deborah Caruso Named Subchapter V Trustee
CHICKEN SOUP: Receives Delinquency Letter From Nasdaq
CIDARA THERAPEUTICS: Effects 1-for-20 Reverse Common Stock Split
CLEARSIGN TECHNOLOGIES: Amends $5M Purchase Deal With Investor
CLEARSIGN TECHNOLOGIES: Appoints David Maley to Board of Directors
CLEARSIGN TECHNOLOGIES: Closes $9.3 Million Public Offering
CLEARSIGN TECHNOLOGIES: Provides Full Year 2023 Update
CLINE'S CORNER: Case Summary & Eight Unsecured Creditors
CMG HOLDINGS: BF Borgers CPA Raises Going Concern Doubt
COMMUNITY HEALTH: Sells Cleveland Hospital to Hamilton Health Care
COMPASS MINERALS: Moody's Lowers CFR to B1 & Unsecured Notes to B2
CORPORATION SERVICE: Fitch Affirms BB LongTerm IDR, Outlook Stable
CUETO CONSULTING: Unsecureds to Split $15K over 5 Years
DAIRY FARMERS: Moody's Affirms 'Ba1' Preferred Stock Rating
DARJEN INC: Wins Cash Collateral Access on Final Basis
DAVID ALONSO MD: Lisa Holder Named Subchapter V Trustee
DERMTECH INC: To Implement Restructuring, Explore Other Options
DIRIGO GLOBAL: Case Summary & 11 Unsecured Creditors
EMCORE CORP: Back in Compliance With Nasdaq Bid Price Requirement
EMRLD BORROWER: S&P Affirms 'BB-' ICR, Outlook Stable
ENCINO ACQUISITION: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
ENCINO ACQUISITION: Moody's Rates New $500MM Unsecured Notes 'B3'
ENCINO ACQUISITION: S&P Rates New Senior Unsecured Notes 'B-'
ENDO INT'L: Asset Acquisition Completed, Exits Chapter 11
ENDO INTL: Inks Sale Agreement After Chapter 11 Plan Confirmation
ENGLOBAL CORP: Dismisses Moss Adams; M&K CPAs Named New Auditor
EPI HEALTH: Issues Voluntary Recall of Human Drug Products
ERIC MCCRITE: Sale Proceeds & Business Revenue to Fund Plan
EVERGREEN HOMES: Tarek Kiem Named Subchapter V Trustee
EXPRESS INC: Seeks $224MM DIP Loan from Wells Fargo and ReStore
EYECARE PARTNERS: S&P Downgrades ICR to 'SD' on Private Exchange
FARGO BREWING: Thomas Kapusta Named Subchapter V Trustee
FAST FLOW: Wins Cash Collateral Access Thru May 2
FAXON ENTERPRISES: Court OKs Cash Collateral Access on Final Basis
FORMATION HOLDINGS: Wins Interim Cash Collateral Access
FTAI AVIATION: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
FXI HOLDINGS: S&P Affirms 'CCC+' ICR, Outlook Negative
GMS SUNSET: May Use Cash Collateral Thru May 14
GOLD STAR: Unsecured Creditors to Split $23K over 60 Months
GROM SOCIAL: Inks Omnibus Amendment Agreement With Generating Alpha
GWG HOLDINGS: Beneficient Responds to Trustee's Complaint
HELIOS SOFTWARE: Moody's Affirms 'B2' CFR Amid Refinancing Deal
HILCORP ENERGY: S&P Affirms 'BB+' ICR on Solid Cash Flow Generation
HUDBAY MINERALS: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
INNOVATE CORP: Announces Preliminary Results of Rights Offering
INNOVATE CORP: Closes Rights Offering
INNOVATIVE DENTAL: Wins Cash Collateral Access on Final Basis
INTRUSION INC: Raises $2.6 Million in Private Offering
INVITAE CORP: Labcorp Emerges as Winning Bidder in 363 Sale
JD MOTORSPORTS: Hires Penn Law Firm LLC as Counsel
KARBONX CORP: Reports $471,271 Net Loss in Third Quarter
KULR TECHNOLOGY: Delivers Cell Battery for Ukraine Drone Missions
LAG SHOT: Unsecureds to Get 18.95 Cents on Dollar in Plan
LAVERTU CAPITAL: Aaron Cohen Named Subchapter V Trustee
LUXURY FLUSH: Seeks to Hire Lucove Say & Co. as Accountant
MARIADB PLC: K1 Announces Terms of Recommended $39.5M Cash Offer
MARJALINAT INC: Hires William H. Brownstein as Counsel
MARQUIE GROUP: Accumulated Deficit Raises Going Concern Doubt
MASH STUDIOS: Voluntary Chapter 11 Case Summary
MELLO JOY: Voluntary Chapter 11 Case Summary
MERCURITY FINTECH: Incurs $9.4 Million Net Loss in 2023
METAVINE INC: Hires Greenberg Traurig as Special Tax Counsel
MOONIES MF: Case Summary & 20 Largest Unsecured Creditors
MORK'S AUTO: Seeks to Hire Neeleman Law Group as Counsel
MSS INC: Wins Cash Collateral Access Thru May 23
NANO MAGIC: CEO Provides Update on Brand Development Progress
NETCAPITAL INC: Issues Shares in Exchange for Debt Cancellation
NEVER SLIP: Hires Berkeley Research as Financial Advisor
NEVER SLIP: Hires Chipman Brown Cicero & Cole as Co-Counsel
NEVER SLIP: Hires Omni Agent Solutions as Administrative Agent
NEVER SLIP: Hires Ropes & Gray LLP as Bankruptcy Counsel
NEVER SLIP: Hires Solomon Partners as Investment Banker
NORTHSTAR GROUP: Moody's Rates New Secured 1st Lien Term Loan 'B2'
NORTHSTAR GROUP: S&P Affirms 'B' ICR, Outlook Stable
NOVA LIFESTYLE: Receives Noncompliance Notice From Nasdaq
OMNIQ CORP: Awarded Follow-On Order for Machine Vision Technology
PARAMOUNT INTERMODAL: Arturo Cisneros Named Subchapter V Trustee
PARTNERS IN HOPE: Hires Newpoint Advisors as Financial Advisor
PCS & ESTIMATE: Hires Compass Advisory as Investment Banker
PETROLIA ENERGY: Seeks Stay of Receivership Appointment Order
PRESSURE BIOSCIENCES: All Four Proposals Passed at Special Meeting
PRIEST ENTERPRISES: Hires Stonehenge Consulting as Accountant
PROS HOLDINGS: Appoints Todd McNabb as Chief Revenue Officer
PROSPERITAS LEADERSHIP: Hires M. E. Henkel P.A. as Closing Agent
RAYMAN HOSPITALITY: Fitch Alters Outlook on 'BB-' IDR to Positive
REKOR SYSTEMS: Files Charter Amendment With Del. Secretary of State
RENALYTIX PLC: All Four Proposals Passed at General Meeting
RENALYTIX PLC: Raises $0.5 Million Through Partial Option Exercise
RENALYTIX PLC: Thomas McLain to Resign as President
RESOURCE FOR EDUCATION: Mark Sharf Named Subchapter V Trustee
ROYAL JET: Hires Law Offices of Alla Kachan P.C. as Counsel
SB PROPERTY: Hires Mike J. Urquhart, Esq. as Special Counsel
SELECTIS HEALTH: Secures $750K Loan From Southern Bank
SMOKE SHOWIN': Unsecureds Will Get 3.4% of Claims over 3 Years
SPI ENERGY: Receives Nasdaq Non-Compliance Notice
STICKY'S HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
SUSHI GARAGE: Court OKs Cash Collateral Access on Final Basis
SYSTEM ENERGY: Moody's Affirms 'Ba1' LongTerm Issuer Rating
TED BAKER CANADA: Chapter 15 Case Summary
THERACARE PSYCHOLOGY: Hires Financial Relief as Legal Counsel
TNOTES INVESTMENT: Voluntary Chapter 11 Case Summary
TRANSOCEAN LTD: Completes $1.8B Sr. Notes Offering Due 2029, 2031
TRANSOCEAN LTD: Extends $510M Credit Facility Maturity to June 2028
TREVENA INC: Stockholders Approve Issuance of Common Shares
TRINITY INDUSTRIES: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
TRP BRANDS: Hires Novo Advisors LLC as Financial Advisor
TWILIO INC: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable
UNITED TALENT: Moody's Affirms 'B2' CFR, Outlook Stable
UNIVERSAL SEATING: Court OKs Interim Cash Collateral Access
UNIVERSAL-1 IMPORTS: Wins Cash Collateral Access Thru May 31
URBAN ONE: Inks Sixth Waiver and Amendment to ABL Facility
UXIN LIMITED: Incurs RMB79.3 Million Net Loss in Third Quarter
VAIL RESORTS: Moody's Rates New $600MM Sr. Unsecured Notes 'Ba3'
VAIL RESORTS: S&P Rates New Senior Unsecured Notes 'BB'
VBI VACCINES: Perceptive Advisors, 3 Others Report Stakes
VENUS CONCEPT: Secures $5M Financing Commitment From Madryn Health
VERIFONE SYSTEMS: S&P Alters Outlook to Neg., Affirms 'B-' ICR
VIDEO RIVER: Reports $496,026 Net Income in 2023
VISTRA CORP: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
VRC2735 LLC: Case Summary & Two Unsecured Creditors
W.F. JACKSON: Case Summary & 20 Largest Unsecured Creditors
WATERBRIDGE NDB: Fitch Assigns 'B+' LongTerm IDR, Outlook Stable
WISCONSIN & MILWAUKEE: Hires Richman & Richman LLC as Counsel
Y.Z.P. INC: Maria Yip Named Subchapter V Trustee
[^] BOOK REVIEW: Charles F. Kettering: A Biography
*********
101 41ST ST NE: Case Summary & One Unsecured Creditor
-----------------------------------------------------
Debtor: 101 41st St NE LLC
101 41st Street, NE
Washington, DC 20019
Business Description: 101 41ST ST NE is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00135
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Justin P. Fasano, Esq.
MCNAMEE HOSEA, P.A.
6404 Ivy Lane, Suite 820
Greenbelt, MD 20770
Tel: 301-441-2420
Fax: 301-982-9450
Email: jfasano@mhlawyers.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jesper Sixtus Nylen as sole member.
The Debtor listed TD Bank, N.A. located at 4061 Powder Mill
Road #410 Beltsville, MD 20705 as its sole unsecured creditor.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/K23UZGQ/101_41ST_ST_NE_LLC__dcbke-24-00135__0001.0.pdf?mcid=tGE4TAMA
1375 BROADWAY: JLL to Hold Public Auction Sale on June 6
--------------------------------------------------------
Jones Lang LaSalle Americas Inc., on behalf of BREF V Series B LLC,
is offering for sale at a public auction on June 6, 2024, at 11:00
a.m. (New York Time) conducted both via Zoom and in-person at the
offices of Cleary Gottlieb Steen & Hamilton LLP, One Liberty Plaza,
New York, New York 10006, in connection with a Uniform Commercial
Code sale, 100% of the limited liability company membership
interests ("interests") in 1375 Broadway Property Investors V LLC
("mortgage borrower"), which is the sole owner of the property
located at 1375 Broadway, New York, New York 10018. The interests
are owned by 1375 Broadway Mezz V LLC ("mezzanine borrower"),
having its principal place of business at 430 Park Avenue, 12th
Floor, New York, New York 10022.
The secured party, as administrative agent and lender, made a loan
("mezzanine loan") to the mezzanine borrower. In connection with
the mezzanine loan, the mezzanine borrower has granted to the
secured party a first priority lien interests pursuant to that
certain pledged and security agreement, dated as of July 10, 2020,
made by mezzanine borrower in favor of the secured party. The
secured party is offering the interests for sale in connection with
the foreclosure on the pledge of such interests. The mezzanine
loan is subordinate to a mortgage loan and other obligations and
liabilities of the mortgage borrower or otherwise affecting the
property ("mortgage loan"). BREF V Series B LLC may, prior to the
sale described herein, assign all of its right, title and interest
in and to the mezzanine loan to an affiliate of BREF V Series B
LLC, and in the case of such assignment assignee shall be
considered the "secured party" for all purposes hereunder.
All bids must be for cash, and the successful bidder must be
prepared to deliver immediately available good funds as required by
the terms of sale and otherwise comply with the bidding
requirements and the terms of sale. Further information concerning
the interests, the requirements for obtaining information and
bidding on the interests and the terms of sale can be found at
https://www.1375BroadwayUCCSale.com or by contacting Brett
Rosenberg, Tel: +1 212-812-5926; email at brett.rosenberg@jll.com.
2100 15TH ST SE: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: 2100 15th St SE LLC
2100 15th Street, SE
Washington, DC 20020
Business Description: 2100 15th St SE is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00136
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Justin P. Fasano, Esq.
MCNAMEE HOSEA, P.A.
6404 Ivy Lane, Suite 820
Greenbelt, MD 20770
Tel: 301-441-2420
Fax: 301-982-9450
E-mail: jfasano@mhlawyers.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jesper Sixtus Nylen as sole member.
The Debtor indicated it has no unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/LDWSSSQ/2100_15TH_ST_SE_LLC__dcbke-24-00136__0001.0.pdf?mcid=tGE4TAMA
2812 POMEROY RD: Case Summary & Four Unsecured Creditors
--------------------------------------------------------
Debtor: 2812 Pomeroy Rd SE LLC
4917 Riding Ridge Court
Laurel, MD 20707
Business Description: 2812 Pomeroy Rd SE is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00143
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Jeffery T. Martin,, Jr., Esq.
MARTIN LAW GROUP PC
8065 Leesburg Pike
Suite 750
Vienna, VA 22182
Tel: (703) 223-1822
Email: jeff@martinlawgroupva.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Maria I. Rivera as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/FGTGGRY/2812_Pomeroy_Rd_SE_LLC__dcbke-24-00143__0001.0.pdf?mcid=tGE4TAMA
4001 FIRST ST SE: Case Summary & Five Unsecured Creditors
---------------------------------------------------------
Debtor: 4001 First St SE LLC
4917 Riding Ridge Court
Laurel, MD 20707
Business Description: 4001 First St SE is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00138
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Jeffery T. Martin, Jr., Esq.
MARTIN LAW GROUP PC
8065 Leesburg Pike
Suite 750
Vienna, VA 22182
Tel: (703) 223-1822
Email: jeff@martinlawgroupva.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mario Guatemala as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ELG4COY/4001_First_St_SE_LLC__dcbke-24-00138__0001.0.pdf?mcid=tGE4TAMA
4318 HALLEY: Case Summary & Five Unsecured Creditors
----------------------------------------------------
Debtor: 4318 Halley Terrace SE LLC
4917 Riding Ridge Court
Laurel, MD 20707
Business Description: 4318 Halley Terrace is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00142
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Jeffery T. Martin, Jr., Esq.
MARTIN LAW GROUP PC
8065 Leesburg Pike
Suite 750
Vienna, VA 22182
Tel: (703) 223-1822
E-mail: jeff@martinlawgroupva.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Maria I. Rivera as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/E2EQGPQ/4318_Halley_Terrace_SE_LLC__dcbke-24-00142__0001.0.pdf?mcid=tGE4TAMA
4641 HILLSIDE: Case Summary & Four Unsecured Creditors
------------------------------------------------------
Debtor: 4641 Hillside Rd SE, LLC
4917 Riding Ridge Court
Laurel, MD 20707
Business Description: 4641 Hillside Rd SE is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00141
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Jeffery T. Martin, Jr., Esq.
MARTIN LAW GROUP PC
8065 Leesburg Pike
Suite 750
Vienna, VA 22182
Tel: (703) 223-1822
E-mail: jeff@martinlawgroupva.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mario Guatemala as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/E73RB4Y/4641_Hillside_Rd_SE_LLC__dcbke-24-00141__0001.0.pdf?mcid=tGE4TAMA
5012 BASS PLACE: Case Summary & Four Unsecured Creditors
--------------------------------------------------------
Debtor: 5012 Bass Place SE LLC
4917 Riding Ridge Court
Laurel, MD 20707
Business Description: 5012 Bass Place SE is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
District of Columbia
Case No.: 24-00140
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Jeffery T. Martin,, Jr., Esq.
MARTIN LAW GROUP PC
8065 Leesburg Pike
Suite 750
Vienna, VA 22182
Tel: (703) 223-1822
E-mail: jeff@martinlawgroupva.co
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mario Guatemala as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ET56YCA/5012_Bass_Place_SE_LLC__dcbke-24-00140__0001.0.pdf?mcid=tGE4TAMA
76 M INC: Seeks to Hire Appraisez Residential as Appraiser
----------------------------------------------------------
76 M Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Columbia to employ David Benton, a certified
residential appraiser of Appraisez Residential Real Estate
Appraisers, to provide appraisal services.
The Debtor owns the following 7 residential real properties located
in Washington DC:
-- 6145 Kansas Ave., NE, Washington DC 20011;
-- 6147 Kansas Ave., NE, Washington DC 20011;
-- 6149 Kansas Ave., NE, Washington DC 20011;
-- 1676 Kramer St., NE, Washington DC 20002;
-- 920 Madison St., NW, Washington DC 20011;
-- 1832 Bryant St., NE, Washington DC 20002; and
-- 256 57 th St., NE, Washington DC 20019.
The Debtor requires valuations of the mentioned properties for
matters related to the Chapter 11 Plan, related litigation, and
Debtor's reorganization. Accordingly, the Debtor has elected to
retain the services of Benton.
The professional services Benton is to render includes:
(a) appraisals of the single family residential properties at a
flat fee of $650 each;
(b) appraisals of the multi family residential properties at a
flat fee of
$850.00 each; and
(c) testimony in Court or Court related proceedings, as needed,
at a rate of $150 per hour, with a 3 hour minimum.
As disclosed in a court filing that the professional is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
Mr. Benton can be reached at:
David Benton
Appraisez Residential Real Estate Appraisers
2390 Sand Hill Road
Ellicott City, MD 21042
Tel: (410) 960-4632
Email: dbenton@appraisez.com
About 76 M Inc.
76 M Inc. is primarily engaged in renting and leasing real estate
properties.
76 M Inc. filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. C. Case No. 24-00003) on Jan. 3,
2023, listing up to $50,000 in assets and $1 million to $10 million
in liabilities. The petition was signed by Peter Odagbodo as
president.
Judge Elizabeth L. Gunn presides over the case.
John D. Burns, Esq. at The Burns Law Firm, LLC represents the
Debtor as counsel.
ABBOTT LABORATORIES: Dismissal of Economic Loss Claims Upheld
-------------------------------------------------------------
The United States Court of Appeals for the Seventh Circuit affirmed
the dismissal of an Amended Consolidated Class Action Complaint
brought by "economic loss plaintiffs" in In re Recalled Abbott
Infant Formula Products Liability Litigation, Case No.
1:22-cv-04148, pending in the U.S. District Court for the Northern
District of Illinois.
Plaintiffs in this case are a potential class of consumers who
purchased infant formula manufactured by Abbott Laboratories at a
facility later deemed unsanitary. As a result of a Food and Drug
Administration investigation, Abbott initiated a voluntary recall
of all infant formula produced at that plant. After the recall,
the Plaintiffs sued, claiming economic harm based on a potential
risk of injury due to the unclean conditions.
All cases were consolidated for pretrial proceedings. The cases
include two categories of claims: (i) personal injury plaintiffs --
complaints seeking recovery for personal (i.e., medical) injuries
to children purportedly caused by consumption of Abbott's formula;
and (ii) economic harm plaintiffs -- putative class claims
asserting purely economic losses on account of Abbott's conduct.
In February 2023, the Economic Loss Plaintiffs filed an Amended
Consolidated Class Action Complaint. They allege violations of
various state consumer fraud acts, and claims for unjust
enrichment, breach of the implied warranty of merchantability, and
negligent misrepresentation on behalf of a nationwide class and
twenty state sub-classes of consumers who purchased later-recalled
Abbott products dating back to April 1, 2018.
Plaintiffs allege "there was a risk the products were contaminated
with [harmful] bacteria," and the products "may [have] be[en]
adulterated" and were "potentially" contaminated. Those allegations
are styled as both a "benefit of the bargain" and a "premium price"
theory of injury. For the benefit of the bargain theory,
plaintiffs argue that because the formula had a risk of
contamination, they did not get what they bargained for, safe and
nutritious infant formula. For the premium price theory,
plaintiffs seek economic loss stemming from a premium paid for
Abbott's infant formula they would not have otherwise paid if they
had known of the risk of contamination.
Abbott moved to dismiss the complaint. The district court granted
the motion, and an appeal followed. The appellate was captioned
Economic Loss Plaintiffs v. Abbott Laboratories, Case No.
0:23-cv-02525, filed in the U.S. Court of Appeals Seventh Circuit
on August 4, 2023.
The appeal concerns only the second category of claims. The
personal injury cases remain pending in the district court.
Article III of the Constitution limits federal judicial power to
certain 'cases' and 'controversies,' and the 'irreducible'
constitutional minimum' of standing contains three elements. Those
three elements are (1) an injury in fact that is (2) fairly
traceable to the challenged action of the defendant and (3) is
likely, not merely speculative, that the injury will be redressed
by a favorable decision.
"Because the injury claimed does not support Article III standing,
we affirm the district court's dismissal," Seventh Circuit Judge
Michael B. Brennan opined. He said the Plaintiffs' risk-of-harm
theory of injury does not support Article III standing.
"The Plaintiffs' alleged injury is hypothetical or conjectural,"
added Judge Brennan. "When purchasing the infant formula,
plaintiffs received what they asked for. At that point, there was
no known risk of contamination and no loss of the benefit of the
bargain or premium price paid. Once plaintiffs learned of the
unsanitary conditions at the Sturgis facility and potential risk of
contamination, then they were told not to use the formula, and
Abbott offered a refund. So, there was not a time when plaintiffs
were at a risk of harm."
The Seventh Circuit further held that Plaintiffs do not claim that
the specific product they bought was contaminated. They plead some
facts about a persistent problem at Abbott's Sturgis facility which
could have affected many batches of the powdered infant formula.
But plaintiffs did not allege facts suggesting that contamination
of Abbott's products was sufficiently widespread so as to plausibly
affect any given product, including the ones they purchased. The
potential risk of contamination is not enough to confer standing.
A full-text copy of the ruling is available at:
https://www.govinfo.gov/content/pkg/USCOURTS-ca7-23-02525/pdf/USCOURTS-ca7-23-02525-0.pdf
AERWINS TECH: Faces Nasdaq Delisting Due to Delayed 10-K Filing
---------------------------------------------------------------
AERWINS Technologies Inc. disclosed that on April 17, the Company
received an Additional Staff Delisting Determination from the
Listing Qualifications Department of The Nasdaq Stock Market LLC.
The Additional Staff Determination noted that the Company is now
delinquent in filing its Form 10-K for the period ended December
31, 2023, which additional delinquency may serve as a separate
basis for the delisting of the Company's securities from Nasdaq.
The Additional Staff Determination notified the Company that the
Nasdaq Hearings Panel will consider this matter in their decision
regarding the Company's continued listing on The Nasdaq Capital
Market and that it should present its views with respect to this
additional deficiency to the Panel in writing no later than April
24, 2024.
The Company said it encountered delays in its efforts to file the
Form 10-K as a result of the previously reported discontinued
operations of A.L.I. Technologies Inc., a Japanese corporation
which is the Company's wholly owned indirect subsidiary, and as
part of the Company's operations, move to Los Angeles, California,
and continued the development of a line of FAA-compliant manned and
unmanned crafts for low-altitude flight. Following the
discontinuation, on December 27, 2023, A.L.I. filed a voluntary
bankruptcy petition with the Tokyo District Court, Civil Division
20, "Tokutei Kanzai Kakari" [Special Trusteeship Section], Case ID:
No. 8234 of 2023 (Fu). A bankruptcy trustee was appointed on
January 10, 2024, and proceedings have commenced. ALI's
discontinued operations include the manned air mobility business,
including the further development of the XTURISMO limited edition
hoverbike, the air mobility platform COSMOS, the computing
power-sharing business, drone photography business and drone and
artificial intelligence research and development business.
The Company expects to file the Form 10-K in the coming days.
Additional information about the Additional Determination can be
found in the Company's Form 8-K filed with the Securities and
Exchange Commission on April 23, 2024.
About AERWINS Technologies Inc.
AERWINS Technologies Inc., through its U.S.-based subsidiary, is
redesigning a single-seat optionally Manned Air Vehicle. The
Company aims to align this vehicle with the stringent requirements
of the Federal Aviation Administration's Powered Ultra-Light Air
Vehicle Category, setting a new standard for safe low-altitude
manned flight.
AIR CANADA: S&P Upgrades ICR to 'BB' on Lower Sustained Debt
------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Air Canada by
one notch to 'BB' from 'BB-'. At the same time, S&P raised its
issue-level rating on the company's secured debt by one notch to
'BBB-' from 'BB+', stemming from the upgrade on Air Canada. S&P
also raised its issue-level ratings on many of Air Canada's
enhanced equipment trust certificates (EETCs) reflecting its
upgrade on the company.
The stable outlook reflects S&P's view that Air Canada will sustain
credit measures that it views as commensurate for our issuer credit
rating, including adjusted FFO to debt above 30%.
S&P said, "Our upgrade primarily reflects our expectation for
adjusted debt to remain lower than we previously anticipated.
Adjusted debt for Air Canada at the end of 2023 was about 20% lower
than we previously anticipated owing primarily to strong
discretionary cash flow generation in the fourth quarter, which led
to more cash on the balance sheet that we net against debt. When
compared to our previous estimates, working capital inflows,
interest income, and EBITDA came in higher while lease liabilities
were lower. The lower debt levels we now assume is a key
contributor for the improvement in the adjusted credit measures we
expect over the next few years. These include adjusted FFO to debt
of about 40% through 2025 and in the mid-30% area in 2026, roughly
10% higher than we had expected in November.
"We still assume adjusted EBITDA will be down about 15% in 2024 as
higher operating costs and lower passenger revenue per available
seat miles (PRASM) more than offset capacity growth. We assume Air
Canada's costs per available seat mile (CASM), excluding fuel will
increase about 4% this year, which is at the higher end of
management's 2.5%-4.5% guidance and higher than we had previously
assumed. A potential new contract with its pilots later this year
is a key contributor to these higher costs. Bargaining talks began
early last year after the Air Canada's 10-year agreement reached in
2014 came to an end. We assume a new contract is likely to be
announced later this year and could include pay increases that are
higher than those that WestJet pilots were awarded last summer (a
24% increase in hourly wages by 2026). Other contributors to the
higher CASM we assume include new Air Passenger Protection Rules
(APPR) that relate to compensating customers for delays and
cancelations, additional airport fees, and general cost inflation.
Beyond 2024, we assume CASM, excluding fuel will be relatively flat
to down modestly as cost inflation is offset by the benefit of
additional capacity to leverage its fixed costs. Still, we expect
costs to remain well above pre-pandemic levels and an adjusted
EBITDA margin of about 15% (compared to 19% in 2019).
"We assume that the strong PRASM growth over the past couple of
years will partially reverse as additional capacity is added and
pent-up demand fades, reflecting pressure on yields and load
factors. Our demand outlook incorporates our view that interest
rate increases over the past couple of years have yet to have their
full effect on discretionary spending in Canada. That said, we
assume only a modest decline in PRASM of about 2.5% this year and
3% in 2025 as demand for air travel on Air Canada's Atlantic routes
remain robust through most of this year and traffic continues to
recover on Air Canada's pacific routes.
"We expect new aircraft investments to contribute to negative FOCF
generation and increased debt levels over the next few years. We
expect Air Canada's capital expenditures (capex) will step up
considerably in 2025 and 2026 to about C$3.2 billion and C$5.1
billion, respectively, as the company takes delivery of new
aircraft. These investments contribute to our assumption that Air
Canada's capacity will increase by about 30% by 2028 and lead to a
younger and more fuel-efficient fleet. The incoming aircraft
include a mix of narrowbody and widebody planes. The narrowbody
planes include A220s, A321XLRs, and B737-8x, which we expect will
be primarily used on Air Canada's Atlantic routes to support its
strategy to target sixth-freedom travelers from the U.S. on route
to Europe through Montreal and Toronto. The widebody planes
primarily increase B787-10s, a portion of which could be used to
replace some of Air Canada's existing B777-300 ER and/or A330-300
fleet. This additional future capacity appears to be targeting
travel demand spurred by growth in Canada's immigration over the
past few years, particularly to destinations in Southeast Asia,
India, China, North Africa, and the Middle East. In our opinion,
this expansion strategy provides Air Canada with the opportunity to
expand its premium international traffic and could lead to stronger
returns than if it were to add capacity in what is shaping up to be
an increasingly crowded domestic market. However, this strategy is
not without its risks. For instance, we expect the elevated capex
over the next few years will contribute to negative FOCF generation
beyond 2024, higher debt levels, weaker credit measures, and could
leave Air Canada with less financial flexibility if market
conditions deteriorate. That said, we also note there could be
delays in the timing of these deliveries, either due to
manufacturing delays at Boeing or if weaker air travel demand leads
Air Canada to renegotiate its delivery schedule.
"The stable outlook reflects our view that Air Canada will sustain
credit measures that we view as commensurate for our issuer credit
rating, including adjusted FFO to debt above 30% despite our
expectation of slowing air travel demand, higher costs, and
increased capital expenditures.
"We could downgrade Air Canada within the next 12 months if we
expect Air Canada to generate FFO to debt below 30% over the next
couple of years. This might occur from higher-than-expected costs
and the effects of a weaker North American economy, prolonged
geo-political escalations, or competitive pressures that reduce Air
Canada's traffic, revenues, and margins.
"We could raise our rating within the next 12 months if we see
sustained improvement in traffic and we continue to expect Air
Canada will generate and maintain FFO to debt above 45%. In this
scenario, we would expect the company to generate stronger EBITDA
and lower FOCF deficits than our current estimates. Greater clarity
regarding the potential impact of increased capacity, cost
inflation, and weaker macroeconomic conditions on Air Canada's
passenger traffic and margins is likely required for us to better
assess the sustainability of our forecast credit measures."
ALR CONSTRUCTION: Court OKs Cash Collateral Access on Final Basis
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee,
Knoxville, authorized ALR Construction, Inc. to use cash
collateral, on a final basis, in accordance with the budget.
The Debtor advises that U.S. Bank is a consensual secured creditor
known to it that asserts an interest in accounts and inventory as
cash collateral as that term is defined in 11 U.S.C. Section
363(a). U.S. Bank, is owed approximately $47,615 on a line of
credit and on revolving credit accounts as of the Petition Date and
claims an interest in accounts and inventory other than the sale of
inventory in the ordinary course of business as cash collateral as
that term is defined in 11 U.S.C. Section 363(a).
Global Merchant Cash, Inc. asserts and the Debtor may dispute that
(a) on or around March 1, 2022, GMC entered into the Agreement for
the Purchase and Sale of Future Receipts, by and between GMC, as
Buyer, Debtor, as Seller, and Raymond Joseph Graham IV, as Validity
Guarantor; (b) pursuant to the Agreement, GMC has a valid security
interest on the Debtor's assets, including the Debtor's cash and
accounts; (c) GMC duly perfected its lien by filing a UCC-1
Financing Statement on or around March 28, 2022; (d) the Debtor
defaulted on its obligations under the Agreement on or around July
6, 2022; and (e) pursuant to the Agreement, GMC is owed no less
than $166,664.
In addition to all existing liens held by US Bank and GMC, as
adequate protection for, and to the extent of, any diminution in
the value of US Bank's interest and GMC's interest in cash
collateral from and after the Petition Date, US Bank and GMC are
granted, as additional security, effective as of the Petition Date,
valid and perfected replacement liens, identical in scope,
description, and priority and perfected to the same extent as the
prepetition liens held by US Bank and GMC, in collateral of the
same type as such creditors have valid prepetition liens; provided
however, US Bank and GMC will not have a lien upon the avoidance
claims of the Debtor pursuant to Chapter 5 of the U.S. Bankruptcy
Code. The Replacement Liens are deemed valid and duly perfected as
of the Petition Date, and shall be valid and enforceable against
any trustee appointed in the Chapter 11 case or in any subsequent
proceedings upon the conversion of the Chapter 11 case to a case
under Chapter 7 of the Bankruptcy Code.
Other Secured Lenders (if any), without further action or
documentation, are granted a replacement lien under 11 U.S.C.
sections 361(2) and 363(f)(3) to the same extent, validity, and
priority that existed in the prepetition property of the bankruptcy
estate securing the indebtedness owed to them in accounts and any
other cash collateral that the Debtor has generated or will
generate post-petition, to the same nature, extent, priority, and
validity that their liens existed at filing, and said replacement
lien will be deemed perfected and binding to the same extent that
the lien was perfected and binding prepetition without the
necessity of filing any documents otherwise required under
nonbankruptcy law.
A copy of the order is available at https://urlcurt.com/u?l=iXpN9Q
from PacerMonitor.com.
About ALR Construction, Inc.
ALR Construction, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Tenn. Case No. 24-30127) on
January 25, 2024. In the petition signed by Raymond Graham IV,
president, the Debtor disclosed up to $500,000 in assets and up to
$10 million in liabilities.
Judge Suzanne H Bauknight oversees the case.
Brenda G. Brooks, Esq., at Moore & Brooks, represent the Debtor as
legal counsel.
AMK TIKI: Seeks to Hire Genova Malin & Trier LLP as Counsel
-----------------------------------------------------------
AMK Tiki LLC seeks approval from the U.S. Bankruptcy Court for the
Southern District of New York to employ Genova Malin & Trier LLP as
counsel.
The firm will render these services:
a. give the Debtor legal advice with respect to its powers and
duties in its financial situation and management of the property of
the Debtor;
b. take necessary action to void liens against the Debtor's
property;
c. prepare and amend, on behalf of the Debtor, necessary
petitions, schedules, orders, pleadings and other legal papers;
and
d. perform all other legal services for the Debtor as Debtor
which may be necessary herein.
The firm will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Michelle Trier, Esq., an attorney at Genova, Malin & Trier,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Michelle L. Trier, Esq.
Genova, Malin & Trier LLP
1136 Route 9, Suite 1
Wappingers Falls, NY 12590
Tel: (845) 298-1600
Fax: (845) 298-1600
About AMK Tiki LLC
AMK Tiki LLC, filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y. Case No. 24-35358) on April 10, 2024. The Debtor hires
Genova Malin & Trier LLP.
ANCHOR PACKAGING: S&P Affirms 'B' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on Anchor
Packaging LLC. S&P also affirmed its 'B' issue-level ratings to the
company's senior secured term loan. The recovery rating remains
'3'.
S&P said, "The stable outlook reflects our expectation that Anchor
Packaging will generate low- to mid-single digit organic revenue in
2024 and expand its EBITDA margins as the company benefits from
cost-saving initiatives and volume growth into higher-margin rigid
polypropylene products. Despite the issuance of incremental debt,
we expect S&P Global Ratings-adjusted debt leverage in the 5.5x to
6.0x range at year-end 2024."
Anchor announced its plan to amend and extend its existing
revolving credit facility and first-lien term loan, which will
include an upsized $125 million revolving credit facility, and an
incremental $203 million first-lien term loan to fund a
distribution to shareholders.
The new issuance will increase leverage in 2024. Anchor Packaging
plans to amend and extend its revolving credit facility, which will
upsize the capacity to $125 million and extend the maturity three
years to April 17, 2029. It will also amend and extend its
first-lien term loan, including issuing an incremental $203 million
to fund a distribution to shareholders. The term loan will also
have its maturity extended by three years to July 18, 2029.
Following the refinancing, S&P expects Anchor Packaging's reported
debt will increase, which it projects will increase leverage to
5.5x to 6.0x in 2024, up from 4.3x in 2023.
S&P said, "The stable outlook reflects our expectations that the
company will benefit from low- to mid-single digit organic volume
growth, a favorable shift in grocery demand toward higher-margin
rigid products, and operating improvements from previous years of
investment. The company has recently secured new business within
its higher-margin rigid packaging products, which should lead to
revenue and EBITDA growth over the next 12 months. In addition, we
expect the completion of customer inventory destocking will help
drive an increase in total volumes year over year. The combination
of volume recovery from destocking effects and new business wins
will be slightly offset by persistent inflation challenging grocery
and quick service restaurant sales. As a result, we believe the
company will be able to generate low- to mid-single digit organic
revenue growth in 2024 and 2025.
"We expect the company will report year-over-year EBITDA margin
expansion for fiscal 2023 due to previous years of capital
investment to reduce conversion costs and build additional
capacity. The additional capacity should help support the new
business wins, providing incremental EBITDA in 2024 and further
expanding margins for the year. We expect topline growth and
continued improvement in EBITDA margins.
"We expect free operating cash flows (FOCF) to decline in 2024,
decreasing FOCF to debt.Following the transaction, we expect cash
interest expense to increase by about $20 million in 2024 compared
to 2023. The company has also indicated that tax income paid will
increase in 2024, further burdening FOCF. In addition, we expect
the company will need to build inventory to support revenue growth
in 2024 and beyond, leading to an outflow from net working capital
of about $5 million annually. Anchor Packaging's additional
capacity and previous years of capital investment will likely allow
the company to decrease capital expenditures (capex) as a percent
of revenues. Overall, we expect FOCF to decline in 2024 due to the
increase in cash interest expense, higher annual tax income paid,
and net working capital outflows, partially offset by lower annual
capex. We believe the combination of reported debt increasing by
$200 million and FOCF declining in 2024 will lead to FOCF to debt
in the 3% to 4% range in 2024. The combination of continued topline
growth and EBITDA margin growth should result in FOCF to debt
improving to above 4% in 2025.
"The stable outlook on Anchor Packaging reflects our expectation
for modest revenue growth in 2024, driven by new business wins and
recovery of volumes from destocking effects. We believe leverage
will remain in the 5.5x to 6.0x range in 2024 due to EBITDA growth,
primarily driven by volume growth into higher-margin categories and
improvement in operating efficiencies."
S&P could lower its rating if:
-- Leverage increased above 6.5x with limited prospects for
improvement; or
-- Anchor pursues debt-financed acquisitions or shareholder
returns that delay expected deleveraging.
S&P could raise its rating if:
-- Anchor improves its scale and scope of operations while
maintaining strong EBITDA margins;
-- The company's adjusted debt-to-EBITDA ratio improves to less
than 5x on a sustained basis; and
-- S&P believes the sponsor is committed to maintaining financial
policies that will support this improved level of leverage.
S&P said, "Environmental factors are a neutral consideration in our
credit rating analysis on Anchor. The company manufactures rigid
plastic packaging products that could be subject to substitution
risk over the long-term as concerns about waste and pollution rise
among customers and consumers. We view plastic packaging, with its
limited recyclability and overall low recycling rates, as having a
larger pollution impact compared to other substrates. Governance is
a moderately negative consideration, as is the case for most rated
entities owned by private-equity sponsors. We believe Anchor's
highly leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
owners." This also reflects the generally finite holding periods
and a focus on maximizing shareholder returns.
APPLIED DNA: Effects 1-for-20 Reverse Stock Split
-------------------------------------------------
Applied DNA Sciences, Inc. effected a 1-for-20 stock split of its
common stock. The effective time of the reverse stock split was
12:01 a.m. Eastern Time, Thursday, April 25, 2024. Applied DNA
common stock began trading on a split-adjusted basis commencing
upon market open on Thursday, April 25, 2024.
Following the reverse stock split, the Company's common stock will
continue to trade on the Nasdaq Capital Market under the symbol
"APDN" with the new CUSIP number, 03815U409. The CUSIP number for
the Company's publicly traded warrants will not change.
At the effective time of the reverse stock split, every 20 shares
of Applied DNA issued and outstanding common stock will be
automatically converted into one issued and outstanding share of
common stock without any change in the par value of $0.001 per
share. The reverse stock split will reduce the number of issued
and outstanding shares of the Company's common stock from
approximately 17.26 million shares to approximately 863,000
shares.
The total authorized number of shares will not be reduced.
Proportional adjustments will be made to the number of shares of
common stock issuable upon exercise or vesting of the Company's
outstanding stock options, restricted stock units, and warrants, as
well as the applicable exercise or conversion prices, and to the
number of shares issuable under the Company's equity incentive
plans and other existing agreements. No fractional shares will be
issued in connection with the reverse stock split, and fractional
shares resulting from the reverse stock split will be rounded up to
the nearest whole share.
As previously disclosed, at a special meeting of stockholders held
on April 15, 2024, the Company's stockholders voted to approve a
proposal granting the Company's Board of Directors the discretion
to amend the Company's certificate of incorporation to effect a
reverse stock split of the Company's common stock at a ratio of not
less than 1-for-5 and not more than 1-for-50. Following the
Special Meeting of Stockholders on April 15, 2024, the Company's
Board of Directors approved a 1-for-20 reverse stock split. The
reverse stock split is intended for Applied DNA to regain
compliance with the minimum bid price requirement of $1.00 per
share of common stock for continued listing on the Nasdaq Capital
Market.
Applied DNA's transfer agent, Equiniti Trust Company, will provide
information to stockholders regarding their stock ownership
following the reverse stock split. Stockholders holding their
shares in book-entry form or through a bank, broker, or other
nominee do not need to take any action in connection with the
reverse stock split. Their accounts will be automatically adjusted
to reflect the number of shares owned. Beneficial holders are
encouraged to contact their bank, broker or other nominee with any
procedural questions.
About Applied DNA
Applied DNA Sciences, Inc. -- http//www.adnas.com -- is a
biotechnology company developing technologies to produce and detect
deoxyribonucleic acid ("DNA"). Using the polymerase chain reaction
("PCR") to enable both the production and detection of DNA, the
Company operates in three primary business markets: (i) the
manufacture of synthetic DNA for use in nucleic acid-based
therapeutics; (ii) the detection of DNA in molecular diagnostics
testing services; and (iii) the manufacture and detection of DNA
for industrial supply chain security services.
Melville, NY-based Marcum LLP, the Company's auditor since 2014,
issued a "going concern" qualification in its report dated Dec. 7,
2023, citing that the Company has incurred significant losses and
needs to raise additional funds to meet its obligations and sustain
its operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
The Company has recurring net losses. The Company incurred a net
loss of $1,130,281 and generated negative operating cash flow of
$3,757,679 for the three-month period ended Dec. 31, 2023. At Dec.
31, 2023, the Company had cash and cash equivalents of $3,359,045.
The Company said these factors raise substantial doubt about the
Company's ability to continue as a going concern for one year from
the date of issuance of these financial statements.
ARCIMOTO INC: Receives Notice of Delisting From Nasdaq
------------------------------------------------------
Arcimoto, Inc. disclosed in a Form 8-K filed with the Securities
and Exchange Commission that on April 22, 2024, it received a
letter from the Listing Qualifications Staff of the Nasdaq Stock
Market LLC notifying the Company that its common stock is now
subject to delisting from Nasdaq.
The Company failed to comply with Nasdaq Listing Rules 5450(a)(1),
5450(b)(1)(A), 5250(c)(1) and 5250(f) and did not cure such
failure. The common stock will be delisted on May 1, 2024 unless
the Company requests an appeal, pays the $20,000 appeal fee and
requests a stay of delisting, pending the hearing. The appeal panel
will review any such request and notify the Company of its decision
no later than 15 calendar days after the request.
The Company also received notice it failed to maintain a minimum
market value of publicly held shares of $15,000,000 for greater
than 30 consecutive business days under Nasdaq Listing Rule
5450(b)(2)(c). If the Company regains this minimum market value
for ten consecutive business days during the next 180 days, it will
regain compliance.
About Arcimoto Inc.
Based in Eugene, Oregon, Arcimoto, Inc. -- http://arcimoto.com--
designs and manufactures electric vehicles. The Company's mission
is to catalyze the global shift to a sustainable transportation
system. Over the past 16 years, the Company has developed
technologies, platforms, and vehicles aimed squarely at rightsizing
daily mobility. To date, the Company has introduced six vehicle
products built on the first Arcimoto platform that target specific
niches in the vehicle market: its flagship product, the Fun Utility
Vehicle, for everyday consumer trips; the Deliverator for last-mile
delivery and general fleet utility, the Flatbed, Arcimoto's
solution for a rightsized pickup truck, and the Rapid Responder for
emergency services and security.
Arcimoto reported a net loss of $62.88 million in 2022 following a
net loss of $47.56 million in 2021.
Portland, Oregon-based Deloitte & Touche LLP, the Company's auditor
since 2022, issued a "going concern" qualification in its report
dated April 14, 2023, citing that the Company has incurred
significant losses and does not have sufficient cash on hand to
meet its obligations as they come due, which raises substantial
doubt about its ability to continue as a going concern.
The Company has incurred significant losses since inception and
management expects losses to continue for the foreseeable future.
In addition, the Company does not have sufficient cash on hand to
pay obligations as they come due.
"Management has evaluated these conditions and concluded that they
raise substantial doubt about the Company's ability to continue as
a going concern for a period of at least one year from the issuance
of these unaudited financial statements. Management has initiated
a series of actions to alleviate the Company's financial situation:
(1) reducing headcount significantly via lay-offs and an unpaid
furlough program that started at the beginning of the fourth
quarter of 2022 and that have continued; (2) temporarily suspending
production in the first quarter of 2023 in order to relocate
operations to a new facility and focus purchases on the minimum
needed to resume production, which was resumed in February 2023;
(3) negotiating payment plans with the Company's vendors that are
critical to the Company's operations; and (4) monetizing assets
that may not be critical to the core business. Management also
plans to pursue other financing solutions through the credit and
equity markets. There can be no assurance that the Company will be
able to secure such additional financing or, if available, that it
will be on favorable terms or that the Company will be able to
sufficiently reduce costs for any such additional financing to meet
its needs. Therefore, the plans cannot be deemed probable of being
implemented. As a result, the Company has concluded that
management's plans do not alleviate substantial doubt about the
Company's ability to continue as a going concern," Arcimoto said in
its Quarterly Report for the period ended Sept. 30, 2023.
ASHEVILLE PACKING: Wins Cash Collateral Access on Final Basis
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina, Asheville Division, authorized Asheville Packing, Inc. to
use cash collateral on a final basis, in accordance with the
budget, with a 10% variance.
As previously reported by the Troubled Company Reporter, there are
nearly a dozen active UCC financing statements on file with the
North Carolina Secretary of State potentially encumbering the
Debtor's inventory, accounts receivable, general intangibles, and
the proceeds thereof.
U.S. Small Business Administration, White Road Capital, LLC,
Avanza, Star Funding, IMerchants, Kesef Funding, Iruka, AmeriFi
CapitalLLC, and potentially other creditors assert an interest in
the Debtor's cash collateral.
The court ruled any and all secured parties with properly perfected
secured claims within the meaning of 11 U.S.C. Section 506 are
granted, as assurance of adequate protection, a valid, attached,
choate, continuing, perfected, and otherwise enforceable security
interest in post-petition assets acquired using the cash collateral
to the same extent and priority as existed pre-petition.
Specifically as to the SBA, the SBA will not, by accepting the
interim adequate protection payment proposed by the Debtor through
the Motion or otherwise, be prejudiced from arguing for more or
different adequate protection at the Second Interim Hearing or
otherwise, all of the SBA's rights to seek relief from stay,
additional assurances of payment, or any and all other relief fully
preserved to the fullest extent allowed by law or equity.
A copy of the order is available at https://urlcurt.com/u?l=oifIpw
from PacerMonitor.com.
About Asheville Packing, Inc.
Asheville Packing, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. N.C. Case No. 24-10019) on
February 20, 2024. In the petition signed by Charles C. Costigan,
president, the Debtor disclosed up to $1 million in both assets and
liabilities.
Judge George R. Hodges oversees the case.
Michael L. Martinez, Esq., at Grier Wright Martinez, PA, represents
the Debtor as legal counsel.
ASHFORD HOSPITALITY: CEO Rob Hays Steps Down; S. Zsigray to Succeed
-------------------------------------------------------------------
Ashford Hospitality Trust, Inc. on April 18, 2024, announced that
Rob Hays, the current President and Chief Executive Officer of
Ashford Trust, will be stepping down effective June 30, 2024 after
nearly 20 years of dedicated service to the Company. The Company's
current Senior Vice President of Corporate Finance & Strategy,
Stephen Zsigray, will succeed him at that time to become Ashford
Trust's President and Chief Executive Officer. Mr. Hays will spend
the next few months working alongside Stephen on a smooth
transition before pursuing plans to work with his father on a
unique business opportunity in an industry outside of real estate.
"I've had the pleasure of supporting the Company and our
hospitality business for almost two decades and consider myself
blessed to have guided this wonderful organization over the past
four years. Were it not for this opportunity I have, I would
undoubtedly be at Ashford for the rest of my career," said Rob
Hays, Ashford Trust's current President and Chief Executive
Officer. "I've had the privilege of working with Stephen for many
years. He is an exceptional leader and a terrific successor,
possessing great vision and a deep understanding of our business
and the industry. Ashford Trust is well positioned for long-term
success."
"We are incredibly grateful to Rob for his immense dedication and
commitment to our organization," commented Monty J. Bennett,
Ashford Trust's Chairman of the Board. "Although we're disappointed
with his departure, we fully appreciate and respect his desire to
pursue his personal plans and business endeavors." Mr. Bennett
continued, "The Board is thrilled to have Stephen take on expanded
responsibilities at Ashford Trust. He's played a major role in the
Company's success over the last decade and is a perfect fit to be
Rob's successor. I am confident that the transition to new
leadership will be seamless."
Stephen Zsigray currently serves as Ashford Trust's Senior Vice
President of Corporate Finance & Strategy, a position he has held
since May 2020. Mr. Zsigray also heads Ashford Inc.'s cash
management platform and oversees corporate hedging strategy. Since
2020, Mr. Zsigray has helped the platforms raise more than $1.2
billion in common and preferred equity, secure over $1 billion in
new corporate and property-level debt financing and negotiated
maturity extensions on over $3 billion in mortgage debt.
Additionally, Mr. Zsigray serves as Chief Financial Officer and
Treasurer of Stirling Hotels & Resorts, a position he has held
since November 2023.
Mr. Zsigray joined Ashford in 2014 as a trader and portfolio
manager in Ashford's investment management division, and
subsequently served as President and Chief Operating Officer of
OpenKey, an Ashford-affiliated hospitality technology company that
provides digital guest key and access control solutions to hotels
worldwide. Prior to joining the Company, Mr. Zsigray was with UBS
Investment Bank in New York, where he traded and helped clients
structure derivatives across equity, fixed income, and commodity
markets. He began his career with Deloitte Consulting in St. Louis,
where he advised Fortune 500 clients on issues related to mergers
and acquisitions, business transformation, and process
improvement.
Mr. Zsigray earned a Bachelor of Science in Business Administration
from Saint Louis University, and graduated from Indiana
University's Kelley School of Business with an MBA in Finance. He
currently serves on the Advisory Council for the North Texas Food
Bank and has advised a number of non-profit organizations in the
Dallas metroplex. Mr. Zsigray previously served as an Executive
Board Member of the Dallas Security Traders Association.
About Ashford Hospitality
Headquartered in Dallas, Texas, Ashford Hospitality Trust, Inc.
operates as a self-advised real estate investment trust focusing on
the lodging industry. As of September 30, 2023, the Trust had $3.7
billion in total assets against $3.9 billion in total liabilities.
* * *
Egan-Jones Ratings Company, on May 5, 2023, maintained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Ashford Hospitality Trust, Inc.
AVIVAGEN INC: Commences Insolvency Proceedings
----------------------------------------------
Avivagen Inc., has made a voluntary assignment in bankruptcy for
the benefit of its creditors pursuant to section 49 of the
Bankruptcy and Insolvency Act. BDO Canada Limited has consented to
act as Licensed Insolvency Trustee and will administer the estate
and realize on the Company's assets in accordance with the BIA.
A notice of the bankruptcy and particulars of the first meeting of
creditors will be sent to creditors by mail in the coming days.
Avivagen announced on May 18, 2023 that it had formed a Special
Committee of the Board of Directors to explore strategic
alternatives to maximize value for all stakeholders of the Company.
The Special Committee explored many alternatives and engaged with
many of the world's leading animal health and animal feed and
nutrition companies, including Fortune 500 companies. Avivagen
connected with existing suppliers, distributors, and new parties,
leading to a number of reviews of the opportunity under
confidentiality and with access to the Company's core information.
One international conglomerate, specialized in the animal health
industry, put forward a non-binding letter of intent that was
signed and that would have seen a significant value ascribed to the
animal health business of Avivagen. Following the completion of an
agreed to exclusivity period and with significant diligence
conducted, the other party notified Avivagen of a change at their
company and that they could no longer complete the transaction. The
LOI is no longer valid and other parties were contacted to engage
in a strategic transaction, with conversations not producing an
offer for the Company or its assets.
After a careful review of available options under the process to
find strategic alternatives, and following thorough consultation
with its legal and financial advisors, the Special Committee and
the entire Board of Directors determined that the only option was
to file a bankruptcy under the BIA. Despite the growing industry
enthusiasm for antibiotic-free, sustainable food production and
Avivagen's encouraging field and commercial results, including with
customers in multiple countries, there are no viable opportunities
to raise additional capital in the current market conditions and
Avivagen was unable to identify a suitable solution available in
the near term.
As a result of the contemplated transaction under LOI not being
able to complete and insufficient resources, Avivagen has missed
its regulatory requirements to file the following documents:
-- audited annual financial statements for the year ended
October 31, 2023;
-- management's discussion and analysis relating to the audited
annual financial statements for the year ended
October 31, 2023; and
-- certification of the foregoing filings as required by National
Instrument 52-109 Certification of Disclosure in Issuers' Annual
and Interim Filings.
Trading in the common shares of the Company on the TSXV has been
halted and it is anticipated that the trading thereof will continue
to be halted permanently pending de-listing.
"The decision to initiate a bankruptcy of the Company has been the
hardest decision in the entire journey of working for Avivagen -- a
journey of science and evidence to bring better health to animals
and people alike," stated Kym Anthony, CEO of Avivagen Inc. "I
regret the impact the restructuring and bankruptcy of our business
will have on our valued stakeholders. This has been an incredibly
difficult decision, but is the only one available to us now."
About OxC-beta(TM) Technology and OxC-beta(TM) Livestock
Avivagen's OxC-beta(TM) technology is derived from Avivagen
discoveries about -carotene and other carotenoids, compounds that
give certain fruits and vegetables their bright colours. Through
support of immune function the technology provides a non-antibiotic
means of promoting health and growth. OxC- beta(TM) Livestock is a
proprietary product shown to be an effective and economic
alternative to the antibiotics commonly added to livestock feeds.
The product is currently available for sale in the United States,
Mexico, Philippines, Taiwan, New Zealand, Thailand, Australia and
Malaysia.
Avivagen's OxC-beta(TM) Livestock product is safe, effective and
could fulfill the global mandate to remove all in-feed antibiotics
as growth promoters. Numerous international livestock trials with
poultry and swine using OxC-beta(TM) Livestock have proven that the
product performs as well as, and, sometimes, in some aspects,
better than in-feed antibiotics.
About Avivagen Inc.
Avivagen Inc. is a life sciences corporation focused on developing
and commercializing products for livestock, companion animal and
human applications that safely enhance feed intake and support
immune function, thereby supporting general health and performance.
Targeted markets include Livestock Productivity and Pet Wellness.
Avivagen is publicly listed on the TSX Venture Exchange under the
ticker symbol "VIV" and OTC Pink under the ticker symbol "CHEXF."
B&C FAMILY: Hires John P. Forest as Bankruptcy Counsel
------------------------------------------------------
B&C Family LLC seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Virginia to employ John P. Forest, II,
Esq., an attorney practicing in Fairfax, Va., to handle its Chapter
11 case.
The firm's services include giving the Debtor legal advice with
respect to its powers and duties as a debtor and performing all
other legal services for the Debtor which may be necessary to
advance this case to a conclusion.
Mr. Forest will be compensated at his hourly rate of $400.
In a court filing, Mr. Forest disclosed that he is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The attorney can be reached at:
John P. Forest, II, Esq.
11350 Random Hills Rd., Suite 700
Fairfax, VA 22030
Telephone: (703) 691-4940
Email: john@forestlawfirm.com
About B&C Family LLC
B&C Family is primarily engaged in renting and leasing real estate
properties.
B&C Family, LLC in Herndon VA, filed its voluntary petition for
Chapter 11 protection (Bankr. E.D. Va. Case No. 24-10685) on April
10, 2024, listing as much as $1 million to $10 million in both
assets and liabilities. George Kolakis as manager, signed the
petition.
LAW OFFICE OF JOHN P. FOREST, II serve as the Debtor's legal
counsel.
BIG DOG: Court OKs Interim Cash Collateral Access
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado authorized
Big Dog, LLC d/b/a Vacuums R Us & Sewing Too to use cash
collateral, on an interim basis, in accordance with the budget,
with a 15% variance.
As previously reported by the Troubled Company Reporter, the Debtor
needs immediate use of the Operating Funds and the Bank Collateral
to operate its business and prevent diminution in value of the
assets.
Herb Lawson d/b/a Vacuums R Us was the predecessor-in-interest to
the Debtor. The Debtor was a vacuum sales and repair shop that
operated from a property in Arvada, Colorado. In 2018, Ms. Wolcott
purchased the property and its assets for $1.415 million, partially
funded by a Small Business Association loan and a promissory note.
The Debtor has since expanded into sewing machine sales and repairs
under the trade name Vacuums R Us and Sewing Too. To fund the
purchase, the Debtor and BDP closed on a $1.360 million loan from
Midwest Regional Bank as part of the U.S. Small Business
Administration's 7(a) Loan Program. The note is secured by a deed
of trust against the Arvada Property and is secured by a security
interest in all assets.
The Debtor also obtained an Economic Injury Disaster Loan from the
SBA in the amount of $150,000, with a promissory note requiring
monthly payments of $731 for 30 years. The Debtor and SVP Sewing
Brands entered into a Credit Application and Operating Agreement,
allowing the Debtor to purchase sewing machines and inventory for
retail sales.
The Debtor proposed the following in order to provide adequate
protection to the Bank for the Debtor's use of the Operating Funds
and the Bank Collateral:
a. The Debtor will provide such party with a replacement lien on
all post-petition accounts receivable to the extent that the use of
the receivables results in a decrease in the value of such party's
interest in the receivables pursuant to 11 U.S.C. Section 361(2);
b. The Debtor will make adequate protection payments to the Bank in
an amount equal to approximately 50% of its net cash after paying
all monthly bankruptcy expenses;
c. The Debtor will maintain adequate insurance coverage on all real
and personal property assets and adequately insure against any
potential loss;
d. The Debtor will provide all periodic reports and information
required by the Bankruptcy Code, Local Bankruptcy Rules, and the
Office of the U.S. Trustee;
e. The Debtor will only expend Operating Funds and the Bank
Collateral pursuant to the projections and budget subject to
reasonable fluctuation by no more than 20% for each expense item
unless prior written approval is obtained from the appropriate
bank;
f. The Debtor will retain in good repair all property in which the
Bank and any other secured creditors may claim an interest.
The court ruled that a final hearing on the matter is set for May
23, 2024 at 1:30 p.m.
A copy of the order is available at https://urlcurt.com/u?l=wxeCn9
from PacerMonitor.com.
About Big Dog LLC
Big Dog LLC filed its voluntary petition for Chapter 11 protection
(Bankr. D. Colo. Case No. 24-11534) on April 1, 2024, listing up to
$10 million in both assets and liabilities.
K. Jamie Buechler, Esq., at Buechler Law Office, LLC serves as the
Debtor's legal counsel.
BIOTRICITY INC: Nasdaq Grants Request for Continued Listing
-----------------------------------------------------------
Biotricity Inc. disclosed in a Form 8-K filed with the Securities
and Exchange Commission that on April 23, 2024, the Listing
Qualifications Department of the Nasdaq Stock Market notified the
Company that the Panel granted its request to continue its listing
on Nasdaq, subject to the Company meeting certain milestones
including an increase in its outstanding shares of common stock
through the issuance of shares of stock in certain stock offerings
and upon the conversion of certain convertible securities, the
receipt of shareholder approval of certain actions and on or before
July 29, 2024, the Company regaining compliance with all applicable
requirements for continued listing on The Nasdaq Capital Market.
On Aug. 1, 2023, Biotricity received a deficiency letter from
Nasdaq notifying the Company that, for the preceding 30 consecutive
business days, the Company's Market Value of Listed Securities was
below the $35 million minimum requirement for continued inclusion
on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule
5550(b)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(C),
Nasdaq granted the Company 180 calendar days, or until Jan. 29,
2024, to regain compliance with the MVLS Requirement.
On Jan. 30, 2024, the Company received a delisting determination
letter from the Staff advising the Company that the Staff had
determined that the Company did not regain compliance with the MVLS
Requirement by the Compliance Date because the Company's MVLS did
not close at or above $35 million for a minimum of 10 consecutive
business days prior to the Compliance Date. The Company submitted
a hearing request to the Nasdaq Hearings Panel to appeal the
Staff's delisting determination, which stayed the suspension of the
Company's securities and the filing of a Form 25-NSE pending the
Panel's decision. A hearing was held on April 9, 2024, at which
time the Company presented a plan to regain compliance with the
MVLS Requirement.
About Biotricity
Headquartered in Redwood City, CA, Biotricity Inc. is a medical
technology company focused on biometric data monitoring and
diagnostic solutions. The Company's aim is to deliver remote
monitoring solutions to the medical, healthcare, and consumer
markets, with a focus on diagnostic and post-diagnostic solutions
for lifestyle and chronic illnesses.
Richmond Hill, Ontario, Canada-based SRCO Professional Corporation,
the Company's auditor since 2015, issued a "going concern"
qualification in its report dated June 29, 2023, citing that the
Company has incurred recurring losses from operations, has negative
cash flows from operating activities, working capital deficiency
and has an accumulated deficit that raise substantial doubt about
its ability to continue as a going concern.
Biotricity said in its Quarterly Report for the period ended Dec.
31, 2023, that "The Company is in the early stages of
commercializing its first product and is concurrently in
development mode, operating a research and development program in
order to develop, obtain regulatory clearance for, and
commercialize other proposed products. The Company has incurred
recurring losses from operations, and as of December 31, 2023, had
an accumulated deficit of $123.1 million and a working capital
deficiency of $14.69 million. Those conditions raise substantial
doubt about its ability to continue as a going concern for a period
of one year from the issuance of these condensed consolidated
financial statements."
BREITMEYER FABRICATIONS: Hires Darby Law Practice as Counsel
------------------------------------------------------------
Breitmeyer Fabrications, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Nevada to employ Darby Law
Practice, Ltd. as counsel.
The Debtor requires legal counsel to:
(a) give advice regarding the rights, powers and duties of the
Debtor in the continued operation of its business and management of
its properties;
(b) take all necessary action to protect and preserve the
Debtor's estate;
(c) prepare legal papers;
(d) attend meetings and negotiations with the Subchapter 5
trustee, representatives of creditors, equity holders or
prospective investors or acquirers and other parties in interest;
(e) appear before the court, any appellate courts and the
Office of the United States Trustee to protect the interests of the
Debtor;
(f) pursue approval of confirmation of a plan of
reorganization and approval of the corresponding solicitation
procedures and disclosure statement; and
(g) perform all other necessary legal services.
The Debtor paid the firm a retainer of $9,500. The hourly rate for
the firm's professionals is $500, and will also be reimbursed for
reasonable out-of-pocket expenses incurred.
Kevin Darby, Esq., an attorney at Darby Law Practice, disclosed in
a court filing that his firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Kevin A. Darby, Esq.
Tricia M. Darby, Esq.
Darby Law Practice, Ltd.
499 W. Plumb Lane, Suite 202
Reno, NV 89509
Telephone: (775) 322-1237
Facsimile: (775) 996-7290
Email: kevin@darbylawpractice.com
tricia@darbylawpractice.com
About Breitmeyer Fabrications, Inc.
Breitmeyer Fabrications, Inc. is a hydraulic repair service
provider in Nevada. It conducts business under the name Superior
Hydraulics & Fabrication.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Nev. Case No. 24-50300) on March 28,
2024, with up to $50,000 in assets and up to $10 million in
liabilities. Martin W. Breitmeyer III, president, signed the
petition.
Judge Hilary L. Barnes presides over the case.
Kevin A. Darby, Esq., at Darby Law Practice represents the Debtor
as bankruptcy counsel.
CALAMP CORP: Nasdaq Accepts Plan to Regain Compliance
-----------------------------------------------------
CalAmp Corp. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on April 23, 2024, it received a letter
from the Listing Qualifications Department of The Nasdaq Stock
Market LLC notifying the Company that the Staff had accepted the
Company's plan to regain compliance with the minimum stockholders'
equity requirement set forth in Nasdaq Listing Rule 5450(b)(1)(A),
which requires a minimum of $10,000,000 in stockholders' equity for
continued listing on The Nasdaq Global Select Market.
As previously disclosed, on Jan. 18, 2024, the Staff notified the
Company that it no longer satisfied the Stockholders' Equity
Requirement. The Company thereafter submitted a compliance plan
for the Staff's review. The Staff's acceptance of the Company's
plan provides the Company until July 16, 2024, to demonstrate
compliance with the Stockholders' Equity Requirement.
If the Company fails to demonstrate compliance with the
Stockholders' Equity Requirement within the time allotted, the
Company's Common Stock would be subject to delisting from Nasdaq.
In such case, the Company would be entitled to a hearing before the
Nasdaq Hearings Panel. The Company's request for a hearing would
stay any delisting action by the Staff at least until the Panel
considers the Company's plan and any extension granted by the
Company expires.
About CalAmp
CalAmp Corp. is a connected intelligence company that leverages a
data-driven solutions ecosystem to help people and organizations
improve operational performance. The Company solves complex
problems for customers within the market verticals of
transportation and logistics, commercial and government fleets,
industrial equipment, K12 fleets, and consumer vehicles by
providing solutions that track, monitor, and protect their vital
assets.
CalAmp Corp. reported a net loss of $32.49 million for the year
ended Feb. 28, 2023, a net loss of $27.99 million for the year
ended Feb. 28, 2022, a net loss of $56.31 million for the year
ended Feb. 28, 2021, and a net loss of $79.30 million for the year
ended Feb. 29, 2020.
Management concluded that the uncertainties associated with the
Company's ability to cure noncompliance with the Nasdaq listing
requirements coupled with the repurchase rights of the 2025
Convertible Note holders under a fundamental change scenario
represent conditions raising substantial doubt regarding the
Company's ability to continue as a going concern.
"In response to these conditions, management intends to request a
waiver from the holder of the 2025 Convertible Notes to waive the
fundamental change provision in the Convertible Notes agreement and
concede the right to require the Company to repurchase the
Convertible Notes in the event that the Company is delisted from
the Nasda q. However, these plans have not been finalized and are
not within the Company's control, and therefore cannot be deemed
probable. As a result, the Company has concluded that management's
plans do not alleviate substantial doubt about the Company's
ability to continue as a going concern," said CalAmp in its
Quarterly Report for the period ended Nov. 30, 2023.
CAPITAL TACOS: Hires Johnson Pope Bokor as Counsel
--------------------------------------------------
Capital Tacos Holdings, LLC and its affiliates seek approval from
the U.S. Bankruptcy Court for the Middle District of Florida to
employ Johnson Pope Bokor Ruppel & Burns, LLP as counsel.
The firm will provide these services:
a. give the Debtors legal advice with respect to their duties
and obligations as Debtors in Possession or "DIP";
b. take necessary steps to analyze and pursue any avoidance
actions, if in the best interest of the estate;
c. prepare on behalf of the Debtors the necessary motions,
notices, pleadings, petitions, answers, orders, reports and other
legal papers required in this Chapter 11 case;
d. assist the Debtors in taking all legally appropriate steps to
effectuate compliance with the Bankruptcy Code; and
e. perform all other legal services for the Debtors which may be
necessary herein including closings of sales of the Debtors'
assets.
The firm will be paid at the rate of $500.
The firm received from the Debtor a retainer of $45,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Edward J. Peterson, Esq., a partner at Johnson Pope Bokor Ruppel &
Burns, LLP, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Edward J. Peterson, Esq.
Johnson Pope Bokor Ruppel & Burns, LLP
400 N Ashley Dr., Ste. 3100
Tampa, FL 33602
Tel: (813) 225-2500
Email: edwardp@jpfirm.com
About Capital Tacos Holdings, LLC
Capital Tacos Holdings, LLC, a company in Tampa, Fla., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
M.D. Fla. Case No. 24-01363) on March 15, 2024, with up to $500,000
in assets and up to $10 million in liabilities. James Marcus,
manager, signed the petition.
Edward J. Peterson, Esq., at Johnson, Pope, Bokor, Ruppel & Burns,
LLP, represents the Debtor as legal counsel.
CEL-SCI CORP: Appoints Mario Gobbo as Director
----------------------------------------------
CEL-SCI Corporation reported in a Form 8-K filed with the
Securities and Exchange Commission that on April 19, 2024, the
Company appointed Mario Gobbo to its Board of Directors.
Mr. Gobbo has nearly 40 years of banking and corporate finance
experience in healthcare and energy and is currently a managing
partner of Castruccio Advisors LLC. His expertise encompasses
venture capital and private equity as well as investment banking
and strategic advisory services. He serves on the Supervisory
Board of Cinkarna Celje, a fine chemicals company from Slovenia.
He is on the board of Zavarovalnica Triglav, the largest Slovene
insurance company spearheading healthcare insurance in Central
Europe and was Chairman of the Board and Chair of the Audit
Committee of Helix BioPharma, a Toronto-listed biotech company
developing interesting novel complex biomolecules to combat various
cancers. As an executive director, he was also on the board of
Lazard Brothers, London.
While Managing Director for Health Care Capital Markets and
Advisory with Natixis Bleichroeder in New York, from 2006 to 2009,
he secured transactions for the bank's M&A and equity capital
markets pharmaceuticals and life sciences group. He obtained
mandates for several IPOs and follow-on transactions on NASDAQ, as
well as advisory assignments for health care and medical devices
companies. When with the International Finance Corporation, a World
Bank Group institution dealing with private sector investments, the
team he led completed several highly successful equity and loan
investments in biotech and generic pharmaceutical companies and
funds in India, Latin America, China and Central Europe. From 1993
to 2001, he was with Lazard in London, where he created and managed
their Central and Eastern European operations, including Turkey.
Mr. Gobbo advised on M&A, fundraising and privatization efforts for
several key firms in the region, including transactions for the
pharmaceutical companies Pliva, Bosnalijek, Lek and Krka and
investments in the APDC Biotech fund, now renamed VentureEast, one
of the first Indian life sciences funds, and BVCF, a highly
successful and innovative healthcare fund in China. Prior to
Lazard, he worked with Swiss Bank Corporation International Ltd. in
London, where he worked on the IPO of Ares Serono, the Swiss
biotech company, subsequently sold to Merck KgaA. He was also on
the investment committee of AHF, an India focused health care fund,
Ocimum Biosolutions/Genelogic, an Indian contract research
organization, and CellPraxis, a US/Brazilian stem cell research,
privately owned firm.
Mario Gobbo holds a Bachelor of Arts in Organic Chemistry from
Harvard College, a Master of Science in Biochemistry from the
University of Colorado and an MBA, a Master of Business Economics
and a PhD (Management) from the Wharton School of the University of
Pennsylvania.
Mr. Gobbo will serve as a member of CEL-SCI's audit, nominating and
governance, and compensation committees.
About CEL-SCI
CEL-SCI Corporation CEL-SCI Corporation is a clinical-stage
biotechnology company dedicated to research and development
directed at improving the treatment of cancer and other diseases by
using the immune system, the body's natural defense system. CEL-SCI
is currently focused on the development of the following product
candidates and technologies: 1) Multikine, an investigational
immunotherapy under development for the potential treatment of
certain head and neck cancers; and 2) L.E.A.P.S. (Ligand Epitope
Antigen Presentation System) technology, or LEAPS, with several
product candidates under development for the potential treatment of
rheumatoid arthritis.
Potomac, Maryland-based BDO USA, P.C., the Company's auditor since
2005, issued a "going concern" qualification in its report dated
Dec. 31, 2023, citing that the Company has suffered recurring
losses from operations and has future liquidity needs that raise
substantial doubt about its ability to continue as a going
concern.
CEL-SCI will be required to raise additional capital or find
additional long-term financing to continue with its research
efforts. The ability to raise capital may be dependent upon market
conditions that are outside the control of the Company. The
ability of the Company to complete the necessary clinical trials
and obtain FDA approval for the sale of products to be developed on
a commercial basis is uncertain. Ultimately, the Company must
complete the development of its products, obtain the appropriate
regulatory approvals and obtain sufficient revenues to support its
cost structure. However, there can be no assurance that the
Company will be able to raise sufficient capital to support its
operations. Due to recurring losses from operations and future
liquidity needs, there is substantial doubt about the Company's
ability to continue as a going concern, according to the Company's
Quarterly Report for the period ended Dec. 31, 2023.
CENTERSTONE REALTY: Deborah Caruso Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 10 appointed Deborah Caruso, Esq., at
Rubin & Levin as Subchapter V trustee for Centerstone Realty Group,
Inc.
Ms. Caruso will be paid an hourly fee of $350 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Caruso declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Deborah J. Caruso, Esq.
Rubin & Levin
135 N. Pennsylvania St., Suite 1400
Indianapolis, IN 46204
Phone: (317) 860-2928
Email: dcaruso@rubin-levin.net
About Centerstone Realty Group
Centerstone Realty Group, Inc. is a real estate service company and
a R/E Max franchisee with over 30 affiliated licensed brokers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Ind. Case No. 24-01846) on April 12,
2024. In the petition signed by Lance Rhoades, president, the
Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Thomas C. Scherer, Esq., at Dentons Bingham Greenebaum, represents
the Debtor as legal counsel.
CHICKEN SOUP: Receives Delinquency Letter From Nasdaq
-----------------------------------------------------
Chicken Soup for the Soul Entertainment Inc. announced that on
April 18, 2024, the Company received a letter from The Nasdaq Stock
Market informing the Company that its securities may be delisted
from the Nasdaq Capital Market due to the fact the Company's Annual
Report on Form 10-K for fiscal year ended Dec. 31, 2023 had not
been filed yet.
Under Nasdaq rules, a company that receives a delist determination
for such a delinquency can request an appeal to a Nasdaq hearings
panel pursuant to the procedures set forth in the Nasdaq Listing
Rule 5800 Series. A request for a hearing regarding a delinquent
filing will stay the suspension of the Company's securities only
for a period of 15 days from the date of the request. The Company
intends to request a stay of the suspension. Additionally, the
Company has remedied its noncompliance with respect to the
delinquency by filing its 2023 Annual Report on Form 10-K on April
19, 2024. Additionally, the Company is currently undertaking
efforts to remedy its noncompliance with other Nasdaq rules as
discussed in Current Reports on Form 8-K (filed with the SEC on
March 29, 2024) and has an appeals hearing scheduled May 21, 2024
to address its future compliance.
About Chicken Soup
Chicken Soup for the Soul Entertainment, Inc. provides premium
content to value-conscious consumers. The Company is one of the
largest advertising-supported video-on-demand (AVOD) companies in
the US, with three flagship AVOD streaming services: Redbox,
Crackle and Chicken Soup for the Soul. In addition, the Company
operates Redbox Free Live TV, a free ad-supported streaming
television (FAST) service with nearly 170 channels as well as a
transactional video-on-demand (TVOD) service, and a network of
approximately 27,800 kiosks across the U.S. for DVD rentals. To
provide original and exclusive content to its viewers, the Company
creates, acquires, and distributes films and TV series through its
Screen Media and Chicken Soup for the Soul TV Group subsidiaries.
The Company's best-in-class ad sales organization is known to
advertisers as Crackle Connex, a sales platform of unique scale and
differentiated reach. Across Redbox, Crackle, Chicken Soup for the
Soul and Screen Media, the Company has access to over 50,000
content assets, with over 60,000 programming hours. Chicken Soup
for the Soul Entertainment is a subsidiary of Chicken Soup for the
Soul, LLC, which publishes the famous books series and produces
super-premium pet food under the Chicken Soup for the Soul brand
name.
New York, New York-based Rosenfield and Company, PLLC, the
Company's auditor since 2017, issued a "going concern"
qualification in its report dated April 19, 2024, citing that the
Company has suffered significant losses from operations and has a
net capital deficiency that raise substantial doubt about its
ability to continue as a going concern.
CIDARA THERAPEUTICS: Effects 1-for-20 Reverse Common Stock Split
----------------------------------------------------------------
Cidara Therapeutics, Inc. effected a reverse stock split of its
issued and outstanding common stock, at a ratio of 1-for-20. The
effective time of the reverse stock split was 5 p.m. ET on April
23, 2024. The Company's common stock began trading on a
split-adjusted basis commencing upon market open on April 24,
2024.
As previously disclosed, at a special meeting of stockholders held
on April 4, 2024, the Company's stockholders voted to approve a
proposal authorizing the Board of Directors of the Company to amend
the Company's certificate of incorporation to effect a reverse
stock split and a corresponding reduction in the authorized shares
of the Company's common stock at a ratio that is equal to half of
the reverse split ratio. On April 12, 2024, the Board of Directors
approved a 1-for-20 reverse stock split.
As a result of the reverse split, each 20 shares of the Company's
issued and outstanding common stock will be automatically combined
and converted into one issued and outstanding share of common
stock, par value $0.0001 per share. The Company's common stock
will trade under a new CUSIP number, 171757206, effective April 24,
2024, and remain listed on the Nasdaq Capital Market under the
symbol "CDTX". The reverse stock split reduces the number of shares
of common stock issuable upon the conversion of the Company's
outstanding shares of preferred stock and the exercise or vesting
of its outstanding stock options, restricted stock units and
warrants in proportion to the ratio of the reverse stock split and
causes a proportionate increase in the conversion and exercise
prices of such preferred stock, stock options and warrants.
No fractional shares of common stock will be issued as a result of
the reverse stock split. Stockholders of record who would
otherwise be entitled to receive a fractional share will receive a
cash payment in lieu thereof. The reverse stock split impacts all
holders of the Company's common stock proportionally and will not
impact any stockholder's percentage ownership of the Company common
stock (except to the extent the reverse stock split results in any
stockholder owing only a fractional share).
Cidara has chosen its transfer agent, Equiniti Trust Company, LLC
(Equiniti), to act as exchange agent for the reverse stock split.
Stockholders owning shares via a bank, broker or other nominee will
have their positions automatically adjusted to reflect the reverse
stock split and will not be required to take further action in
connection with the reverse stock split, subject to brokers'
particular processes. For those stockholders holding physical
stock certificates, Equiniti will send instructions for exchanging
those certificates for shares held in book-entry form representing
the post-split number of shares. Equiniti can be reached at (877)
248-6417 or (718) 921-8317.
About Cidara Therapeutics
Headquartered in San Diego, California, Cidara Therapeutics --
visit www.cidara.com -- is using its proprietary Cloudbreak
platform to develop novel drug-Fc conjugates (DFCs). These
targeted immunotherapies offer the unique opportunity to create
"single molecule cocktails" comprised of targeted small molecules
and peptides coupled to a human antibody fragment (Fc). DFCs are
designed to save lives and improve the standard of care for
patients facing cancers and other serious diseases by inhibiting
specific disease targets while simultaneously engaging the immune
system. In addition, Cidara received FDA and EC approval for
REZZAYO (rezafungin for injection), which it has licensed to
multiple partners to commercialize in the U.S. and ex-U.S.
San Diego, California-based Ernst & Young LLP, the Company's
auditor since 2014, issued a "going concern" qualification in its
report dated April 22, 2024, citing that the Company has suffered
net losses and negative cash flows from operating activities since
its inception and has stated that substantial doubt exists about
the Company's ability to continue as a going concern.
CLEARSIGN TECHNOLOGIES: Amends $5M Purchase Deal With Investor
--------------------------------------------------------------
ClearSign Technologies Corporation disclosed in a Form 8-K filed
with the Securities and Exchange Commission that on April 22, 2024,
the Company entered into an Amendment to the Securities Purchase
Agreement with a private purchaser to provide for, among other
things, a revised allocation of the Private Purchaser's
subscription between shares of Common Stock and pre-funded warrants
to purchase Common Stock in lieu thereof. Pursuant to the
Amendment, the Private Purchaser has subscribed for: (i) 2,249,763
shares of Common Stock, (ii) pre-funded warrants to purchase up to
3,155,642 shares of Common Stock and (iii) redeemable warrants to
purchase up to 8,108,106 shares of Common Stock. The Pre-Funded
Warrants are each exercisable for one share of Common Stock at an
exercise price of $0.0001 per share and will expire when exercised
in full. The Company is prohibited from effecting an exercise of
any Pre-Funded Warrants to the extent that such exercise would
result in the number of shares of Common Stock beneficially owned
by the holder and its affiliates exceeding 4.99% (or 9.99% at
election of the holder) of the total number of shares of Common
Stock outstanding immediately after giving effect to the exercise,
which percentage may be increased or decreased at the holder's
election not to exceed 9.99%. Except as otherwise expressly
provided for in the Amendment, the Securities Purchase Agreement
remains in full force and effect.
On April 19, 2024, ClearSign entered into the securities purchase
agreement with the Accredited Investor whereby the Company agreed
to issue shares of the Company's common stock, par value $0.0001
per share, or pre-funded warrants to purchase Common Stock in lieu
thereof, and redeemable warrants to purchase shares of Common
Stock, in a private placement for aggregate gross proceeds of
approximately $5,000,000 to be consummated concurrently with an
underwritten public offering.
About ClearSign Technologies
Headquartered in Tulsa, Oklahoma, ClearSign Technologies
Corporation -- www.clearsign.com -- designs and develops products
and technologies for the purpose of improving key performance
characteristics of industrial and commercial systems, including
operational performance, energy efficiency, emission reduction,
safety and overall cost-effectiveness. The Company's patented
technologies, embedded in established OEM products as ClearSign
Core and ClearSign Eye and other sensing configurations, enhance
the performance of combustion systems and fuel safety systems in a
broad range of markets, including the energy (upstream oil
production and down-stream refining), commercial/industrial boiler,
chemical, petrochemical, transport and power industries.
Santa Monica, California-based BPM CPA LLP, the Company's auditor
since 2011, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
CLEARSIGN TECHNOLOGIES: Appoints David Maley to Board of Directors
------------------------------------------------------------------
ClearSign Technologies Corporation announced that David Maley has
been appointed to its Board of Directors to fill the independent
director vacancy in the Board and to the Board's Audit & Risk
Committee.
David Maley brings 40 years of broad investment experience with
more than half of that period focused on micro-cap equity research
and portfolio management. Mr. Maley currently serves as the chief
investment officer and chief compliance officer of 1102 Partners,
LLC, a family office and investment advisory firm founded by Mr.
Maley in 2021. Prior to his current role, Mr. Maley served as a
senior vice president at Ariel Investments, where he was Lead
Portfolio Manager for the Ariel Micro-Cap Value Product fund and
the Ariel Small-Cap Deep Value Product fund. During that time he
was named a "Micro-Cap Superstar" in a 2014 Red Chip Review
publication. Mr. Maley also took on management of the domestic
trading team at Ariel Investments and chaired the Trade Oversight
Committee during his tenure at Ariel Investments. Prior to Ariel
Investments, Mr. Maley founded and ran Maple Hill Capital
Management and served as a Vice President and Senior Portfolio
Manager for ultra-high net worth clients at Harris Bank. Mr. Maley
began his career in institutional equity sales at Goldman Sachs.
He received an M.B.A from the University of Chicago Booth School Of
Business and a B.B.A in finance from the University Of Notre Dame.
"I am very pleased to welcome David Maley to ClearSign's Board of
Directors," said Jim Deller, Ph.D., chief executive officer of
ClearSign. "I believe David will bring valuable experience and
insight, in addition to adding his thoughtful and measured
contributions to our Board deliberations. I look forward to
working with him and the Board as we continue our commercial
growth," said Jim Deller, Ph.D.
About ClearSign Technologies
Headquartered in Tulsa, Oklahoma, ClearSign Technologies
Corporation -- www.clearsign.com -- designs and develops products
and technologies for the purpose of improving key performance
characteristics of industrial and commercial systems, including
operational performance, energy efficiency, emission reduction,
safety and overall cost-effectiveness. The Company's patented
technologies, embedded in established OEM products as ClearSign
Core, and ClearSign Eye and other sensing configurations, enhance
the performance of combustion systems and fuel safety systems in a
broad range of markets, including the energy (upstream oil
production and down-stream refining), commercial/industrial boiler,
chemical, petrochemical, transport and power industries.
Santa Monica, California-based BPM CPA LLP, the Company's auditor
since 2011, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the entity has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
CLEARSIGN TECHNOLOGIES: Closes $9.3 Million Public Offering
-----------------------------------------------------------
ClearSign Technologies Corporation announced the closing of an
underwritten public offering of 4,620,760 shares of its common
stock and redeemable warrants to purchase up to an aggregate of
4,620,760 shares of its common stock at a public offering price of
$0.91 per share and $0.01 per accompanying warrant. The warrants
have an exercise price of $1.05 per share, are exercisable
immediately upon issuance and redeemable upon certain conditions
and will expire five years following the date of issuance.
In a private placement completed concurrently with the public
offering, ClearSign issued to an accredited investor an aggregate
of 2,249,763 shares of common stock, pre-funded warrants to
purchase up to 3,155,642 shares of common stock and redeemable
warrants to purchase up to 8,108,106 shares of common stock. The
offering prices in the private placement were $0.91 per share and
$0.01 per redeemable warrants, or $0.9099 per pre-funded warrant
and $0.01 per redeemable warrants, as applicable. The pre-funded
warrants issued in the private placement are exercisable
immediately at a nominal exercise price of $0.0001. The redeemable
warrants issued in the private placement will be exercisable at an
exercise price of $1.05 per share, will be exercisable beginning
six months after issuance, redeemable upon certain conditions and
expire five years from the date of issuance.
Public Ventures, LLC acted as the sole book-running manager for the
public offering and as a placement agent for the private
placement.
Gross proceeds from the public and private offering were
approximately $9.3 million, excluding underwriting and placement
agent discounts and commissions and other offering-related
expenses.
ClearSign intends to use the net proceeds from the offerings for
working capital, research and development, marketing and sales, and
general corporate purposes.
The securities in the public offering were offered pursuant to a
prospectus supplement and an accompanying base prospectus forming
part of a shelf registration statement on Form S-3 (File No.
333-265967), which was previously filed with the Securities and
Exchange Commission and became effective on Aug. 12, 2022. A final
prospectus supplement and accompanying base prospectus relating to
the public offering was filed with the SEC and is available on the
SEC's website at www.sec.gov. Copies of the final prospectus
supplement and the accompanying base prospectus may be obtained for
free by contacting Public Ventures, LLC, 14135 Midway Rd, Suite
G-150, Addison, TX, 75001, by email at info@publicventures.com or
by telephone at (945) 262-9010.
The private placement was conducted pursuant to the exemption from
registration provided in Section 4(a)(2) under the Securities Act
of 1933 and/or Rule 506(b) promulgated thereunder.
About ClearSign Technologies
Headquartered in Tulsa, Oklahoma, ClearSign Technologies
Corporation -- www.clearsign.com -- designs and develops products
and technologies for the purpose of improving key performance
characteristics of industrial and commercial systems, including
operational performance, energy efficiency, emission reduction,
safety and overall cost-effectiveness. The Company's patented
technologies, embedded in established OEM products as ClearSign
Core, and ClearSign Eye and other sensing configurations, enhance
the performance of combustion systems and fuel safety systems in a
broad range of markets, including the energy (upstream oil
production and down-stream refining), commercial/industrial boiler,
chemical, petrochemical, transport and power industries.
Santa Monica, California-based BPM CPA LLP, the Company's auditor
since 2011, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the entity has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
CLEARSIGN TECHNOLOGIES: Provides Full Year 2023 Update
------------------------------------------------------
ClearSign Technologies Corporation provides an update on operations
for the year ended Dec. 31, 2023.
"We ended 2023 with some commercial momentum and that has carried
into the current year," said Jim Deller, Ph.D., chief executive
officer of ClearSign. "We have been able to deliver and start up
our initial boiler burner orders as well as some significant
process burner orders. Then just weeks ago, we announced new
California BACT emissions thresholds that were set based on the
performance of our operational installations, which we believe
provides another validating factor for our technology. As a result
of these developments we are seeing continued growing interest in
our capabilities and subsequent sales opportunities," concluded Dr.
Deller.
Recent strategic and operational highlights during, and subsequent
to, the end of the fourth quarter 2023 include:
Company Reported Record Quarter and Full Year Revenue: The Company
reported Fourth Quarter Revenue of $1.2 million compared to $50,000
for the fourth quarter of 2022. The Company reported $2.4 million
revenue for the full year 2023 compared to $374,000 for the
comparable period in 2022.
Receives Best Available Control Technology (BACT) Determinations
for Single and Multi Process-Burner Heaters: ClearSign's process
burner performance has been assessed as part of the South Coast Air
Quality Management District of California (SCAQMD) periodic public
participation process to enhance existing Best Available Control
Technology (BACT) determinations and its results have contributed
to the establishment of new BACT emissions limits for both single
and multi-burner configurations.
Announced Successful Start Up of Multi-Burner Heater in California
Project: The first eight burner heaters had a successful startup,
had independent source testing confirm that the emissions levels
are below guarantee, and are now in operation.
Received First Multi-Boiler Burner Purchase: Partner California
Boiler received a letter of intent for four boilers to be fitted
with the ClearSign Core (Rogue) burners as well as the purchase
order for the first boiler of the series. California Boiler has in
turn placed their order with ClearSign for the first burner.
Announced Public Offering and Concurrent Private Placement of
Common Stock and Warrants: The Company raised approximately $9.3
million in gross proceeds from an underwritten public offering and
concurrent private placement, which closed on April 23, 2024.
Cash, cash equivalents and short-term investments were
approximately $5.6 million as of Dec. 31, 2023.
There were 38,687,061 shares of the Company's common stock issued
and outstanding as of Dec. 31, 2023.
About ClearSign Technologies
Headquartered in Tulsa, Oklahoma 74133, ClearSign Technologies
Corporation -- www.clearsign.com -- designs and develops products
and technologies for the purpose of improving key performance
characteristics of industrial and commercial systems, including
operational performance, energy efficiency, emission reduction,
safety and overall cost-effectiveness. The Company's patented
technologies, embedded in established OEM products as ClearSign
Core and ClearSign Eye and other sensing configurations, enhance
the performance of combustion systems and fuel safety systems in a
broad range of markets, including the energy (upstream oil
production and down-stream refining), commercial/industrial boiler,
chemical, petrochemical, transport and power industries.
Santa Monica, California-based BPM CPA LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated March 29, 2024, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
CLINE'S CORNER: Case Summary & Eight Unsecured Creditors
--------------------------------------------------------
Debtor: Cline's Corner LLC
25137 Outer Road 27
Wayland, MO 63472
Business Description: The Debtor owns and operates an automotive
parts, accessories, and tire store.
Chapter 11 Petition Date: April 25, 2024
Court: United States Bankruptcy Court
Eastern District of Missouri
Case No.: 24-20062
Debtor's Counsel: Fredrich J. Cruse, Esq.
CRUSE CHANEY-FAUGHN
718 Broadway
P.O. Box 914
Hannibal, MO 63401-0914
Tel: 573-221-1333
Email: fcruse@cruselaw.com;
bjdaughtery@cruselaw.com
Total Assets: $3,145,303
Total Liabilities: $3,268,143
The petition was signed by Virgil Cline as member/manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's eight unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/NE64AWA/Clines_Corner_LLC__moebke-24-20062__0001.0.pdf?mcid=tGE4TAMA
CMG HOLDINGS: BF Borgers CPA Raises Going Concern Doubt
-------------------------------------------------------
CMG Holdings Group, Inc. disclosed in a Form 10-K Report filed with
the U.S. Securities and Exchange Commission for the fiscal year
ended December 31, 2023, that its auditor expressed that there is
substantial doubt about the Company's ability to continue as a
going concern.
Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since
2020, issued a "going concern" qualification in its report dated
April 22,2024, citing that the Company's negative cash flow from
operations raises substantial doubt about its ability to continue
as a going concern.
The Company had a net loss of $122,517 for the year ended December
31, 2023, compared to a net income of $17,617 for the year ended
December 31, 2022.
At December 31, 2023, the Company had assets totaling $1,989,786,
$1,378,425 in total liabilities, and $611,361 in total
stockholders' equity.
A full-text copy of the Company's Form 10-K is available at
https://tinyurl.com/255ttnaj
About CMG Holdings Group
Chicago, IL- based CMG Holdings Group, Inc. is a marketing
communications company focused on the operation of organizations in
the alternative advertising, digital media, experiential and
interactive marketing, and entertainment industry.
COMMUNITY HEALTH: Sells Cleveland Hospital to Hamilton Health Care
------------------------------------------------------------------
Community Health Systems, Inc. disclosed in Form 8-K Report filed
with the U.S. Securities and Exchange Commission that certain
wholly-owned subsidiaries of the Company, entered into an Asset
Purchase Agreement with Hamilton Health Care System, Inc. and
certain of its affiliates.
Pursuant to the Purchase Agreement, and subject to the terms and
conditions set forth therein, Purchaser has agreed to acquire
substantially all of the assets, and assume certain liabilities,
from the Selling CHS Entities related to the general acute care
hospital known as Tennova Healthcare - Cleveland, together with
certain related businesses, located in Cleveland, Tennessee.
The total base purchase price payable by Purchaser to the Selling
CHS Entities at the closing of the Transactions is $160 million in
cash, subject to adjustment based on closing net working capital
and the amount of any capital/finance leases assumed by Purchaser.
In addition, the Purchase Agreement provides that the Purchaser
would be required to pay additional cash consideration to the CHS
Selling Entities following the closing of the Transactions in an
amount, if any, to be determined based on additional supplemental
payments that may be realized by the Purchaser and the Facilities
following the closing of the Transactions as a result of the
potential modification to supplemental reimbursement programs as
more specifically provided in the Purchase Agreement. Such
additional consideration, if any, is subject to certain
reconciliation mechanisms specified in the Purchase Agreement which
may result in the payment in certain future time periods of
additional cash consideration to the CHS Selling Entities or in the
repayment to the Purchaser of additional cash consideration, if
any, received by the CHS Selling Entities.
The Purchase Agreement contains various representations, warranties
and covenants made by the parties. The Purchase Agreement also
provides for indemnification by the parties with respect to
breaches of representations, warranties and covenants by such
parties, as well as with respect to certain other indemnifiable
matters specified in the Purchase Agreement.
The closing of the Transactions is subject to the satisfaction or
waiver of certain closing conditions set forth in the Purchase
Agreement, which includes the expiration or termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended. Consummation of the Transactions is
currently expected to occur in the third quarter of 2024.
The Purchase Agreement may be terminated by either party under
certain circumstances set forth in the Purchase Agreement,
including if the Transactions are not consummated on or before
August 31, 2024.
About Community Health Systems Inc.
Community Health Systems, Inc. -- http://www.chs.net/-- is a
publicly traded hospital company and an operator of general acute
care hospitals in communities across the country. As of Oct. 25,
2023, the Company's subsidiaries own or lease 76 affiliated
hospitals with over 12,000 beds and operate more than 1,000 sites
of care, including physician practices, urgent care centers,
freestanding emergency departments, occupational medicine clinics,
imaging centers, cancer centers and ambulatory surgery centers.
For the year ended December 31, 2023, the net loss attributable to
Community Health Systems, Inc. stockholders was $133 million,
compared to net income of $46 million for the same period in 2022.
As of December 31, 2023, the Company had $14.5 million in total
assets, $15.3 million in total liabilities, $323,000 in redeemable
noncontrolling interests in equity of consolidated subsidiaries,
and $1.15 million in total stockholders' deficit.
* * *
As reported by the TCR on Dec. 15, 2023, Moody's Investors Service
downgraded CHS/Community Health Systems, Inc.'s Corporate Family
Rating to Caa2 from Caa1. Moody's said the downgrade of Community
Health's ratings reflects the company's very high level of the
financial leverage and the company's inability to generate positive
free cash flow despite some industry wide easing of labor pressure
in recent quarters.
As reported by the TCR on Dec. 20, 2023, S&P Global Ratings raised
its rating on Community Health Systems Inc. to 'CCC+' from 'SD'
(selective default). S&P said, "We believe Community Health's
capital structure is currently unsustainable. The company remains
highly leveraged with S&P Global Ratings-adjusted debt to EBITDA of
8.4x. In addition, the company has not established a track record
of sustained positive free cash flow generation. While we expect
improved EBITDA margins and positive cash flow in 2024, leverage
will remain high while the company has a significant interest
burden and maturities starting in 2026."
COMPASS MINERALS: Moody's Lowers CFR to B1 & Unsecured Notes to B2
------------------------------------------------------------------
Moody's Ratings downgraded Compass Minerals International, Inc's
corporate family rating to B1 from Ba3, its probability of default
rating to B1-PD from Ba3-PD and the rating of its senior unsecured
notes to B2 from B1. The speculative grade liquidity rating remains
at SGL-3. The outlook is stable.
RATINGS RATIONALE
Governance consideration is a key driver of this rating action
given the high leverage and the recent suspension of the two key
growth projects that consumed significant amount of capital over
the last few years. The ratings downgrade reflects an extremely
mild 2023-2024 winter and the failure to secure the contract with
the US Forest Service (USFS) for the use of magnesium
chloride-based aerial fire retardants for the 2024 fire season
after significant signs of corrosion were discovered in areas where
build-up of the retardant had occurred during airtanker inspections
by USFS. Moody's believes that the loss of the lucrative
fire-retardants growth opportunity for the foreseeable future and a
very warm winter will have a material negative impact on the
company's financial performance in FY2024 and, likely, in FY2025,
leading to higher leverage and, overall, weaker credit profile.
Compass is currently working on alternative, non-magnesium
chloride-based aerial fire-retardant products.
The B1 corporate family rating (CFR) reflects the company's rather
narrow business profile with most of the revenues generated by the
Salt segment, the lack of scale, geographic reach and high gross
debt levels for the company's size. The rating is also constrained
by the relatively unpredictable weather-related nature of the
de-icing salt and plant nutrition businesses with the continued
Ogden feedstock issues negatively impacting production of sulfate
of potash (SOP) and operating costs. The rating is supported by the
company's strong competitive position in the North American salt
industry, traditionally attractive EBITDA margins of the Salt
segment and ability to generate robust operating cash flow.
Moody's updated forecasts reflect expectations for a significant
decrease in the de-icing salt sales volumes in FY2024 from the
below-average 2022-2023 winter season, lower salt prices in FY2025
given the likely high customer inventories that will impact the
ongoing bidding season, no revenues from the fire-retardants
business in 2025 but higher plant nutrition segment volumes and
operating margins. Moody's previous estimates assumed more
favorable 2023-2024 winter conditions and material EBITDA
contribution from fire retardant products. As a result of these
changes, Moody's now estimate that Compass' FY2024 EBITDA, as
adjusted by Moody's, will decline to about $160 million from $200
million in FY2023 and that leverage will increase to low-mid 6x
from 5.4x currently as of December 31, 2023. Assuming average
2024-2025 winter conditions, Moody's expect FY2025 EBITDA to grow
to $180-190 million and leverage to improve to low 5x, which is
still elevated but more commensurate with the rating. Moody's
expect the company to be materially free cash flow negative in
FY2024 but generate positive FCF in FY2025 that will be applied
towards gross debt reduction.
The stable outlook reflects Moody's expectations that Compass will
demonstrate the earnings growth and generate positive free cash
flow in FY2025, that leverage, as adjusted by Moody's, will return
to low 5x or better in the next 12-18 months and that its credit
metrics will improve to levels more commensurate with a B1 rating.
The stable outlook also assumes that the company will maintain its
adequate liquidity position and does not pursue any material
debt-funded acquisition or growth projects that could lead to an
increase in leverage.
Compass has adequate liquidity (SGL-3) supported by $38 million of
cash on hand, as of December 31, 2023, and $208 million available
(net of letters of credit) under its new $375 million revolving
credit facility (RCF). Moody's expect the company to rely heavily
on the RCF and its $100 million AR securitization facility for
seasonal working capital swings, liquidity needs and growth
projects. In light of the exceptionally mild winter and to gain
greater financial flexibility, in March 2024, Compass amended its
credit agreement to obtain financial covenant relief that increased
the maximum permitted total net leverage ratio for the fiscal
quarter ending March 31, 2024 from 4.75x to 6x, to 6.5x for the
following three quarters before stepping down to 5.75x for the
fiscal quarter ending March 31, 2025, to 5.5x for the following two
fiscal quarters, to 5.25x for the fiscal quarter ending December
31, 2025, and to 4.75x thereafter. The amendment also permitted a
reduction in the minimum required interest coverage ratio for the
second, third and fourth calendar quarters of 2024 from 2.25x to 2x
among other changes. Moody's expect the company to remain in
compliance with its amended financial covenants.
The $500 million senior unsecured notes due 2027 are rated B2, one
notch below the B1 CFR, reflecting their subordinated ranking in
the capital structure that includes first-lien senior secured
credit facilities in the form of $375 million revolver and $200
million term loan (both unrated). The senior secured facilities are
secured and guaranteed by all material US subsidiaries, 65% of the
stock of certain foreign subsidiaries and by the Goderich mine in
Canada. The revolver includes a $40 million sub-limit for Canadian
borrowings and a $10 million sub-limit for UK borrowings guaranteed
by the Canadian and UK subsidiaries, respectively. The credit
agreement provides that the revolver and the term loan, unless
extended, will mature on the earlier of May 5, 2028 and date that
is 91 days prior to the stated maturity date of the senior
unsecured notes, unless the notes are paid, refinanced in full or
extended their maturity date 91 days after May 5, 2028.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would consider upgrading the ratings if the company reduces
its gross debt such that Moody's-adjusted leverage were expected to
sustain below 4x during mild winters, generates positive free cash
flow on a sustained basis and lowers its dependence on the de-icing
salt business to generate the majority of its revenues.
Moody's would likely consider a downgrade of the ratings if the
company's free cash flow were expected to remain negative, adjusted
leverage were expected to remain above 6x on a sustained basis or
if there is a substantial deterioration in liquidity.
Headquartered in Overland Park, Kansas, Compass Minerals
International, Inc (Compass) is a leading North American producer
of salt used for highway de-icing, agriculture applications, water
conditioning, and other consumer and industrial uses as well as
magnesium chloride used for de-icing and road stabilization. The
company is also a significant specialty fertilizer manufacturer,
including SOP (sulfate of potash) in the US and Canada. For the
last twelve months ended December 31, 2023, Compass generated net
sales (gross revenues less shipping and handling) of about $860
million.
The principal methodology used in these ratings was Chemicals
published in October 2023.
CORPORATION SERVICE: Fitch Affirms BB LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Corporation Service Company (CSC) and WMB Holdings, Inc.
at 'BB'. The Rating Outlook is Stable. Fitch has also affirmed
CSC's senior secured term loan B at 'BBB-'/'RR1'.
CSC's ratings reflect the company's high percentage of recurring
revenue, strong U.S. presence, high profitability, and solid FCF
dynamics. The ratings also consider EBITDA leverage continuing to
trend toward 4.0x-4.5x, and the company's relatively smaller scale
compared to business services firms rated in the same category or
higher.
KEY RATING DRIVERS
Strong Market Presence: Fitch believes CSC has meaningful market
presence in areas where it competes for corporate business
services. It is a market leader in North America and has a strong
market position in EMEA and APAC. Its corporate customer base
includes 90% of the Fortune 500. Its tax software is used by more
than 50% of the Fortune 500. It is the largest manager of internet
domains for corporate clients. It has substantial presence among
law firms and financial market participants.
Solid Profitability: CSC executed well over the past decade and
consistently operated with relatively high EBITDA margins that
Fitch calculates in the mid-30% range (40% on net revenue). Fitch
views its consistent profitability historically as a function of
the niche nature of its services combined with strong market
presence, particularly in certain areas including registered agent
and uniform commercial code (UCCs) services. CSC is a market leader
in digital brand services and corporate tax software used by U.S.
corporations, which also supports profitability.
High Mix of Recurring Revenues: Fitch views CSC's high proportion
of recurring revenue as a positive rating factor. The company has a
percentage of revenue generated from annual and multi-year
contracts, and the niche nature of the services it provides
combined with its strong market position has led to high retention
historically. More than 70% of CSC's revenue is recurring.
Consistent FCF Generation: CSC benefits from a fairly stable and
predictable business that generated meaningful FCF historically,
even post dividends. These dividends have typically been in the
range of 40% to 50% of CFO, and which Fitch expects to remain
company policy going forward, as shareholders are taxed
individually due to the company's S Corp status. Combining the
dividend with the higher interest payments (due to increased debt
and higher interest rates) will lead to an FCF margin below 10%
compared with a low-teens percentage historically.
High Leverage Trending down: Revenue growth and debt repayment
amortization suggest leverage could trend lower with Fitch
expecting leverage to reach 4.7x in 2024 and 4.3x in 2025. This
compares with current leverage of 5.0x which is manageable at the
rating category given the stable nature of CSC's business and solid
profitability, but is high for the 'BB' rating. The company has a
history of voluntary debt paydown after M&A transactions, and
leverage had typically been below 3x. Continued debt repayment
could lead to significant financial strengthening over the next
three years.
Acquisition Integration: Fitch believes the acquisition of
Intertrust N.V. completed at the end of 2022 strengthened CSC's
business profile. However, there are acquisition-related
integration and execution challenges in the near term. The company
continues to combine its technology systems and streamline
processes.
Importantly, it is completing a remediation process, which had been
requested to Intertrust by regulators in various jurisdictions, to
bring incomplete customer files to compliance. EBITDA margins were
pressured in 2023 due to higher employee-related costs partly due
to remediation efforts. Despite this reduction, figures presented
by management signaled revenue grew 4% in constant currency, while
EBITDA grew modestly in 2023.
DERIVATION SUMMARY
CSC has a strong U.S. market presence in certain of its key product
offerings, particularly corporate registered agent and UCC
search/filing services as well as corporate tax software solutions.
The Intertrust acquisition expanded the company's presence in EMEA
and APAC. Fitch reviews the issuer versus other business service
companies and considers a range of qualitative and financial
factors in deriving the rating. Relative to Fitch-rated industry
peers, CSC is well positioned in terms of its market presence,
diversity of offerings, and stability of its business. However,
higher leverage versus certain business services peers weighs
against the rating in the near term.
CSC has a reasonably high mix of recurring revenue but does not
benefit from long-term contracts unlike certain other business
services providers. With EBITDA in the $650 million range, the
company has much lower scale than certain Fitch-rated business
services peers including S&P Global Inc. (A-/Stable), Moody's
Corporation (BBB+/Stable) and Verisk Analytics, Inc. (BBB+/Stable).
Its scale is closer to FactSet' Research Systems Inc.'s
(BBB+/Stable), but FactSet has much higher EBITDA and cash flow
profitability and much lower leverage.
Fitch believes CSC has less of a competitive moat than other
Fitch-rated business services firms. Despite these differences,
CSC's profitability and solid percentage of recurring revenue
positions the issuer strongly for its rating and potentially at a
higher rating over time should leverage converge to historical
levels.
KEY ASSUMPTIONS
- Revenue grows low to mid-single digits;
- EBITDA margins remain relatively stable in 2024 and 2025 and
expand modestly in years after;
- FCF in the $150 million to $200 million range;
- Capital allocation priorities include modest dividend growth and
debt reduction.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- EBITDA leverage sustained below 4.0x;
- Greater than expected debt reduction;
- Fitch-defined EBITDA approaching $750 million or higher while
sustaining EBITDA margins.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Leverage is sustained above 4.5x;
- Margin degradation, prolonged debt reduction plans and/or cash
flow challenges;
- (CFO - capex) to total debt sustained below 5%;
- Shift to a more aggressive financial policy including
debt-financed M&A and/or greater shareholder capital returns.
LIQUIDITY AND DEBT STRUCTURE
Liquidity: CSC has a reasonable amount of liquidity, supported by:
(i) $193 million of cash on its balance sheet at YE 2023 pro forma
with $90 million of debt repayments occurred in January 2024, (ii)
$249 million available under a revolving credit facility, and (iii)
positive FCF generation, which Fitch expects will be in the $150
million to $200 million range. FCF is supported by the company's
highly recurring revenue base, limited capital intensity, and low
working capital needs. Available liquidity compares with yearly
amortizations of $115 million per year over the next three years.
Debt Profile: The company has a fairly simple capital structure,
including a $250 million senior secured revolver that matures in
2027 and $3 billion in senior secured term loans, pro forma for $90
million of debt repayments occurred in January 2024. The company
funded the January payment with $90 million it had raised through
an accounts receivable securitization facility in December 2023.
Fitch treats the facility as debt for ratio calculations. EBITDA
leverage was roughly 5x at YE 2023.
ISSUER PROFILE
CSC provides various business services solutions for areas
including: business formation (legal & administration services),
digital brand management (largest corporate domain registrar
globally), corporate taxes (tax software provider for companies)
and capital markets administration.
ESG CONSIDERATIONS
WMB Holdings, Inc. has an ESG Relevance Score of '4' for Governance
Structure due to its private, concentrated ownership, which has a
negative impact on the credit profile, and is relevant to the
rating[s] in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Corporation Service
Company LT IDR BB Affirmed BB
senior secured LT BBB- Affirmed RR1 BBB-
WMB Holdings, Inc. LT IDR BB Affirmed BB
CUETO CONSULTING: Unsecureds to Split $15K over 5 Years
-------------------------------------------------------
Cueto Consulting & Construction, LLC, filed with the U.S.
Bankruptcy Court for the Northern District of Texas a Plan of
Reorganization dated April 15, 2024.
The Debtor is a small construction business that faced certain
challenges with respect to collecting certain account receivables,
including a contract claim relative certain services provided in
connection with a project located on Fort Hood, Texas.
This posed a material and significant hardship which the debtor
could not overcome without the filing of the subject bankruptcy
case.
The Plan provides for a distribution to Creditors in accordance
with the terms of the Plan from the Debtor over the course of 5
years from the Debtor's continued business operations.
Class 3 consists of Non-priority unsecured Claims. Class 3 shall be
deemed to include those Creditor(s) holding an alleged Secured
Claim against Debtor, for which: (y) no collateral exists to secure
the alleged Secured Claim; and/or (z) liens, security interests, or
other encumbrances that are senior in priority to the alleged
Secured Claim exceed the fair market value of the collateral
securing such alleged Secured Claims as of the Petition Date.
Each holder of an Allowed Unsecured Claim in Class 3 shall be paid
by Reorganized Debtor from an unsecured creditor pool, which pool
shall be funded at the rate of $250 per month. Payments from the
unsecured creditor pool shall be paid quarterly, for a period not
to exceed 5 years (20 quarterly payments) and the first quarterly
payment will be due on the 20th day of the first full calendar
month following the last day of the first quarter. The Debtor
estimates the aggregate of all Allowed Class 3 Claims is
approximately $3,500,000 based upon Debtor's review of the Court's
claim register, Debtor's bankruptcy schedules, and anticipated
Claim objections.
The Plan provides for a $15,000 dividend to all unsecured creditors
over a period of 5 years. Debtor contends the Plan provides for a
greater dividend to all creditors than would a liquidation of
assets under chapter 7.
Class 4 consists of the holders of Allowed Interests in the Debtor.
The holder of an Allowed Class 4 Interest shall retain their
interests in the Reorganized Debtor.
From and after the Effective Date, in accordance with the terms of
this Plan and the Confirmation Order, the Reorganized Debtor shall
perform all obligations under all executory contracts and unexpired
leases assumed in accordance with Article 6 of this Plan.
A full-text copy of the Plan of Reorganization dated April 15, 2024
is available at https://urlcurt.com/u?l=3nOuHs from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DeMarco Mitchell, PLLC
1255 W. 15th Street, 805
Plano, TX 75075
Telephone: (972) 578-1400
Facsimile: (972) 346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
About Cueto Consulting & Construction
Cueto Consulting & Construction, LLC is a small construction
business in Fort Worth, TX.
The Debtor filed its voluntary petition for Chapter 11 protection
(Bankr. N.D. Tex. Case No. 23-43707) on December 4, 2023, listing
$100,000 to $500,000 in assets and $1 million to $10 million in
liabilities. Andrew Cueto, president, signed the petition.
Judge Edward L. Morris oversees the case.
DeMarco Mitchell, PLLC serves as the Debtor's counsel.
DAIRY FARMERS: Moody's Affirms 'Ba1' Preferred Stock Rating
-----------------------------------------------------------
Moody's Ratings affirmed all ratings for Dairy Farmers of America,
Inc. ("DFA"), consisting of the Baa2 senior unsecured notes rating,
Ba1 preferred stock rating, and Prime-2 commercial paper rating,
and changed the company's rating outlook to positive from stable.
The change in outlook to positive reflects DFA's sustained
improvement in operating performance since it acquired the assets
of Dean Foods Company ("Dean Foods") in 2020 for $433 million, the
operating benefits from the company's investments including
acquisitions to increase efficiency and earnings diversity, debt
repayment, and the continued health of the cooperative system. As
part of the transaction, DFA acquired 43 of Dean Foods' facilities
and an associated direct store delivery system. Over the past four
years, DFA has successfully integrated these assets by reducing
overhead costs, improving operating efficiencies at the acquired
facilities, and negotiating with the unions of the Dean Foods
employees regarding collective bargaining agreements and health and
wellness plans. In addition to realizing synergies from the Dean
Foods acquisition, DFA has also been able to improve operating
performance for its other businesses by optimizing its logistics
network, reinvesting in facilities to improve operating efficiency,
capitalizing on acquisitions such as the 2018 purchase of
Stremicks' Heritage Foods to broaden aseptic and non-dairy
processing capacity and diversify the earnings base, reducing
employee turnover, and divesting non-core assets. As a result, DFA
has been able to continuously grow its EBITDA over the past few
years despite facing numerous headwinds such as labor shortages,
and inflationary increases in freight and input costs. DFA's
Moody's adjusted debt to EBITDA has declined from 2.6x at the end
of fiscal 2021 to 2.0x as of fiscal 2023. Moody's expects DFA's
EBITDA to continue to grow at a rate of approximately 2-3% per year
in fiscal 2024 and fiscal 2025, driven by continued improvements in
logistics and operating performance at its manufacturing
facilities. Based on Moody's assumption of relatively flat debt
levels in the next 12 to 18 months, DFA's leverage is likely to
remain around 2x, which could position the company for an upgrade.
In addition to the EBITDA growth and lower Moody's adjusted
leverage, the positive outlook also reflects Moody's expectation
that DFA will maintain its conservative financial policy and that
operating cash flow will remain healthy in the next 12 to 18
months.
The rating affirmation nevertheless reflects some event risk and
potential for earnings volatility given the focus on products
derived from commodity milk. Declining milk prices could negatively
impact earnings on certain of DFA's operations if the company does
not manage costs effectively. Although DFA has experienced EBITDA
growth during the recent milk cycle, a lot of this growth is
attributable to the synergies realized from the Dean Foods
acquisition. DFA is dependent on a steady supply of milk from dairy
cattle, which could be negative affected from a broader outbreak of
avian influenza among herds or diversion of heifers to support beef
production given declining beef herds. Profitability of member
dairy farms is also being hurt by lower milk prices and elevated
feed costs, and this could create pressure to increase
distributions to farmers if such conditions do not moderate. There
is some acquisition event risk as the company continues to pursue
investments to increase capacity, improve efficiency and diversify
the business.
RATINGS RATIONALE
Dairy Farmers of America, Inc's Baa2 senior unsecured rating is
supported by its position as the largest farmer-owned dairy
marketing cooperative in the US with good reinvestment in
facilities that underpins significant scale as the largest
processor and distributor of milk in the United States. DFA and its
member-farmers benefit from the cooperative's significant network
of owned and affiliated processors and food & beverage
manufacturers that provide stable outlets for members' milk. DFA's
cooperative structure provides important financial flexibility
that, in a stress scenario and on an infrequent basis, would allow
the cooperative to quickly improve cash flow through reductions in
milk payments to member farmers. Acquisitions and organic
investments support the earnings base and improved diversity with
capabilities in milk processing and marketing, a variety of
dairy-based consumer products, and non-dairy processing
capabilities that provide an ability to serve consumers that prefer
non-dairy products. The volume of dairy milk consumed is generally
growing despite steady declines in fluid milk consumption because
other products such as cheese and nonfat dry milk are expanding.
Notwithstanding these strengths, the company must maintain a
relatively conservative financial profile in order to successfully
manage the earnings volatility that is inherent in its value-added
and affiliate businesses due to fluctuations in milk input costs
and product demand. DFA's credit profile also is constrained by the
underlying low-margin and commodity nature of the core fluid milk
business. The long-term decline in fluid milk consumption and
headwind from some consumers shifting to non-dairy products creates
the need to invest to keep up with changes in consumer preferences.
This includes periodic acquisitions that can increase debt and
leverage. The company has a good track record of reinvestment,
which along with distributions to member farmers in the cooperative
structure limits free cash flow.
Moody's expects that DFA's revenue will decline by 1% in 2024 and
then grow by 1% in 2025. This reflects continued stable demand for
milk incorporating both the increase in valued-added products such
as cheese and offset by some softness in fluid milk consumption.
Moody's expects DFA's credit metrics to continue to remain strong,
with debt-to-EBITDA around 2.0x and retained cash flow to net debt
in a range of 40% to 45% in fiscal 2024 and fiscal 2025. Moody's
also expects the company to maintain good liquidity with a $1.075
billion undrawn revolver that supports the commercial paper program
and the ability to addressing upcoming maturities if the company
does not otherwise refinance.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if DFA sustains stable operating
performance, sustains good reinvestment in processing capacity and
capabilities, limits the level of leveraging acquisitions, sustains
debt to EBITDA below 2.5x, and sustains retained cash flow to net
debt above 25%. The company would also need to maintain good
liquidity.
Ratings could be downgraded if DFA experiences material
deterioration in its value-added business, there is a shift in
industry fundamental that weakens DFA's core business model, debt
to EBITDA is sustained above 3.5x, or retained cash flow to net
debt falls below 20%. A deterioriation in cooperative membership or
weakness in member farmer profitability that raises pressure on the
cooperative to financially support farmers could also lead to a
downgrade.
Dairy Farmers of America, Inc., headquartered in Kansas City,
Kansas, is the leading US national milk marketing cooperative. DFA
is owned by and serves over 10,800 dairy farmer members
representing around 5,800 dairy farms in 48 states. DFA reported
revenue of approximately $21.7 billion for the twelve months ended
December 31, 2023. The cooperative markets about 28% of the total
milk volume in the United States.
The principal methodology used in these ratings was Protein and
Agriculture published in November 2021.
DARJEN INC: Wins Cash Collateral Access on Final Basis
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized Darjen, Inc. to use cash
collateral on a final basis in accordance with the budget.
Clover Advantage Group and Titan Asset Purchasing hold security
interests in all of the Debtor's assets.
The estimated value of the cash collateral at the time of the
filing of the case was approximately $42,000.
As adequate protection, the Lenders are granted a replacement lien
pursuant to 11 U.S.C. Section 361(2) on and in all property of the
Debtor acquired or generated after the Petition Date, but solely to
the same extent and priority, and of the same kind and nature, as
the property of the Debtor securing the prepetition obligations to
Clover Advantage Group and Titan Asset Purchasing under the
Pre-Petition Loan Documents.
In the event that diminution occurs in the value of cash collateral
from and after the Petition Date as a result of the Debtor's use
thereof in an amount in excess of the value of the Replacement
Liens granted, Clover Advantage Group and Titan Asset Purchasing
will be granted an administrative claim under 11 U.S.C. Section
507(b), with priority over all other administrative expense claims.
The Lender's super-priority administrative expense claim will not
attach to or be paid from the proceeds of the Avoidance Actions.
The Replacement Liens granted will be valid and perfected without
the need for the execution or filing of any further documents or
instruments.
A copy of the court's order is available at
https://urlcurt.com/u?l=XUUhE5 from PacerMonitor.com.
About Darjen, Inc.
Darjen, Inc. owns and operates a compound pharmacy. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. W.D. S.D. Fla. Case No. 23-17470-MAM) on September 18,
2023. In the petition signed by Michelle Notartomaso, president,
the Debtor disclosed up $50,000 in assets and up to $1 million in
liabilities.
Judge Mindy A. Mora oversees the case.
Brian K. McMahon, Esq., at Brian K. McMahon, PA, represents the
Debtor as legal counsel.
DAVID ALONSO MD: Lisa Holder Named Subchapter V Trustee
-------------------------------------------------------
The U.S. Trustee for Region 17 appointed Lisa Holder, Esq., a
practicing attorney in Bakersfield, Calif., as Subchapter V trustee
for David Alonso, Md Inc.
Ms. Holder will be paid an hourly fee of $300 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Holder declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Lisa Holder, Esq.
3710 Earnhardt Drive
Bakersfield, CA 93306
Phone: (661) 205-2385
Email: lholder@lnhpc.com
About David Alonso, Md
David Alonso, Md Inc. d/b/a North State Primary Care d/b/a Magnolia
Comprehensive Internal Medicine is a medical services provider
offering general well checks, consultations, and thorough
evaluations.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Calif. Case No. 24-21517) on April 12,
2024, with $2,512,423 in assets and $4,311,212 in liabilities. Dr.
David Alonso, president, signed the petition.
Judge Christopher M. Klein presides over the case.
Gabriel E. Liberman, Esq. at the Law Offices of Gabriel Liberman,
APC.
DERMTECH INC: To Implement Restructuring, Explore Other Options
---------------------------------------------------------------
DermTech, Inc. announced that the special committee of its board of
directors engaged TD Cowen to conduct a process exploring strategic
alternatives to maximize stockholder value. Potential strategic
alternatives that may be explored or evaluated include an
acquisition, merger, reverse merger, business combination, sale of
assets, licensing or other transaction involving the Company.
There can be no assurance, however, that the strategic review
process will result in any such transaction or, if a transaction is
undertaken, that such transaction would close in a timely manner or
at all. DermTech does not intend to comment on this strategic
review process and will make further announcements in accordance
with its ongoing disclosure obligations and pursuant to applicable
laws and regulations. The Company will not be hosting a
first-quarter 2024 earnings conference call as a result of the
announcement.
The Company is also implementing a restructuring plan to
significantly reduce expenses associated with its current
operations to preserve cash. These restructuring actions will
result in a workforce reduction of approximately 100 employees, or
approximately 56% of DermTech's workforce. The Company anticipates
incurring a one-time restructuring charge of approximately $1.6
million in the second quarter of 2024 in connection with these
restructuring actions.
Currently, the Company intends to continue laboratory operations
during the strategic review and believes it has sufficient capacity
to process orders for the DermTech Melanoma Test (DMT).
About DermTech, Inc.
San Diego, Calif.-based DermTech, Inc. is a molecular diagnostic
company developing and marketing novel non-invasive genomics tests
to aid in the diagnosis and management of melanoma.
San Diego, CA-based KPMG LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated February
29, 2024, citing that the Company has suffered recurring losses
from operations and has an accumulated deficit that raise
substantial doubt about its ability to continue as a going concern.
DIRIGO GLOBAL: Case Summary & 11 Unsecured Creditors
----------------------------------------------------
Debtor: Dirigo Global Holdings, LLC
45 Church Street
Gardiner, ME 04345
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
District of Maine
Case No.: 24-10084
Debtor's Counsel: George J. Marcus, Esq.
MARCUS CLEGG
16 Middle Street Unit 501A
Portland, ME 04101
Tel: (207) 828-8000
E-mail: bankruptyc@marcusclegg.com
Total Assets as of April 30, 2024: $1,791,522
Total Liabilities as of April 30, 2024: $2,394,317
The petition was signed by Kevin Mattson as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/WQ6C7MA/Dirigo_Global_Holdings_LLC__mebke-24-10084__0001.0.pdf?mcid=tGE4TAMA
EMCORE CORP: Back in Compliance With Nasdaq Bid Price Requirement
-----------------------------------------------------------------
EMCORE Corporation reported in a Form 8-K filed with the Securities
and Exchange Commission that on April 19, 12024, it received
written notice from The Nasdaq Stock Market LLC informing the
Company that it has regained compliance with Nasdaq Listing Rule
5450(a)(1), which requires that companies listed on the Nasdaq
Global Select Market maintain a minimum bid price of $1.00 per
share.
Nasdaq notified the Company in the Compliance Notice that, from
April 2, 2024 to April 18, 2024, the closing bid price of the
Company's common stock had been $1.00 per share or greater and,
accordingly, the Company had regained compliance with Nasdaq
Listing Rule 5450(a)(1) and that the matter was now closed.
About Emcore
EMCORE Corporation -- https://www.emcore.com -- is a provider of
sensors and navigation systems for the aerospace and defense
market. Over the last five years, the Company has expanded its
scale and portfolio of inertial sensor products through the
acquisitions of Systron Donner Inertial, Inc. ("SDI") in June 2019,
the Space and Navigation business of L3Harris Technologies, Inc.
("S&N") in April 2022, and the FOG and Inertial Navigation Systems
business of KVH Industries, Inc. in August 2022. The Company's
multi-year transition from a broadband company to an inertial
navigation company has now been completed following the sale of its
cable TV, wireless, sensing and defense optoelectronics business
lines and the shutdown of its chips business line and indium
phosphide wafer fabrication operations.
Irvine, California-based KPMG LLP, the Company's auditor since
2010, issued a "going concern" qualification in its report dated
Dec. 27, 2023, citing that the Company has suffered recurring
losses from operations that raise substantial doubt about its
ability to continue as a going concern.
"We have recently experienced losses from our operations and used a
significant amount of cash, amounting to a net loss of $5.7 million
and net cash outflows from operations of $1.8 million for the three
months ended December 31, 2023, and we expect to continue to incur
losses and use cash in our operations in the near term. As a result
of our recent cash outflows, we have taken actions to manage our
liquidity and plan to continue to do so. As of December 31, 2023,
our cash and cash equivalents totaled $21.2 million, including
restricted cash of $0.5 million and we had $7.2 million available
under our Credit Agreement. We are evaluating the sufficiency of
our existing balances of cash and cash equivalents, cash flows from
operations, and amounts expected to be available under our Credit
Agreement, together with additional actions we could take including
further expense reductions and/or potentially raising capital
through additional debt or equity issuances, or from the potential
monetization of certain assets. However, we may not be successful
in executing on our plans to manage our liquidity, including
recognizing the expected benefits from our previously announced
restructuring program, or raising additional funds if we elect to
do so, and as a result substantial doubt about our ability to
continue as a going concern exists," the Company said in its
Quarterly Report for the period ended Dec. 31, 2023.
EMRLD BORROWER: S&P Affirms 'BB-' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings affirmed its ratings on EMRLD Borrower L.P.
(doing business as [d/b/a] Copeland), including its 'BB-' issuer
credit rating on the company and its 'BB-' issue-level ratings on
its debt.
S&P said, "Our stable rating outlook on Copeland reflects our
forecast that, despite relatively muted organic revenue trends and
margin pressure from costs related to stand-alone and separation
initiatives in 2024, synergy opportunities and the roll off of
separation-related costs will drive margin expansion and
deleveraging in the next year or two. In addition, we expect FOCF
generation will remain solid and supportive of the company's
liquidity position."
S&P expects muted organic revenue in fiscal 2024.
S&P said, "Our forecast for relatively flat revenue in 2024 follows
Copeland's first quarter (ended Dec. 31, 2023) revenue decline of
4.3%, and incorporates our assumption for revenue to remain down on
a year-over-year basis through the second quarter, before
recovering modestly in the second half of the year. Volume softness
in residential markets has been the key driver of Copeland's
revenue declines, largely due to destocking as distributors manage
elevated levels of channel inventory, which was built up in 2022
and early 2023 to counter supply chain difficulties and extended
product lead times. In addition, regulatory uncertainty in Europe
has exacerbated destocking headwinds, as we believe this has caused
consumers to delay or defer purchasing decisions. While destocking
headwinds have persisted longer than we initially expected,
commentary from Copeland and the large North American heating,
ventilation, and air conditioning [HVAC] original equipment
manufacturers [OEMs] leads us to believe that destocking will
largely be completed by the end of the first half of 2024. As a
result, we believe revenue growth will inflect positive in the
second half of the year, driven by continued low-single-digit
pricing growth, easier year-over-year comparisons, and continued
strength in commercial HVAC markets and aftermarket revenue.
"We forecast Copeland's S&P Global Ratings-adjusted EBITDA margin
will begin expanding in 2025.
"We see 2024 (and, to an extent, 2025) as a transition year for
Copeland as it works through separation and stand-alone costs
related to its 2023 leveraged buyout. Given we do not add these
costs back to our measure of S&P Global Ratings-adjusted EBITDA, we
believe higher expenses in 2024 will limit the company's ability to
expand its S&P Global Ratings-adjusted EBITDA margin. In addition,
while we forecast lower separation and stand-alone costs in 2025,
we forecast this will be partially offset by higher restructuring
costs as the company works through global cost optimization
opportunities. Specifically, we forecast S&P Global
Ratings-adjusted EBITDA margin of about 22% in 2024 and then
expanding to about 23% in 2025 as separation costs roll off and the
company begins to realize synergies related to its initiatives in
areas like pricing, procurement, and cost optimization. We
currently forecast 2026 S&P Global Ratings-adjusted EBITDA margins
of about 25%, as the restructuring costs related to cost
optimization initiatives decline substantially.
"While we expect S&P Global Ratings-adjusted debt leverage to
remain elevated through 2024, we forecast free operating cash flow
(FOCF) will remain solid.
"We forecast Copeland's S&P Global Ratings-adjusted debt leverage
to be about 7x in 2024, which includes as debt the company's $2.25
billion PIK-only seller's note issued to Emerson Electric Co. We
forecast the company will begin its deleveraging trajectory in
2025, with S&P Global Ratings-adjusted leverage in the mid-6x area,
as separation costs begin to roll off and synergies are realized.
In addition, despite cash separation costs and elevated capital
expenditures (capex) as Copeland invests in footprint and capacity
projects, we forecast reported FOCF to remain good, above $300
million in 2024, increasing to about $500 million in 2025. We note
that 2024 discretionary cash flow will be somewhat reduced by our
expectation of quarterly partner distributions for tax purposes (we
model a $150 million of distributions in 2024) and a roughly $40
million one-time payment of China-based cash to Emerson (as per the
terms of the 2023 transaction agreement). While we do not
incorporate acquisition spending in our forecast, we believe
internally generated cash flow will be sufficient to fund bolt-on
acquisitions over time.
"Our stable outlook on Copeland reflects our forecast that, despite
relatively muted organic revenue trends and margin pressure from
costs related to stand-alone and separation initiatives in 2024,
synergy opportunities and the roll off of separation-related costs
will drive margin expansion and deleveraging in the next year or
two. In addition, we expect FOCF generation will remain solid and
supportive of the company's liquidity position.
"We could lower our rating on Copeland if we expect its S&P Global
Ratings'-adjusted debt to EBITDA will remain above 7x on a
sustained basis. In addition, we could consider lower ratings if
FOCF to debt remains below 5% on a sustained basis. These scenarios
could occur if end-market demand declines or if the company
encounters cost overruns related to stand-alone or restructuring
costs, which would affect S&P Global Ratings-adjusted EBITDA
margins."
An upgrade is unlikely over the next 12-24 months considering
Copeland's high debt load and ownership structure. Nevertheless,
S&P could consider higher ratings if:
-- S&P expects its S&P Global Ratings-adjusted debt to EBITDA to
decline below 5x and remain at that level;
-- S&P Global Ratings-adjusted FOCF to debt increases to the
high-single-digit percent area, and we expect it to remain at this
level; and
-- Management commits to a financial policy that is commensurate
with this level of leverage, including potential future
acquisitions and shareholder rewards.
ENCINO ACQUISITION: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Encino Acquisition Partners Holdings,
LLC's and Encino Acquisition Partners, LLC's (together, Encino)
Long-Term Issuer Default Ratings (IDRs) at 'B'. Fitch has assigned
a 'B'/'RR4' rating to Encino Acquisition Partners Holdings, LLC's
proposed $500 million new senior unsecured 2031 notes, in line with
Encino's existing senior unsecured debt ratings. This new issuance
will be used to reduce current drawings under the revolver
facility. Fitch has also affirmed the existing senior unsecured
2028 notes at 'B'/'RR4'. The Rating Outlook is Stable.
Encino Acquisition Partners Holdings, LLC's IDR reflects the
company's sizable Utica Basin position; competitive unit economics;
ability to effectively transport gas out of the basin to advantaged
price points; long-dated debt maturity, with leverage expected to
remain below 2.0x over Fitch's forecast; adequate liquidity; and
strong hedge profile.
These considerations are offset by the company's current inability
to generate material positive FCF and relatively high firm
transportation costs.
KEY RATING DRIVERS
Nearing FCF Neutrality: Encino has reported negative FCF since
2018, which Fitch expects to continue in 2024 given their planned
drilling program. Encino will add a fourth drilling rig in 2H24 and
continue core acreage acquisition before shifting emphasis to FCF
generation in 2025. Encino is expected to be FCF positive in 2025
and 2026 under Fitch's price deck and production assumptions. In
the near term, Encino will continue to focus on producing oil as
compared to natural gas and natural gas liquids (NGLs) due to the
relatively stronger economic returns. Fitch expects that capex over
the rating cycle will be approximately $1.2 billion in 2024, $930
million in 2025 and $900 million per annum there afterwards and
that any FCF will be applied to debt reduction.
High Firm Transportation Costs: Encino's firm transportation (FT)
costs are among the highest of Fitch's monitored natural gas
producers. Encino inherited these long-dated firm transportation
agreements for natural gas takeaway, which causes significant
exposure at low pricing. However, these high FT contracts provide
Encino with advantaged pricing compared with in-basin sales and
provides that Encino has sufficient takeaway capacity at current
volumes. In addition, management is attempting to mitigate these
higher costs through higher liquids production.
Midcycle Leverage Below 2.0x with Improved Liquidity: Fitch views
the $300 million equity investment, and the HY issuance to term out
the revolver borrowings as favorable for the company's liquidity.
The equity investment from the Canada Pension Plan Investment Board
provides support to accelerate Encino's development of the Utica
oil play with increased 2024 capex used to add a fourth drilling
rig in 2H24 and continue core acreage acquisition before shifting
emphasis to FCF generation in 2025.
Fitch's base case forecasts gross EBITDA leverage at 1.7x in 2024,
and remains under this threshold at Fitch's $57/bbl midcycle West
Texas Intermediate (WTI) price assumption. Fitch believes the
high-quality asset profile combined with Encino's hedge position
provides support for FCF generation and gross debt repayment toward
management's long-term leverage target of 1.5x.
Sizable Utica Footprint: Encino holds a large asset base in the
Utica Basin with over 1.1 million net acres. The acreage is spread
across the Utica shale basin, which provides optionality in
drilling plans, allowing Encino to drill dry gas and wet gas wells
depending on economics or pipeline commitments and constraints.
Encino is the second-largest producer of gas in the Ohio Utica
behind Ascent Resources Utica Holdings, LLC (B+/Positive), although
its production is lower than most Fitch-rated natural gas peers.
The company has focused on drilling where the condensate mix is
greater to boost overall realized pricing and has a relatively high
percentage of condensate and NGLs in its production base relative
to peers.
Favorable Hedging Policy: Encino has a two- to three-year rolling
hedging program, ultimately targeting hedging up to 80% of total
production. Fitch estimates Encino has approximately 80% of
expected natural gas production for 2024 hedged at $2.79/thousand
cubic feet (mcf) and approximately 66% of forecast oil hedged at
$68.84/barrel (bbl). The company also has hedges in place on
condensate, ethane, propane and butane. Fitch views the current
plan of hedging favorably, as it reduces cash flow volatility and
locks in returns for the company.
DERIVATION SUMMARY
Encino's rating reflects the company's size, relatively low
leverage and favorable netbacks. Encino is smaller than other
gas-oriented peers at approximately 1,136 million cubic feet
equivalent per day (mmcfed) produced in 2023, which is lower than
the largest Utica Basin producer, Ascent Resources (B+/Positive) at
2,135mmcfed. Encino is slightly below Comstock Resources Inc.
(B+/Negative) at 1,438mmcfed.
Encino has strong netbacks, given that 38% of its production are
liquids, which is materially higher than other predominantly
natural gas producers. Although production expenses are relatively
higher than its peer group, this is offset by a much higher
realized unhedged commodity price. Encino had a Fitch-calculated
unhedged netback of $2.0 per thousand cubic feet equivalent per day
(mcfed) compared with Ascent ($1.0/mcfed) and Comstock
($1.3/mcfed).
Encino's EBITDA leverage was 1.9x as of Dec. 31, 2023, and it is
expected to remain under 2.0x levered throughout the forecast. This
is within range of other issuers rated 'B', although Fitch expects
the group to improve in the near term.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include
- Henry Hub natural gas price of $2.50/mcf in 2024, $3/mcf in 2025
and 2026 and $2.75/mcf thereafter;
- West Texas Intermediate oil prices of $75/bbl in 2024, $65/bbl in
2025, $60/bbl in 2026 and $60/bbl in 2027 and $57/bbl thereafter;
- A slight decline in 2024 production with high-to-mid single digit
production growth in 2025 and 2026 due to a higher focus on oil and
liquids mix, followed by low single digit growth thereafter;
- Capex of approximately $1.18 billion in 2024, declining to $900
million in the outer years of the forecast;
- Any FCF proceeds are applied to debt reduction;
- No acquisition, divestitures or distributions after the $115
million acquisition that closed in 1Q24.
RECOVERY ANALYSIS
Key Recovery Rating Assumptions
The recovery analysis assumes that Encino Acquisition Partners
Holdings, LLC would be reorganized as a going-concern in bankruptcy
rather than liquidated.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
Encino's GC EBITDA assumption reflects Fitch's projections under a
stressed case price deck, which assumes Henry Hub natural gas
prices of $2.00 in 2024, and $2.25 thereafter. The GC EBITDA
estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation (EV)
The GC EBITDA assumption of $490 million (increased from $430
million), reflects the decline from current pricing levels to
stressed levels and then a partial recovery coming out of a
troughed pricing environment.
Fitch applied an EV multiple of 3.5x EBITDA to the increased GC
EBITDA to calculate a post-reorganization enterprise value. The
choice of this multiple considered the following factors:
- The historical bankruptcy case study exit multiples for peer
companies ranged from 2.8x-7.0x, with an average of 5.2x and a
median of 5.4x.
- Recent M&A transactions in the Appalachian Basin include: 1)
Southwestern Energy Company (BB+/RWP) acquired Montage Resources
Corporation in August 2020, which implied a 3.4x multiple on LTM
EBITDA; and 2) EQT Corporation (BBB-/Stable) acquired Alta
Resources Development in 3Q21 at a 5.0x multiple (includes
midstream assets).
Encino's valuation reflects the lack of public exploration and
production companies operating in the Utica Basin, which could
limit buyers resulting in a discount to valuations.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors. Fitch considers valuations such as
SEC PV-10 and M&A transactions for each basin, including multiples
for production per flowing barrel, proved reserves valuation, value
per acre and value per drilling location.
Recovery Waterfall
The revolver is assumed to be 80% drawn upon default, with the
expectation that commitments would be reduced during a
redetermination. The revolver is senior to the senior unsecured
notes in the waterfall.
The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' recovery for the first lien
revolver and 'RR4' recovery for the senior unsecured notes ($700
million) and the proposed senior unsecured notes ($500 million).
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Track record of generating material positive FCF;
- Adherence to management's financial policy to reduce debt and
enhance liquidity;
- Maintenance of mid-cycle EBITDA Leverage at or below 2.5x and
ability to maintain adequate higher value liquids inventory.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Inability to generate positive FCF, which results in reduced
liquidity and increased leverage;
- Change in financial policy including reduced commitment to repay
debt and/or a reduction in the hedging program;
- Failure to extend the revolver facility in a timely manner;
- Loss of operational momentum resulting in material production
declines from current levels;
- Mid-cycle EBITDA Leverage above 3.0x.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Encino had cash on hand of $10.4 million as
at Dec. 31, 2023 and $595.9 million of availability under its $1.35
billion reserve-based lending (RBL) facility after $632.9 million
of borrowings and $131.2 million LOC. The revolver matures in
November 2025.
The RBL facility has a borrowing base subject to semiannual
redeterminations. At the most recent redetermination in November
2023, the company's borrowing base was reaffirmed at $1.75 billion,
and the elected amount was reaffirmed at $1.35 billion. The
facility has two financial maintenance covenants: a net leverage
covenant in which the ratio cannot be more than 3.5x and a current
ratio covenant in which the ratio cannot be less than 1.00:1.00.
The company is compliant with both covenants. With these
characteristics and neutral to positive FCF expected over the
forecast, Fitch expects Encino will maintain adequate liquidity
throughout the rating case.
In April 2021, Encino issued $700 million of 8.5% senior unsecured
notes, which matures in May 2028 and the proposed senior unsecured
notes which is expected to mature in 2031. Fitch believes the
company's refinance risk is manageable given the ample maturity
runway to focus on growing FCF and reducing debt to its leverage
target of below 1.5x.
ISSUER PROFILE
Encino Acquisition Partners Holdings, LLC and Encino Acquisition
Partners, LLC is a private equity backed, exploration and
production (E&P) company with over 1.1 million acres in Ohio's
Utica shale play.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Encino Acquisition
Partners Holdings,
LLC LT IDR B Affirmed B
senior unsecured LT B New Rating RR4
senior unsecured LT B Affirmed RR4 B
Encino Acquisition
Partners, LLC LT IDR B Affirmed B
ENCINO ACQUISITION: Moody's Rates New $500MM Unsecured Notes 'B3'
-----------------------------------------------------------------
Moody's Ratings assigned a B3 rating to Encino Acquisition Partners
Holdings, LLC's proposed $500 million of senior unsecured notes due
2031. Concurrently, Moody's affirmed Encino's B2 Corporate Family
Rating, its B3 senior unsecured notes rating, and its B2-PD
Probability of Default Rating. The outlook remains stable.
"Encino will use proceeds from its proposed senior notes offering
to reduce borrowings outstanding under its revolver, improving its
liquidity and lengthening its maturity runway," said Jake Leiby,
Moody's Vice President -Senior Analyst. "Capital spending will
increase significantly in 2024 as the company executes on its
liquids growth strategy and the $300 million follow-on equity
injection from its sponsor will cover a portion of its expected
negative free cash flow generation."
RATINGS RATIONALE
Encino's B2 CFR is supported by its rising exposure to liquids
hydrocarbon production, competitive operating cost structure, and
sizeable acreage position in the Utica Shale. These positive
attributes are tempered by its geographic concentration, firm
transportation (FT) commitments, and still-high exposure to natural
gas. Encino's sizeable acreage position provides a meaningful
runway of drilling targets and a long-lived reserve base. The
company also benefits from an active commodity hedging program,
which reduces cash flow volatility. Encino has successfully
increased its exposure to liquid hydrocarbon production over the
last couple of years, which has benefited its operating margins but
resulted in negative annual free cash flow in each of the last
three years.
The company's capital spending will rise -39% in 2024 to $1.1-1.2
bn, with incremental spending directed towards the addition of a
fourth rig to the capital program in the second half of the year in
order to further accelerate its liquids production growth, acquire
additional acreage and seismic. The company's sponsors have
committed to inject an additional $300 million of equity into the
company in 2024 to fund a portion of the capital budget, however,
Moody's still expects Encino to rely on borrowings under its
revolver to cover some of its capital budget and the -$100 million
of acreage acquisitions completed in the first quarter of 2024.
Moody's expects Encino's free cash flow profile to improve
meaningfully due to a significant decline in acreage acquisition
spending in 2025.
Encino's stable outlook reflects Encino's adequate liquidity and
Moody's expectation for the company's free cash flow generation to
benefit from lower capital spending in 2025.
Moody's expects Encino to maintain adequate liquidity. As of
December 31, 2023, the company had $10 million of cash and $596
million of available borrowing capacity under its reserve-based
revolving credit facility maturing in November 2025. The revolving
credit facility has a $1.75 billion borrowing base and $1.35
billion of elected commitments. Pro forma for the use of the
initial equity injection and new senior notes proceeds to reduce
revolver borrowings, availability stands at around $1.1 billion.
Moody's expects Encino to fund its liquidity needs over the
remainder of the year with incremental revolver borrowings and
proceeds from the second $150 million equity injection. The credit
agreement requires Encino to maintain a current ratio of greater
than 1x and net debt/EBITDAX ratio below 3.5x. Moody's expects
Encino to maintain compliance with its financial covenants into at
least mid-2025.
Encino's proposed $500 million of senior unsecured notes due in
2031 are rated B3, the same as the $700 million senior unsecured
notes due in 2028, and one notch below the B2 CFR, reflecting the
priority ranking and size of the company's $1.35 billion committed
secured revolving credit facility. The notes rating could be
downgraded if the revolver's committed capacity and/or utilization
increase substantially.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Encino's ratings could be upgraded if the company is successful in
its transition towards liquids at competitive returns on investment
and generates free cash flow. Retained cash flow to debt ratio
maintained above 35% and a Leveraged Full Cycle Ratio above 1.5x
would also be needed to support an upgrade.
Encino's ratings could be downgraded if the company's leverage
metrics substantially increase, production declines significantly
or liquidity deteriorates. Retained cash flow to debt ratio below
20% could lead to a downgrade.
Encino is a private independent E&P company with operations in the
Utica Shale in Ohio. Encino is 100% owned by Encino Acquisition
Partners, LLC (EAP), which is owned by Encino Energy, LLC (2%) and
Canada Pension Plan Investment Board (CPPIB, 98%). There are no
debt obligations at EAP.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
ENCINO ACQUISITION: S&P Rates New Senior Unsecured Notes 'B-'
-------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating and '4'
recovery rating (rounded estimate: 40%) to U.S.-based oil and gas
exploration and production company Encino Acquisition Partners
Holdings LLC's (a wholly owned subsidiary of Encino Acquisition
Partners LLC) proposed senior unsecured notes due 2031. S&P also
lowered the rating on the company's existing unsecured notes due
2028 to 'B-' from 'B' and revised the recovery rating on the notes
to '4' from '2'. The '4' recovery rating indicates its expectation
for average (30%-50%; rounded estimate: 40%) recovery in the event
of a payment default. Encino intends to use the proceeds from the
$500 million notes to repay a portion of the outstanding borrowings
under its reserved-based lending (RBL) credit facility ($633
million drawn as of Dec. 31, 2023).
S&P said, "The downgrade reflects a reduction in our valuation of
the company based on lower PV-10 values, which we attribute to
lower pricing differentials, as well as the additional proposed
debt in the capital structure under our recovery assumptions.
"We expect that the company will generate negative free cash flow
in 2024, leading to continued reliance on its credit facility. On
April 22, 2024, the company announced it received an equity
investment commitment of $300 million from the Canada Pension Plan
Investment Board, with the first $150 million funded on April 22,
2024. We anticipate Encino will use these proceeds to repay another
portion of its outstanding RBL facility, which will in turn provide
capacity to fund increased capital expenditure (capex) in 2024.
Encino plans to accelerate oil development activity with the
addition of a fourth rig in the second half of 2024 and to acquire
core acreage in the Utica oil window. We forecast approximately
$1.1 billion-$1.2 billion of capex in 2024 (including potential
acreage acquisitions), up from about $825 million in 2023.
"We expect increased oil production will support free cash flow
generation in 2025. Encino continues to shift its focus to its
Utica oil play and increased liquids production, which we view as
more profitable than natural gas. We anticipate the proportion of
the company's liquids production will increase further to 45%-50%
in 2024 from 38% in 2023, with total daily production slightly down
at 1,050 million cubic feet equivalent per day (mmcfe/d)–1,100
mmcfe/d from 1,136 mmcfe/d in 2023. As a result, we anticipate
Encino will maintain strong credit metrics over the next 12-24
months, with funds from operations to debt to remaining above 45%
and debt to EBITDA to be below 2.0x."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P Global Ratings' simulated default for Encino assumes a
sustained period of low commodity prices, consistent with the
conditions of past defaults in this sector.
-- S&P based its valuation of Encino on a company-provided PV-10
report evaluated on its recovery price deck of $50 per barrel for
West Texas Intermediate crude oil and $2.50/million Btu for Henry
Hub natural gas.
-- S&P assumes the company's $1.35 billion revolving RBL facility
is fully drawn at default.
Simulated default and valuation assumptions
-- Simulated year of default: 2026
-- Jurisdiction (Rank A): The company is headquartered in the U.S.
and has the majority of its revenue/assets located domestically.
-- S&P adjusted its gross enterprise valuation to account for
restructuring administrative costs (estimated at about 5% of the
gross value).
Simplified waterfall
-- Net enterprise value at default (after 5% administrative
costs): $1.82 billion
-- First-lien debt: $1.27 billion
--Recovery expectations: Not applicable
-- Total value available to unsecured claims: $556 million
-- Senior unsecured debt: $1.25 billion
--Recovery expectations: 30%-50% (rounded estimate: 40%)
Note: All debt amounts include six months of prepetition interest.
ENDO INT'L: Asset Acquisition Completed, Exits Chapter 11
---------------------------------------------------------
Endo, Inc., a newly formed entity, on April 23 disclosed that it
has successfully completed the previously announced acquisition of
substantially all of the assets of Endo International plc, as
contemplated under EIP's plan of reorganization. With the Plan's
effectiveness, EIP's operating assets have exited the Chapter 11
financial restructuring process with significantly reduced
outstanding indebtedness and resolution of EIP's pre-bankruptcy
litigation overhang.
Following the closing, Endo is poised for sustained growth and is
strategically positioned to operate with a strong balance sheet, a
broad, diversified portfolio of on-market medicines across its four
segments, a deep pipeline of innovative and differentiated product
candidates, and a highly skilled team.
"We believe Endo is well positioned to create value for our
stakeholders over the long-term as we execute on our strategic
priorities," said Blaise Coleman, Endo, Inc.'s President and Chief
Executive Officer. "In particular, we are focused on growing our
Branded Pharmaceuticals segment, anchored by XIAFLEX(R), reviving
growth in our Sterile Injectables segment through the launch of
differentiated new products, and leveraging our improved balance
sheet to drive new growth investments."
The Endo Board of Directors is comprised of seven members,
including six independent directors. A full listing of Endo's Board
members and their biographical information can be found here.
Endo is currently a privately held company but has begun the
process of listing its equity on a national stock exchange.
Mr. Coleman concluded, "I would like to extend my sincere thanks to
all of our team members. Through their passion, commitment and hard
work, we successfully moved our business forward during the
financial restructuring process while remaining focused on helping
everyone we serve live their best lives."
About Endo, Inc.
Endo is a diversified specialty pharmaceutical company boldly
transforming insights into life-enhancing therapies.
About Endo International PLC
Endo International plc (OTC: ENDPQ) is a generics and branded
pharmaceutical company. It develops, manufactures, and sells
branded and generic products to customers in a wide range of
medical fields, including endocrinology, orthopedics, urology,
oncology, neurology, and other specialty areas. On the Web:
http://www.endo.com/
On Aug. 16, 2022, Endo International and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549).
On May 25, 2023, Operand Pharmaceuticals Holdco II Limited and
Operand Pharmaceuticals Holdco III Limited each filed a voluntary
Chapter 11 petition also in the U.S. Bankruptcy Court for the
Southern District of New York. On May 31, 2023, Operand
Pharmaceuticals II Limited and Operand Pharmaceuticals III Limited
each filed a voluntary Chapter 11 petition also in the Southern
District of New York.
The Company's cases are jointly administered before the Honorable
James L. Garrity, Jr.
Endo initiated the financial restructuring process after reaching
an agreement with a group of its senior debtholders on a
transaction that would substantially reduce outstanding debt,
address remaining opioid and other litigation-related claims, and
best position Endo for the future. This would allow the Company to
advance its ongoing business transformation from a strengthened
financial position to create compelling value for its stakeholders
over the long term.
Endo's India-based entities are not part of the Chapter 11
proceedings. The Company has filed recognition proceedings in
Canada and expects to file similar proceedings in the United
Kingdom and Australia.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom, LLP as
legal counsel; PJT Partners, LP as investment banker; and Alvarez &
Marsal North America, LLC as financial advisor. Kroll
Restructuring Administration, LLC, is the claims agent and
administrative advisor. A Website dedicated to the restructuring is
at http://www.endotomorrow.com/
Roger Frankel, the legal representative for future claimants in the
Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP, as legal counsels, and Ducera Partners,
LLC, as investment banker.
ENDO INTL: Inks Sale Agreement After Chapter 11 Plan Confirmation
-----------------------------------------------------------------
As previously disclosed, beginning on August 16, 2022, Endo
International plc and certain of its subsidiaries, commenced
voluntary cases under Chapter 11 of the United States Bankruptcy
Code in the U.S. Bankruptcy Court for the Southern District of New
York. The Chapter 11 Cases are being jointly administered under the
caption In re Endo International plc, et al., Case No. 22-22549
(JLG). On December 19, 2023, the Debtors filed a Joint Chapter 11
Plan of Reorganization (as amended, the "Plan") in the Bankruptcy
Court.
On March 22, 2024, the Bankruptcy Court entered an order confirming
and approving the fourth amended version of the Plan, which was
filed on March 18, 2024. The Debtors expect that the effective date
of the Plan will occur once all conditions precedent to the Plan
have been satisfied or waived.
On April 14, 2024, and pursuant to the Plan, the Company and
certain of the Debtors entered into a Purchase and Sale Agreement
with the Buyers party thereto, pursuant to which the Buyers will
acquire substantially all assets of the Company, as contemplated by
the Plan. Capitalized terms used but not otherwise defined herein
have the meanings set forth in the Purchase Agreement.
The Purchase Agreement provides that, among other things and
subject to the terms and conditions set forth therein, at the
Closing:
(i) the DAC Seller will sell, assign, transfer, convey and deliver
to the Enterprise Buyer all right, title and interest in and to all
Endo Luxembourg Transferred Equity Interests;
(ii) each of the U.S. Sellers will sell, assign, transfer, convey
and deliver to the US Buyer all right, title and interest in and to
all Transferred Assets held by such U.S. Sellers;
(iii) each of the Canada Sellers will sell, assign, transfer,
convey and deliver to the Canada Buyer all right, title and
interest in and to all Transferred Assets held by such Canada
Sellers;
(iv) each of the Ireland Sellers, the UK Seller, the Luxembourg
Sellers, the Cyprus Seller and the Bermuda Sellers will sell,
assign, transfer, convey and deliver to the Canada Buyer all right,
title and interest in and to all Transferred Assets held by such
Ireland Sellers, the UK Seller, the Luxembourg Sellers, the Cyprus
Seller and the Bermuda Sellers.
The Endo Companies are not selling, and the Buyers are not
purchasing, any assets other than the Transferred Assets. In
connection with the purchase and sale of the Transferred Assets, at
the Closing, the Buyers will assume, pay, discharge, perform or
otherwise satisfy only the Assumed Liabilities.
The board of directors of the Company and the governing bodies of
each of the Subsidiaries have approved the Purchase Agreement and
the transactions contemplated thereby.
About Endo International PLC
Endo International plc (OTC: ENDPQ) is a generics and branded
pharmaceutical company. It develops, manufactures, and sells
branded and generic products to customers in a wide range of
medical fields, including endocrinology, orthopedics, urology,
oncology, neurology, and other specialty areas. On the Web:
http://www.endo.com/
On Aug. 16, 2022, Endo International and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549).
On May 25, 2023, Operand Pharmaceuticals Holdco II Limited and
Operand Pharmaceuticals Holdco III Limited each filed a voluntary
Chapter 11 petition also in the U.S. Bankruptcy Court for the
Southern District of New York. On May 31, 2023, Operand
Pharmaceuticals II Limited and Operand Pharmaceuticals III Limited
each filed a voluntary Chapter 11 petition also in the Southern
District of New York.
The Company's cases are jointly administered before the Honorable
James L. Garrity, Jr.
Endo initiated the financial restructuring process after reaching
an agreement with a group of its senior debtholders on a
transaction that would substantially reduce outstanding debt,
address remaining opioid and other litigation-related claims, and
best position Endo for the future. This would allow the Company to
advance its ongoing business transformation from a strengthened
financial position to create compelling value for its stakeholders
over the long term.
Endo's India-based entities are not part of the Chapter 11
proceedings. The Company has filed recognition proceedings in
Canada and expects to file similar proceedings in the United
Kingdom and Australia.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom, LLP as
legal counsel; PJT Partners, LP as investment banker; and Alvarez &
Marsal North America, LLC as financial advisor. Kroll
Restructuring Administration, LLC, is the claims agent and
administrative advisor. A Website dedicated to the restructuring is
at http://www.endotomorrow.com/
Roger Frankel, the legal representative for future claimants in the
Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP, as legal counsels, and Ducera Partners,
LLC, as investment banker.
ENGLOBAL CORP: Dismisses Moss Adams; M&K CPAs Named New Auditor
---------------------------------------------------------------
ENGlobal Corporation disclosed in a Form 8-K Report filed with the
U.S. Securities and Exchange Commission that the Audit Committee of
the Board of Directors of the Company recently completed its review
of the Company's independent registered public accounting firm and
considered firms to provide audit services to the Company for the
fiscal year ending December 28, 2024. As a result of this review,
the Committee approved, effective as of April 17, 2024, the
engagement of M&K CPAs, PLLC as the Company's independent
registered public accounting firm for the fiscal year ending
December 28, 2024, and the dismissal of Moss Adams LLP as the
Company's independent registered public accounting firm.
The reports of Moss Adams on the Company's consolidated financial
statements for the fiscal years ended December 30, 2023 and
December 31, 2022 did not contain an adverse opinion or disclaimer
of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles, except that the reports
contained an explanatory paragraph indicating that there was
substantial doubt about the ability of the Company to continue as a
going concern. During the fiscal years ended December 30, 2023 and
December 31, 2022 and the subsequent interim period through April
17, 2024, there were no disagreements with Moss Adams on any
matters of accounting principles or practices, financial statement
disclosure or auditing scope and procedures which, if not resolved
to the satisfaction of Moss Adams, would have caused Moss Adams to
make reference to the matter in their reports. There were no
reportable events during the two fiscal years ended December 30,
2023 and December 31, 2022, other than the following material
weaknesses in the Company's internal control over financial
reporting, as previously disclosed in Part II, Item 9A of the
Company's Annual Report on Form 10-K for the year ended December
30, 2023, filed with the Securities and Exchange Commission on
March 29, 2024: (i) the Company did not have sufficient resources
in place with the appropriate training and knowledge of internal
control over financial reporting in order to ensure the operating
effectiveness; (ii) the Company did not perform an adequate
continuous risk assessment over financial reporting to identify and
analyze risks of financial misstatement due to errors, and
implement necessary changes to internal controls impacted by
changes in the business, organizational structure and reduction in
personnel over the last twelve months; and (iii) the Company did
not have an effective information and communication process that
ensured variances and anomalies were communicated to the
appropriate personnel on a timely basis in order to investigate and
take corrective action to prevent the error.
Accordingly, the Company did not follow established appropriate
control activities through policies and procedures to mitigate risk
to the achievement of the Company's financial reporting objectives,
as follows: (i) the Company's management review controls did not
operate effectively, including the completeness and accuracy of the
data used in the operation of the control, to ensure change orders
and contract values were properly entered into the accounting
system; and (ii) the Company's reconciliation controls did not
operate effectively to timely record on-line payments, other
electronic bank transactions, and unprocessed credit card payments
to suppliers.
During the two most recent fiscal years the Company has not
consulted with M&K with respect to the application of accounting
principles to a specified transaction, either completed or
proposed, or the type of audit opinion that would have been
rendered on the Company's consolidated financial statements, or any
other matters set forth in Item 304(a)(2)(i) or (ii) of Regulation
S-K.
About ENGlobal
Houston, TX-based ENGlobal Corporation, incorporated in the State
of Nevada in June 1994, is a leading provider of innovative,
delivered project solutions primarily to the energy industry.
Houston, Texas-based Moss Adams LLP, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
March 29, 2024, citing that the Company has suffered recurring
losses from operations and has utilized significant cash in
operations that raise substantial doubt about its ability to
continue as a going concern.
EPI HEALTH: Issues Voluntary Recall of Human Drug Products
----------------------------------------------------------
EPI Health, LLC (Novan) has filed Chapter 7 bankruptcy on July 17,
2023. In connection with that filing, the company has ceased and
shutdown all operations and terminated all its employees of all
domestic US Sites. The EPI Health/Novan Trustee is initiating a
voluntary recall of various within-expiry human drug products as a
result of the closures and discontinuation of the post-marketing
quality, regulatory and pharmacovigilance activities for these
marketed products. The discontinuation of these post-marketing
programs means the company will not be able to support or guarantee
that the products will meet all intended specifications through the
labeled shelf life of the product. Further distribution or use of
any remaining product on the market should cease immediately.
Risk Statement: The discontinuation of the post-marketing programs
would result in the company's inability to assure that products
meet the identity, strength, quality, and purity characteristics
that they are purported or represented to possess which render the
products adulterated. While specific risks to patients, from use of
these adulterated products, cannot always be identified or
assessed, it is also not possible to rule out patient risks
resulting from the use of such products. EPI Health has not
received any reports of adverse events related to this recall.
EPI Health, LLC is notifying its distributors and direct consignees
by direct mailing and is requesting they further notify their
customers/consumers/retailers. EPI Health is requesting destruction
of any recalled products. Consumers/distributors/retailers that
have products which are being recalled should discard and contact
their doctor.
Consumers with questions regarding this recall can contact EPI
Health at Phone: 888-671-8858 during normal business hours (8am –
5pm CDT) Monday – Friday or thru email at ppsi7150@sedgwick.com.
Consumers should contact their healthcare provider if they have
experienced any problems that may be related to taking or using
these drug products.
For human drug products, adverse reactions or quality problems
experienced with the use of these products may be reported to the
FDA's MedWatch Adverse Event Reporting program either online, by
regular mail or by fax.
* _Complete and submit the report Online:
www.fda.gov/medwatch/report.htm
* _Regular Mail or Fax: Download form
www.fda.gov/MedWatch/getforms.htm or call 1-800-332-1088 to request
a reporting form, then complete and return to the address on the
pre-addressed form, or submit by fax to 1-800-FDA-0178
This recall is being conducted with the knowledge of the U.S. Food
and Drug Administration.
The affected products are:
LIST AND LOT NUMBERS OF AFFECTED PRODUCTS
Lot Numbers/
Product NDC Expiry Date Indication
------- --- ----------- ----------
Cloderm
(Clocortolone Pivalate)
0.1%
45g Tube- Cream
RX Only 71403-0804-45 SDFC- 5/31/2024
TFBW- 5/31/2025 Dermatomyositis
Minolira
(Minocycline) ER 105mg
30 count Botle Oral Tablet
RX Only 71403-0101-30 T2300765- 11/30/2025 Non-nodular
T2201702A-02/28/2025 moderate
T2201699- 2/28/2025 to severe
T2201698- 2/28/2025 acne vulgaris
Minolira
(Minocycline) ER 135mg
30 count Botle Oral Tablet
RX Only 71403-102-30 T2201700- 02/28/2025 Non-nodular
T2201701- 02/28/2025 moderate to
severe acne vulgaris
Only products and lot numbers listed in the attachments are
affected by the recall. Products lot numbers not included are owned
and distributed by a new product ownership and are continuing to be
monitored under a Quality Program and will remain on the market.
About Novan, Inc.
Based in Durham, N.C., Novan, Inc., (Nasdaq: NOVN), now known as
NVN Liquidation, Inc., is a clinical development-stage
biotechnology company focused on leveraging nitric oxide's
naturally occurring anti-viral, anti-bacterial, anti-fungal and
immunomodulatory mechanisms of action to treat a range of diseases
with significant unmet needs. Nitric oxide plays a vital role in
the natural immune system response against microbial pathogens and
is a critical regulator of inflammation.
Novan Inc. and affiliate, EPI Health, LLC, filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 23-10937) on July 17, 2023.
As of March 31, 2023, Novan disclosed $79,793,000 in assets against
$7,922,000 in liabilities.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Morris, Nichols, Arsht & Tunnell, LLP as
bankruptcy counsel; Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, LLP as special counsel; Sierra Constellation Partners,
LLC as financial advisor; and Raymond James and Associates as
investment banker. Kurtzman Carson Consultants, LLC is the claims
agent.
On July 28, 2023, the U.S. Trustee for Regions 3 and 9 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped Goodwin Procter, LLP as bankruptcy
counsel; Womble Bond Dickinson (US) LLP as co-counsel; and Dundon
Advisers, LLC as financial advisor.
On October 16, 2023, the Bankruptcy Court approved the change of
Novan Inc.'s corporate name to NVN Liquidation Inc.
ERIC MCCRITE: Sale Proceeds & Business Revenue to Fund Plan
-----------------------------------------------------------
Eric McCrite Co. filed with the U.S. Bankruptcy Court for the
Northern District of Georgia a First Plan of Reorganization dated
April 15, 2024.
The Debtor is a reseller in the sporting goods and apparel industry
that became a wholesale distributor in 1989 and evolved into a
supplier of brand name sporting goods and apparel direct to the
consumer.
The corporate headquarters and principal office of the Debtor is
located at certain rented premises located at 4974 Cobb Parkway NW,
Acworth, GA 30101 (the "Premises"). The Debtor is a Georgia
corporation with 100% of its shares owned by Graydon Eric McCrite.
More specifically, the bankruptcy filing was triggered by the
threatened termination of a license the Debtor held to sell dance
and cheer related shoes under the "Pastry" brand name. The license
of the Debtor is scheduled to expire at the end of 2024 and the
Debtor has already made the decision to transition to other brands
or business when the Debtor received a termination threat from the
holder of the license. The "Pastry" shoes comprise most of the
current business of the Debtor.
The Debtor is using the protection of the bankruptcy code to
complete the sale of the Pastry branded products in its possession
and then base a plan of reorganization on a new line of business.
After the Debtor sells the remaining inventory of the Debtor at the
Premises, the Debtor intends to sublease the Premises with net
proceeds of such sublease after payment to the landlord to be used
to issue payments to creditors.
This Plan deals with all property of Debtor and provides for
treatment of all Claims against Debtor and its property.
Class 4 shall consist of general unsecured claims. If the Plan is
confirmed under Section 1191(a) of the Bankruptcy Code, Debtor
shall pay the Holders of Class 5 General Unsecured Claims a
pro-rata share of the Quarterly Unsecured Distribution (the "Total
Unsecured Distribution") based on such Holder's Allowed Class 5
Claim as compared to the total of all Allowed Unsecured Claims in
Classes 4, 5 and 6. Debtor shall pay such Unsecured Total
Distribution in 3 payments of equal amounts commencing on the 1st
day of the 12th full month following the Effective Date (Class 5
Distribution 1) and continuing every year thereafter for a total of
3 distributions. The total amount of such payments shall not exceed
the Total Unsecured Distributions.
Notwithstanding anything else in this document to the contrary, any
claim listed shall be reduced by any payment received by the
creditor holding such claim from any third party or other obligor
and Debtor's obligations hereunder shall be reduced accordingly.
The Claims of the Class 4 Creditors are Impaired by the Plan and
the holders of Class 4 Claims are entitled to vote to accept or
reject the Plan.
Class 5 shall consist of any Unsecured Claim against Debtor held by
counterparties to executory contracts for rejection damages. Debtor
shall pay any Allowed Class 5 Claim as allowed by Final Order of
the Bankruptcy Court pro-rata with all other claims in Classes 4, 5
and 6 beginning on the next Total Unsecured Distribution as
provided for in Class 4 following the entry of such Final Order.
For the avoidance of doubt, such payment shall be based on the
pro-rata amount of such Allowed Class 5 Claim as compared to the
Total Allowed Claims in Classes 4, 5 and 6. The Claims of the Class
5 Creditors are Impaired.
Class 6 shall consist of any Royalty Claim against Debtor. Debtor
shall pay any Allowed Class 6 Claim as allowed by Final Order of
the Bankruptcy Court pro-rata with all other claims in Classes 4, 5
and 6 beginning on the next Total Unsecured Distribution as
provided for in Class 4 following the entry of such Final Order.
For the avoidance of doubt, such payment shall be based on the
pro-rata amount of such Allowed Class 6 Claim as compared to the
Total Allowed Claims in Classes 4, 5 and 6. The Claims of the Class
6 Creditors are Impaired.
Class 6 consists of the Interest Claims. Graydon Eric McCrite shall
retain his ownership interest in the shares and membership in the
reorganized Debtor as such interested existed as of the Filing
Date.
The source of funds for the payments pursuant to the Plan is the
sale of the remaining inventory of the Debtor and revenue of the
Debtor from operating its business which may include, but not be
limited to, the subleasing of the Premises after the sale and
removal of current inventory from the Premises.
A full-text copy of the First Plan of Reorganization dated April
15, 2024 is available at https://urlcurt.com/u?l=xHeCad from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Henry F. Sewell, Jr., Esq.
LAW OFFICES OF HENRY F. SEWELL, JR., LLC
2965 Peachtree Road, NW, Suite 555
Atlanta, GA 30305
Telephone: (404) 926-0053
Email: hsewell@sewellfirm.com
About Eric McCrite
Eric McCrite Co., a company in Acworth, Ga., filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 24-50463) on Jan. 15, 2024, with $1 million to $10 million
in both assets and liabilities. Graydon Eric McCrite, president and
sole shareholder, signed the petition.
Henry Sewell, Esq., at the Law Offices of Henry F. Sewell, Jr., LLC
represents the Debtor as bankruptcy counsel.
EVERGREEN HOMES: Tarek Kiem Named Subchapter V Trustee
------------------------------------------------------
The U.S. Trustee for Region 21 appointed Tarek Kiem, Esq., at Kiem
Law, PLLC as Subchapter V trustee for Evergreen Homes Of Florida,
Inc.
Mr. Kiem will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kiem declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Tarek Kiem, Esq.
Kiem Law, PLLC
8461 Lake Worth Road, Suite 114
Lake Worth, FL 33467
Tel: (561) 600-0406
Email: tarek@kiemlaw.com
About Evergreen Homes Of Florida
Evergreen Homes Of Florida, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-13583) on
April 15, 2024, with $100,001 to $500,000 in assets and $500,001 to
$1 million in liabilities.
Judge Mindy A. Mora presides over the case.
Philip J. Landau at Landau Law, PLLC represents the Debtor as legal
counsel.
EXPRESS INC: Seeks $224MM DIP Loan from Wells Fargo and ReStore
---------------------------------------------------------------
Express, Inc. and affiliates ask the U.S. Bankruptcy Court for the
District of Delaware for authority to use cash collateral and enter
into $224 million in debtor-in-possession revolving and term loan
credit facilities. The DIP Facilities are:
a. a first lien senior secured debtor-in-possession revolving
credit facility in an initial aggregate principal amount of up to
approximately $161 million, consisting entirely of revolving
commitments from a consortium of lenders, agented by Wells Fargo
Bank, National Association.
b. a second lien senior secured debtor in possession
single-draw term facility from a consortium of Lenders, agented by
ReStore Capital, LLC, consisting of (i) single-draw Second Lien New
Money Term Loans in the aggregate principal amount of up to
approximately $25 million, and (ii) a roll-up of remaining
obligations under the Prepetition Second Lien Term Credit
Agreement.
The DIP Facilities are due and payable on the earliest to occur
of:
(a) the date that is 120 days after the Petition Date;
(b) the effective date of a plan of reorganization;
(c) the date of consummation of a sale of all or substantially
all of the Debtors' assets under 11 U.S.C. Section 363; provided
that with respect to the Second Lien DIP Credit Agreement only, if
the Debtors and the Second Lien DIP Term Lenders agree on an
Updated Budget to apply to the liquidation by the Store Closing
Agents of the stores not covered by such sale of all or
substantially all assets, then the Maturity Date of the Second Lien
DIP Credit Agreement will not be triggered pursuant to his clause
(c); and
(d) the date the First Lien DIP ABL Collateral Agent provides
written notice to the Borrower of the election to accelerate all
First Lien DIP ABL Obligations following the occurrence of an event
of default under the First Lien DIP ABL Facility Documentation
consistent with the DIP Orders and the First Lien DIP ABL Facility
Documentation.
The Debtors are required to comply with these milestones:
1. File Motion to approve Store Closing Agreement with respect
to 95 stores acceptable to the DIP Agents: Petition Date;
2. File Bidding Procedures Motion acceptable to the DIP Agents
and Required DIP Lenders, which will contemplate a going concern
sale of all or substantially all of the remaining stores and, in
the alternative, (ii) orderly liquidation of all of the Company's
assets, including (without limitation) an entire chain liquidation
of all stores and all the assets relating thereto;
3. Entry of Store Closing Interim Order acceptable to the DIP
Agents, which must include approval for the Store Closing Agents to
act as the liquidation agents pursuant to the Store Closing
Agreement for any stores not included in the Going Concern Sale on
the terms and conditions contained in the Store Closing Agreement;
4. Entry of Interim DIP Order acceptable to the DIP Agents;
5. Entry of Final DIP Order acceptable to the DIP Agents by
May 22, 2024;
6. Entry of Order approving Bidding Procedures Motion
acceptable to the DIP Lenders by May 22, 2024;
7. Either, in form and substance acceptable to the DIP Agents
and First Lien DIP ABL Required Lenders:
(i) Entry into a "stalking horse" purchase agreement
for a Going Concern Sale that has no financing or due diligence
outs and is otherwise in accordance with these milestones; or
(ii) Entry into a "stalking horse" agreement in the
form of an agreement for a Liquidation (either pursuant to a fee
deal or equity deal). May 22, 2024.
If a Going Concern Purchase Agreement is entered into by the 30th
day following the Petition Date the following additional milestones
will apply:
1. File GC Purchase Agreement with the Court: May 23, 2024
2. Bid Deadline for Going Concern Sale: June 3, 2024
3. Final Store List delivered to DIP Lenders and Debtors for
Going Concern Sale: June 3, 2024
4. Auction Date for Going Concern Sale: June 5, 2024
5. Entry of Sale Order: June 7, 2024
6. Closing of Going Concern Sale: June 10, 2024
If a Going Concern Purchase Agreement is entered into by the 30th
day following the Petition Date the following additional milestones
will apply:
1. Bid Deadline for Liquidation: May 24., 2024
2. Auction Date for Liquidation: May 28, 2024
3. Entry of Order Approving Liquidation Bid: May 30, 2024
4. Commencement of Liquidation: May 31, 2024
The Debtors filed for Chapter 11 due to a severe liquidity crisis
and require postpetition incremental financing to continue
operating their businesses and effectuate a value-maximizing going
concern sale transaction. They explored various liquidity
solutions, including seeking potential buyers for a going concern
sale and leveraging the $49 million CARES Act refund. However, due
to insufficient liquidity, a cash dominion period occurred, and the
Debtors had to pay the full balance of the refund to the ABL
Lenders. They initiated a marketing process for a going concern
sale transaction with the help of their proposed investment banker,
Moelis & Company LLC. However, the accelerated marketing process
was unlikely to yield a sale transaction partner. The Phoenix LOI,
a non-binding letter of intent, will serve as a stalking horse bid
in the in-court sale process.
As of the Petition Date, the Debtors have approximately $188.9
million in total funded debt obligations that include:
$105.7 million in aggregate principal amount outstanding under
the Prepetition ABL Facility; and
$63.1 million in aggregate principal amount outstanding under
the Prepetition FILO Term Loan Facility.
As adequate protection for the use of cash collateral, the First
Lien Prepetition ABL Secured Parties will be granted replacement
liens on the collateral securing the First Lien DIP ABL Obligations
that will be junior to the liens on the collateral securing the
First Lien DIP ABL Obligations and any Permitted Liens (as defined
in the DIP ABL Credit Agreement) but senior to all other liens on
the collateral securing the First Lien DIP ABL Obligations.
The Second Lien Prepetition Term Secured Parties will be granted
replacement liens on the collateral securing the Second Lien DIP
Term Obligations that will be junior to the liens on the collateral
securing the Second Lien DIP Term Obligations and any Permitted
Liens but senior to all other liens in the collateral securing the
Second Lien DIP Term Obligations.
A copy of the motion is available at https://urlcurt.com/u?l=HZT0Rg
from PacerMonitor.com.
About Express Inc.
Express, Inc., operates specialty retail apparel stores. The
Company offers apparel and accessories such as jeans, sweaters,
dresses, suits, and coats. Express serves customers in the United
States.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 24-10831) on April
22, 2024. In the petition signed by Stewart Glendinning, chief
executive officer, the Debtor disclosed $1,298,055,000 in assets
and $1,199,781,226 in liabilities.
The Debtors tapped KIRKLAND & ELLIS LLP AND KIRKLAND & ELLIS
INTERNATIONAL LLP as bankruptcy counsel, KLEHR HARRISON HARVEY
BRANZBURG LLP as local bankruptcy counsel, MOELIS & COMPANY LLC as
investment banker, M3 ADVISORY PARTNERS, LP as restructuring
advisor, and STRETTO, INC. as claims agent.
Stephen L. Iacovo, Esq., at Ropes & Gray LLP serves as counsel to
ReStore Capital, LLC, as Agent to the FILO Lenders. ReStore is also
the agent under a second lien senior secured DIP single-draw term
facility. AlixPartners LLP serves as advisor to the DIP Agents.
Randall L. Klein, Eseq., Eva D. Gadzheva, Esq., and Dimitri G.
Karcazes, Esq., at Goldberg Kohn Ltd., serve as counsel to Wells
Fargo Bank, National Association, as First Lien ABL Agent. Wells
Fargo is also the agent under a first lien senior secured DIP
revolving credit facility.
EYECARE PARTNERS: S&P Downgrades ICR to 'SD' on Private Exchange
----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Missouri-based eye care service provider EyeCare Partners LLC to
'SD' (selective default) from 'CCC'. S&P also withdrew its rating
on the company's existing revolver, which was repaid and terminated
through this transaction. The new debt financing includes a $200
million revolver due 2028.
S&P said, "At the same time, we lowered our issue-level rating on
the company's second-lien term loan due 2028 to 'D' (default) from
'CC' and existing first-lien term loans to 'CC' from 'CCC'. We
placed these ratings on CreditWatch with negative implications,
reflecting our expectation that we will lower these ratings to 'D'
once we confirm which specific debt issues have participated in the
transaction."
EyeCare Partners completed a private debt exchange with holders of
the existing first- and second-lien debt. The exchanges were
completed at a discount to par.
At the same time, the company announced an exchange offer targeting
the remaining first- and second-lien term loans.
S&P said, "We intend to reassess our issuer credit rating on
EyeCare once all exchange transactions are completed and we have
further information on operating prospects for the company.
"The downgrade follows the company's announcement that it closed a
private debt exchange with holders of a majority of its existing
first- and second-lien term loans. We lowered our issue-level
rating on the second lien to 'D' because a portion of the single
tranche loan was exchanged. We consider this transaction to be a
distressed exchange because of its cash to paid-in-kind interest
conversion, debt discount capture, extended maturities, and lower
priority given the addition of a new superpriority term loan. Each
of these factors lead us to view the transaction as distressed
because the debt investors did not receive the originally promised
principal amount or adequate compensation for changes to the
capital structure.
"We placed our issue level rating on the first-lien term loan on
CreditWatch with negative implications because we expect to lower
most or all issues to 'D' from the exchanges that occur in the
private and public exchange transactions. We expect to resolve the
CreditWatch on the first-lien ratings over the next few weeks after
the completion of the public exchange offer to the remaining
existing term loan lenders.
"Because the default affects only a portion of the company's debt
obligations, we lowered our long-term issuer credit rating on
EyeCare to 'SD'. We plan to reevaluate the issuer credit rating in
the coming weeks based on our conventional assessment of default
risk after the completion of the public exchange offer. Our review
will focus on the long-term viability of the company's capital
structure and liquidity position against the backdrop of its market
conditions and weak operating trends."
FARGO BREWING: Thomas Kapusta Named Subchapter V Trustee
--------------------------------------------------------
The Acting U.S. Trustee for Region 12 appointed Thomas Kapusta as
Subchapter V trustee for The Fargo Brewing Company, LLC.
Mr. Kapusta will be paid an hourly fee of $275 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Kapusta declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Thomas J. Kapusta
P.O. Box 90624
Sioux Falls, SD 57109
Email: tkapusta@aol.com
About The Fargo Brewing Company
The Fargo Brewing Company, LLC is a craft brewery company.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. N.D. Case No. 24-30152) on April 15,
2024. In the petition signed by Jared Hardy, president, the Debtor
disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Caren Stanley, Esq., at VOGEL LAW FIRM, represents the Debtor as
legal counsel.
FAST FLOW: Wins Cash Collateral Access Thru May 2
-------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky,
Lexington Division, authorized Fast Flow Plumbing, LLC to continue
using cash collateral, on an interim basis, in accordance with the
budget, with a 10% variance, through May 2, 2024.
As previously reported by the Troubled Company Reporter, the Debtor
obtained two Economic Injury Disaster Loans from the U.S. Small
Business Administration. One in the amount of $250K, which was
disbursed in May 2020; while the second in the amount of $250K,
which was disbursed in the 3rd or 4th quarter of 2021.
The SBA's EIDLs are secured by a UCC all asset lien filed with the
Kentucky Secretary of State on May 19, 2020.
Under the parties' agreements, Fast Flow is required to make
monthly principal and interest payments of $2,459. The balance of
the outstanding principal is due sometime in 2050.
Fast Flow is indebted to MCA Lenders who each will likely claim a
secured interest in future sales and cash collateral. A review of
the records for the secretary of state shows that Flash Funding LLC
is the only MCA who filed a UCC financing statement. The financing
statement was filed on July 13, 2022, more than two years after the
SBA filed a financing statement in connection with the EIDLs.
As adequate protection, the Debtor proposed to make the monthly
contractual payment of $2,45 to the SBA until the earlier of an
order of confirmation, or the conversion or dismissal of the case
and to segregate from the cash collateral $1,522 per week, (or the
total estimated loan balances, multiplied by an annualized interest
rate of 9.5%), as adequate protection for the secured lenders until
the final hearing on the matter commences.
A final hearing on the matter is set for May 2 at 9 a.m.
A copy of the order is available at https://urlcurt.com/u?l=UQhIUq
from PacerMonitor.com.
About Fast Flow Plumbing, LLC
Fast Flow Plumbing, LLC is a provider of plumbing and trenchless
service in Lexington, Kentucky. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Ky. Case No.
24-50346) on March 26, 2024. In the petition signed by Donald
Fitzpatrick, CEO and corporate representative, the Debtor disclosed
up to $50,000 in assets and up to $10 million in liabilities.
Judge Gregory R. Schaaf oversees the case.
J. Christian Dennery, Esq., at Dennery PLLC, represents the Debtor
as legal counsel.
FAXON ENTERPRISES: Court OKs Cash Collateral Access on Final Basis
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Galveston Division, authorized Faxon Enterprises, Inc. d/b/a
Henderson Fabrication to use cash collateral, on a final basis, in
accordance with the budget.
The Debtor has an immediate and critical need to use the
Pre-Petition Collateral to preserve and operate its businesses and
effectuate a restructuring of its business and to maintain the
value of its bankruptcy estate.
Newtek Small Business Finance, LLC asserts an interest in the
Debtor's cash collateral.
As adequate protection, the Prepetition Secured Parties are granted
a valid, binding, continuing, enforceable, fully-perfected
replacement security interest in and lien on all assets of Debtor
and its estate. Such replacement liens and security interests (i)
are subordinate only to any prior existing and validly perfected
liens and security interest in such assets, (ii) are automatically
perfected, and (iii) except to the extent of any such
subordination, they are first priority replacement liens and
security interests in all of the Debtor's assets.
The Prepetition Secured Parties are also granted an allowed
administrative expense claim against the Debtor on a joint and
several basis with priority over all other administrative claims in
the Chapter 11 Case (subject only to the Carve Out), including all
claims of the kind specified under 11 U.S.C. sections 503(b) and
507(b), which administrative claim will have recourse to and be
payable from all prepetition and post petition property of the
Debtor, excluding the Carve Out.
The Adequate Protection Liens/replacement liens granted to the
Pre-Petition Secured Lenders are automatically perfected without
the need for filing of a UCC-1 financing statement with the
Secretary of State's Office or any other such act of perfection.
The Debtor will maintain insurance on the Pre-Secured Lenders'
collateral and pay taxes when due.
The "Carve-Out" will mean: (a) quarterly fees required to be paid
pursuant to 28 U.S.C. section 1930(a)(6) plus interest at the
statutory rate; and any fees payable to the Clerk of the Bankruptcy
Court; (b) actually incurred expenses included in the Budget but
unpaid as of the termination of the Debtor's right to use cash
collateral under the Interim Order; and (c) the aggregate amount of
any fees and expenses of an estate professionals included in the
Budget which are actually incurred, but unpaid as of the
termination of the Debtor's right to use cash collateral.
These events constitute an "Event of Default":
(a) If the Debtor breaches any term or condition of the Order;
(b) if the case is converted to a case under Chapter 7 of the
Bankruptcy Code;
(c) if the Debtor is removed from possession and a Chapter 11 or
other Trustee, such as the Subchapter V Trustee, is appointed to
take over Debtor's business/operations; and
(d) If the case is dismissed.
A copy of the order is available at https://urlcurt.com/u?l=bxERB9
from PacerMonitor.com.
About Faxon Enterprises, Inc.
Faxon Enterprises, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-80075) on March
24, 2024.
In the petition signed by James E. Faxon, owner, the Debtor
disclosed up to $10 million in both asset and liabilities.
Judge Jeffrey P. Norman oversees the case.
Nicholas Zugaro, Esq., at Dykema Gossett PLLC, represents the
Debtor as legal counsel.
FORMATION HOLDINGS: Wins Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized Formation Holdings, LLC d/b/a Worth
Steel Fabrication to use cash collateral, on an interim basis, in
accordance with the budget, with a 15% variance.
The Debtor intends to use the cash collateral to pay post-petition
operating expenses and obtain goods and services needed to carry on
its businesses.
The Debtor began experiencing cash flow issues in the third quarter
of 2023. In order to maintain the Debtor's business and its
operations and preserve the going concern value of the Debtor's
business, the Debtor obtained pre-petition loans for working
capital from its majority owners, Skyward Forge, LP, and Echo
Financial, LLC.
NewTek Small Business Finance, LLC asserts it has a first priority
lien on substantially all of the Debtor's assets, including all of
the Debtor's accounts, accounts receivable, and the proceeds
thereof and that all cash utilized by the Debtor is NewTek's cash
collateral.
The proposed DIP lender, Skyward Forge, LP, will assert a first
priority lien based on amounts to be advanced under the proposed
DIP Facility, which will be used to fund operations during the
initial stages of the case.
As partial adequate protection for the Debtor's use of cash
collateral, NewTek will receive, commencing the first week of May,
2024, the monthly interest payment due on its loan with the
Debtor.
As partial adequate protection for the Debtor's use of cash
collateral, the Prepetition Secured Parties are granted, to the
extent of any diminution in value of their interests in the
Prepetition Collateral, effective as of the Petition Date, valid,
binding, enforceable, and automatically perfected post-petition
liens pursuant to 11 U.S.C. Section 361(2) in the Debtor's
accounts, accounts receivable, inventory, and other assets
generated by or received by the Debtor from the Prepetition
Collateral subsequent to the Petition Date to the same extent and
same order and priority existing as of the Petition Date, but only
to the extent that the Prepetition Secured Parties had a valid,
perfected prepetition lien and security interest in such collateral
as of the Petition Date.
The use of cash collateral and the Adequate Protection Liens will
be subordinate and subject to (a) any and all post-petition fees
and expenses of the Clerk of the Court and statutory fees and
compensation payable to the Subchapter V Trustee; and (b) all
post-petition fees and expenses of Debtor's counsel and all other
estate professionals employed by order of the Court.
These events constitute an "Event of Default":
a. Conversion of the Chapter 11 case to a case under Chapter 7 of
the Bankruptcy Code; or
b. The lifting of the automatic stay for any other party other than
the Prepetition Secured Parties authorizing such party to proceed
directly against the cash collateral, or entry of a final order by
the bankruptcy court authorizing any party to foreclose or
otherwise enforce any lien or other right such other party may have
in and to the Property and/or any part of the Collateral.
Unless otherwise agreed to in writing by Skyward and NewTek, the
Debtor's right to use cash collateral will expire on the earlier
of: (a) the Termination Date, unless extended by the terms of the
Order; (b) an Event of Default; or (c) the Court entering a
subsequent order terminating the Debtor's right to use cash
collateral.
A final hearing on the matter is set for May 17, 2024 at 9:30 a.m.
A copy of the order is available at https://urlcurt.com/u?l=uRsczG
from PacerMonitor.com.
About Formation Holdings, LLC
Formation Holdings, LLC is a steel fabrication company that
provides structural steel to the construction and the energy
industries.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-41329) on April 16,
2024. In the petition signed by Tanner West, chief executive
officer, the Debtor disclosed $2,092,836 in assets and $3,367,015
in liabilities.
Judge Edward L. Morris oversees the case.
Bryan C. Assink, Esq., at BONDS ELLIS EPPICH SCHAFER JONES LLP,
represents the Debtor as legal counsel.
FTAI AVIATION: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has assigned FTAI Aviation Ltd. (FTAI Aviation) a
Long-Term Issuer Default Rating (IDR) of 'BB-' with a Stable Rating
Outlook. Fitch has also affirmed the preferred share debt rating of
FTAI Aviation at 'B'/'RR6' and the existing senior unsecured debt
rating of Fortress Transportation and Infrastructure LLC (FTAI LLC)
at 'BB-'. The ratings have been removed from Rating Watch Negative
(RWN). Fitch has additionally assigned a final rating of 'BB-' to
FTAI LLC's $700 million, 7% senior unsecured debt due in 2031
(ISIN:US34960PAF80).
Fitch has also corrected an error whereby the senior unsecured debt
was associated with FTAI Aviation as the issuing entity instead of
FTAI LLC, following a corporate reorganization in November 2022. As
a result, Fitch has withdrawn FTAI LLC's Long-Term IDR of 'BB-'/RWN
as the rating was published in error. This error correction will
not impact FTAI Aviation's Long-Term IDR or the rating assigned to
FTAI Aviation's preferred share debt.
KEY RATING DRIVERS
The affirmation of FTAI Aviation's ratings and removal of the RWN
reflects the stronger operating performance and increasing
contribution from the capital-light aerospace products business
(27% of 2023 adjusted EBITDA), which provides enhanced business
model diversification and mitigates the slower-than-expected
improvement in tangible equity. Fitch expects modest improvement in
internal capital generation over the medium-term, supported by
sound operating performance in the business overall, with a return
to positive tangible equity within the Outlook horizon. Failure to
do so could result in a negative rating action.
While FTAI Aviation's balance sheet leverage (gross debt to
adjusted tangible equity, with 50% equity credit afforded to
preferred share debt) remained negative at YE23, cash flow leverage
as calculated by Fitch (gross debt to adjusted EBITDA) improved to
4.8x at YE23 from 5.9x at YE22. While tangible equity remains
negative, Fitch considers the leverage profile to be adequate for
the rating level given the increasing contribution from FTAI's
aerospace product segment, which provides material incremental cash
flows to support debt repayment. As the aerospace products
segment's contribution to consolidated adjusted EBITDA increases
over time, with management targeting roughly 50% by 2027, cash flow
leverage will be an increasingly relevant complementary metric.
Adjusted tangible equity amounted to negative $57.9 million at
YE23, an improvement from negative $170.2 million a year ago given
stronger operating performance. While Fitch expects further
improvements in earnings, more meaningful capital accumulation is
expected to remain constrained by high interest expenses and
dividend payouts. As such, deleveraging remains subject to a
reduction in debt, notably supported by proceeds from the sale of
non-core assets, as well as an improvement in equity as the firm
sustains strong operating performance and adopts a measured
approach to capital management, including a reduction of dividend.
Fitch expects positive tangible equity to be restored over the next
12 months to 18 months. Failure to do so could result in downward
rating pressure, particularly if earnings contributions from the
aerospace product's capital-light business activities weaken.
FTAI Aviation's ratings continue to benefit from its market
position as a niche aviation leasing and maintenance firm focused
mainly on aged aviation assets, good portfolio diversification and
an unsecured funding profile. This is balanced against a relatively
short operating track record, elevated re-lease risk due to shorter
term leases on engines, and historically weaker, albeit improving,
profitability, with high interest expenses and dividend payouts
limiting capital accumulation.
The company's aviation leasing portfolio was comprised of 96
aircraft and 267 engines with a combined net book value of around
$1.9 billion at Dec. 31, 2023. Utilization rates are generally
sound across the portfolio but are lower for engines, 67% at YE23,
compared to aircraft at 86%. Average remaining lease terms are
shorter for engines (16 months versus 47 months for aircraft),
which implies inherent re-lease risk. However, this has been
managed well to date, with FTAI benefitting from prevailing supply
shortages for engines in the current environment.
Over the past 18 months, core earnings have been enhanced by the
ramp of FTAI Aviation's aerospace products business, focused on the
maintenance and repair of CFM International CFM56 and, more
recently, International Aero Engines (IAE) V2500 engines, which are
typically utilized on popular, current technology narrowbody
aircraft. Given its modular service approach and use of Parts
Manufacturer Approved (PMA) spares, FTAI Aviation is able to
service engines with quick turn-around times and at competitive
rates.
By leveraging a pool of feed-stock engines, which are effectively
sourced through its engine lease channel, FTAI Aviation has scaled
this business quickly, contributing 27% to adjusted EBITDA in 2023,
with a margin of 35%; compared to 17% and 42%, a year ago,
respectively. Given the ongoing supply-demand challenges for
aviation assets and competition for maintenance slots, Fitch views
this offering as beneficial in diversifying from FTAI Aviation's
more balance sheet-intensive aviation leasing activities.
FTAI Aviation reported pre-tax profit from operations of $184
million in 2023, up from a loss of $105 million in 2022. Operating
performance benefited from $81 million in net proceeds from asset
sales in 2023 and increased scale from the aerospace products
offering. Net spreads (including maintenance income) were 13.8% in
2023, above the average of 11.6% from 2021-2023, which is higher
than most peers given FTAI Aviation's focus on older aviation
assets. As FTAI Aviation's earnings profile benefits from more
seasoned contributions of its aerospace product offering, Fitch
expects profitability to remain sound and in line with recent 2023
performance.
FTAI Aviation's funding profile is fully unsecured, which allows
for good financial flexibility. Following the issuance of $700
million of senior unsecured debt in April 2024, re-financing risk
is limited, with the nearest bond maturity in August 2027, when
$400 million of unsecured notes are due. Liquidity remains adequate
in the absence of a committed order book, supported by $91 million
of unrestricted cash, $300 million of committed revolver capacity,
which was fully undrawn at YE23, and proceeds generated from
aviation asset sales, which amounted to $478 million in 2023.
The Stable Outlook reflects Fitch's expectations that the company's
aviation assets will continue to generate sound yields and its
capital light aerospace business will continue to grow profitably
to support business profile diversification. The Outlook also
reflects Fitch's expectation that FTAI Aviation's tangible equity
(adjusted for 50% equity credit on its preference share debt) will
be restored over the Outlook horizon while at the same time
sustaining cash flow leverage (adjusted gross debt to EBITDA) below
5x and maintaining an adequate liquidity position.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- An inability to restore positive tangible equity over the Outlook
horizon;
- A sustained increase in cash flow leverage above 5x, as
calculated by Fitch;
- A weakening in competitive positioning, in particular if arising
from a sustained weakness in aviation leasing activities and/or
missteps in scaling the aerospace business;
- A sustained reduction in funding flexibility, notably the
introduction of secured debt leading to the unsecured debt to total
debt ratio reducing below 75%;
- The recognition of sizable aircraft and/or engine impairments,
higher repossession activity, and/or difficulty re-leasing aircraft
at economical rates; and/or
- A reduction in available liquidity.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A meaningful reduction in leverage, such that debt to tangible
equity was maintained below 5.5x and/or debt to EBITDA was
maintained below 3.0x;
- A sustained improvement in profitability through cycles;
- Maintenance of a predominantly unsecured funding profile;
- An improved level of business profile diversification, notably
underpinned by profitable growth of capital light operations;
and/or
- Strong risk management and credit performance through a full
credit cycle would also be viewed favorably longer-term.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
FTAI LLC's unsecured debt rating is equalized with the Long-Term
IDR reflecting the company's unsecured funding mix and Fitch's
expectation for average recovery prospects in a stressed scenario.
FTAI Aviation's preferred share rating is two notches below the
Long-Term IDR, reflecting the subordination and heightened risk of
non-performance of the instrument relative to other obligations.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The unsecured debt rating is primarily sensitive to changes in the
Long-Term IDR and secondarily to the level of unencumbered balance
sheet assets relative to outstanding debt. A decline in the level
of unencumbered asset coverage and/or a material increase in the
use of secured debt, could result in the notching of the unsecured
debt rating down from the Long-Term IDR.
The preferred share rating is primarily sensitive to changes in the
Long-Term IDR and is expected to move in tandem. However, the
preferred share rating could be downgraded by an additional notch
to reflect further structural subordination should the firm
consider other hybrid issuances.
ADJUSTMENTS
The Standalone Credit Profile has been assigned in line with the
implied Standalone Credit Profile.
The Asset Quality score has been assigned below the implied score
due to the following adjustment reason(s): Risk profile and
business model (negative).
The Earnings & Profitability score has been assigned below the
implied score due to the following adjustment reason(s): Earnings
stability (negative).
The Capitalization & Leverage score has been assigned above the
implied score due to the following adjustment reason(s): Risk
profile and business model (positive).
The Funding, Liquidity & Coverage score has been assigned above the
implied score due to the following adjustment reason(s): Funding
flexibility (positive).
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
FTAI Aviation Ltd. LT IDR BB- New Rating
Preferred LT B Affirmed RR6 B
Fortress
Transportation
and Infrastructure
Investors LLC LT IDR WD Withdrawn BB-
senior unsecured LT BB- New Rating
senior unsecured LT BB- Affirmed BB-
FXI HOLDINGS: S&P Affirms 'CCC+' ICR, Outlook Negative
------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on FXI
Holdings Inc. S&P also affirmed its 'CCC+' issue-level ratings and
'4' recovery ratings on both tranches of the company's 12.25%
senior secured notes due 2026.
The negative outlook reflects S&P's expectation that the company's
liquidity will remain pressured over the next 12 months, with
minimal room for any unanticipated weakness in cash flows and
operational setbacks.
S&P expects FXI's S&P Global Ratings adjusted EBITDA to continue to
improve in 2024, while its credit metrics remain in the highly
leveraged range on a weighted average basis.
After the increase in consumer spending in the company's key end
markets, including bedding and furniture, during the first two
years (2020-2021) of the COVID-19 pandemic years, demand contracted
sharply in 2022 and 2023 as spending on durable goods slowed. FXI
outperformed the overall subdued bedding market in 2023, primarily
due to new business wins with key customers in the retail segment
and increased aisle share. However, lower volumes and pricing
pressures in the original equipment manufacturer (OEM) bedding and
furniture segment hindered operating performance.
S&P said, "In 2024, we expect end market demand for discretionary
items to remain soft, with continued cautious consumer spending on
big ticket items, while the company should benefit from retail
share gains. We also forecast FXI's S&P Global Ratings adjusted
EBITDA margins gradually increasing but remaining in the low- to
mid-teen percentage range. Ultimately, we still expect FXI's
leverage metrics to remain in the highly leveraged range, with S&P
Global Ratings' adjusted debt to EBITDA of 7.5x-8.5x and
FFO-to-debt close to zero or slightly negative on a weighted
average basis.
"Despite improved leverage metrics relative to our expectations, we
forecast the company's FOCF remaining negative during the next 12
months, which would strain liquidity.
Despite higher-than-expected S&P Global Ratings adjusted EBITDA in
2023, FXI still generated negative FOCF last year because it
carries a sizeable cash interest burden on its two senior secured
notes tranches. Considering the lingering macroeconomic risks and
the soft underlying demand in the company's cyclical key end
markets in 2024, S&P expects free cash flow deficits to increase
liquidity pressures. This likely would reduce the borrowing cushion
under the ABL facility, which is subject to a minimum availability
financial covenant since the amendment in December 2023.
S&P said, "We anticipate the company's short-term liquidity would
benefit from certain ad hoc cash inflows. Although FXI has the
ability and willingness to meet its upcoming semiannual interest
payments on the senior secured notes in May 2024 and November 2024,
we do not believe the company has sufficient liquidity to absorb
further unanticipated operational setbacks. In the long term, we
believe FXI's financial commitments are unsustainable unless its
earnings and free cash flows improve significantly from current
levels. Our base-case forecast does not incorporate another
transaction that we would view as a distressed debt exchange."
S&P continues to assess FXI's business risk as weak.
S&P said, "Our ratings reflect the company's limited geographic
diversity, customer concentration, and exposure to cyclical end
markets. We believe FXI's strong market position and the
cost-reduction measures it has taken since mid-2022 to support
earnings during a weak demand environment somewhat offset these
risks. FXI's business risk profile benefits somewhat from the
presence of chemical collars on some of its customer contracts,
which helps mitigate against volatility in raw material costs.
"The negative outlook on FXI reflects our expectation that the
company's credit metrics and liquidity will remain pressured over
the next 12 months due to a high interest burden, despite
improvements in business performance. The company's S&P Global
Ratings adjusted debt to EBITDA decreased to below 8.5x as of
year-end 2023, and we believe it will remain between 7.5x and 8.5x
on a weighted average basis.
"We expect overall demand in FXI's key end markets, including
bedding and furniture, to remain muted through most of 2024, while
the company's operating results benefit from share gains in the
retail bedding segment. At the same time, we expect the company
will continue to generate negative free cash flow and see increased
pressure on liquidity over the next 12 months, resulting in lower
cushion against its financial covenant. We do not incorporate any
significant debt-funded acquisitions or shareholder rewards in our
base-case scenario.
"We could lower our rating on FXI over the next few quarters if the
company's liquidity position deteriorates further such that
compliance against its financial covenant is unlikely or its
liquidity sources drop below 1x its liquidity uses over the next 12
months. This could occur if the company's operating performance is
weaker than expected due to lower volumes or competitive pressures
leading to lower-than-expected earnings and cash flows. In this
scenario, debt to EBITDA would also reach 10x or above, or EBITDA
margins would decline relative to our base case, leading to
materially negative FOCF. We could also lower the rating if the
company undertakes any transactions that we would view as
distressed debt exchanges.
"We could consider a positive rating action on FXI over the next 12
months if the company's revenues and earnings are better than we
expect, leading to FFO to debt rising to the mid-single-digit
percentage, and S&P Global Ratings-adjusted debt to EBITDA dropping
below 8x sustainably. This could occur if operating performance is
stronger than expected due to market share gains, if discretionary
consumer spending on durable goods recovers, or if margins
increase. Before taking a positive rating action, we would also
need to be confident that the company could improve its liquidity
profile by generating positive free cash flow, increase cushion
against its financial covenant, and refinance its sizeable debt
maturities coming due in November 2026. We would also need to
believe the company's sponsors will maintain financial policies
that would support maintenance of credit measures at such improved
levels."
GMS SUNSET: May Use Cash Collateral Thru May 14
-----------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia,
Alexandria Division, authorized GMS Sunset, LLC to continue using
cash collateral, through May 14, 2024 in accordance with the
Stipulation and Consent Order Authorizing Interim Use of Cash
Collateral entered on November 7, 2023.
The Debtor and Business Finance Group (f/k/a Virginia Asset
Financing Corporation) as lender agreed that the Debtor may use
cash collateral in accordance with the budget, with a 10%
variance.
Prior to the Petition Date, the Lender extended to the Debtor a
$469,000 U.S. Small Business Administration Loan as evidenced by,
among other things, a U.S. Small Business Administration Note,
dated September 8, 2004, executed and delivered by the Debtor to
the order of Lender.
As of the Petition date, the total balance due and owing by the
Debtor under the Loan Documents was $266,628. In addition, there
may be due and owing, to the extent permitted by 11 U.S.C. Section
506(b), from the Debtor, all interest and late charges which accrue
after the Petition Date plus all expenses and fees.
A copy of the order is available at https://urlcurt.com/u?l=cQ4Uva
from PacerMonitor.com.
About GMS Sunset LLC
GMS Sunset is a Single Asset Real Estate debtor (as defined in 11
U.S.C. Section 101(51B)).
GMS Sunset LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No.
23-11315) on August 17, 2023. The petition was signed by George
Cholakis as president. At the time of filing, the Debtor estimated
$1 million to $10 million in assets and $100,000 to $500,000 in
liabilities.
Judge Klinette H Kindred presides over the case.
Nathan A. Fisher, Esq. at Fisher-Sandler, LLC represents the Debtor
as counsel.
GOLD STAR: Unsecured Creditors to Split $23K over 60 Months
-----------------------------------------------------------
Gold Star Transportation Services, LLC filed with the U.S.
Bankruptcy Court for the Middle District of Florida a Subchapter V
Plan of Reorganization dated April 15, 2024.
Goldstar is a Florida Limited Liability Company formed on October
13, 2014. Goldstar operates a tour bus transportation company
providing bus tours in and around Central Florida.
The Debtor filed the instant case due to a severe slowdown of
business during the COVID19 pandemic. The instant Subchapter V case
plan will enable the Debtor to repay and restructure all its debt
within 12 months of the Effective Date of the Plan as the Debtor
continues to diversify its customer base and increase revenue.
This Plan provides for payment to: 8 classes of secured claims; 1
class of general unsecured claims; and 1 class of equity security
holders. Creditors receiving distributions under the Plan will be
paid from the net proceeds of the operations of the Debtor's
business, its projected cumulative disposable income.
This is a "pot" plan. Non-priority unsecured creditors will receive
a pro rata distribution of a "pot" of $23,432.23, which is more
than such creditors would receive under a hypothetical Chapter 7
liquidation. This Plan also provides for the payment of
administrative and priority claims in full (100%).
Class 9 consists of Allowed general unsecured claims. To the extent
the following unsecured creditors have Allowed clams, each such
creditor will receive its pro rata share of the $23,432.43 "pot"
for unsecured creditors. Payments of each creditor's pro rata share
will be split into 60 equal monthly payments commencing on the
Effective Date of the Plan. This Class is impaired.
Class 10 consists of all membership interests, warrants, and equity
interests currently issued or authorized in the Debtor. Holders of
Class 10 claims shall retain their full equity interest in the same
amounts, percentages, manner and structure as existed on the
Petition Date.
The Plan contemplates that the Reorganized Debtor will continue to
operate the Debtor's business. Except as explicitly set forth in
this Plan, all cash in excess of operating expenses generated from
operation until the Effective Date will be used for Plan Payments
or Plan implementation, cash on hand as of Confirmation shall be
available for Administrative Expenses.
A full-text copy of the Plan of Reorganization dated April 15, 2024
is available at https://urlcurt.com/u?l=pk4wt9 from
PacerMonitor.com at no charge.
Attorney for the Debtor:
WINTER PARK ESTATE PLANS &REORGS: A PRIVATE LAW
PRACTICE
Melissa A. Youngman, Esq.
831 W. Morse Blvd.
Winter Park, FL 32789
407.374.1372
Email: my@melissayoungman.com
About Gold Star Transportation Services
Gold Star Transportation Services, LLC provides charter bus
services in Kissimmee, Florida, to local attractions. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Fla. Case No. 6:24-bk-00177-GER) on January 15, 2024.
In the petition signed by Luis A. Primiciero, managing member, the
Debtor disclosed up to $50,000 in assets and up to $100,000 in
liabilities.
Judge Grace E. Robson oversees the case.
Melissa Youngman, Esq., at Winter Park Estate Plans & Reorgs,
represents the Debtor as legal counsel.
GROM SOCIAL: Inks Omnibus Amendment Agreement With Generating Alpha
-------------------------------------------------------------------
Grom Social Enterprises, Inc. disclosed in a Form 8-K filed with
the Securities and Exchange Commission that on April 24, 2024, it
entered into an omnibus amendment agreement with Generating Alpha
Ltd., a Saint Kitts and Nevis Corporation.
Pursuant to the Omnibus Amendment Agreement, (1) the securities
purchase agreement dated March 11, 2024 entered into with the
Investor (as amended on April 24, 2024) was amended to clarify that
the calculation of the number of put shares issuable by the Company
without any shareholder approval required by an exchange shall
include all shares of the Company's common stock, par value $0.001
beneficially owned by the Investor, and (2) the common stock
purchase warrant dated March 11, 2024 issued to the Investor in
connection with the March 2024 SPA as a commitment fee was amended
to remove its alternative cashless exercise feature.
Amendments to the April 2024 SPA and
the April 2024 Note
On April 24, 2024, the Company entered into a first amendment
agreement to the securities purchase agreement dated April 1, 2024
with the Investor pursuant to which the Company shall promptly
effect a reverse stock split in the event that the closing price of
Common Stock falls below $0.25 per share for a period of five
consecutive trading days.
In connection with the April 2024 SPA Amendment, the Company
entered into an amendment to the convertible promissory note dated
April 4, 2024 issued to the Investor in connection with the April
2024 SPA with the Investor pursuant to which in no event shall the
conversion price be less than $0.17.
About Grom Social Enterprises Inc.
Boca Raton, Florida-based Grom Social Enterprises, Inc. --
www.gromsocial.com -- is a growing social media platform and
original content provider of entertainment for children under 13,
which provides safe and secure digital environments for kids that
can be monitored by their parents or guardians . The Company has
several operating subsidiaries, including Grom Social, which
delivers its content through mobile and desktop environments (web
portal and apps) that entertain children, lets them interact with
friends, access relevant news, and play proprietary games while
teaching them about being good digital citizens and Curiosity Ink
Media, a global media company that develops, acquires, builds,
grows, and maximizes the short, mid & long-term commercial
potential of Kids & Family entertainment properties and associated
business opportunities. The Company also owns and operates Top
Draw Animation, which produces award-winning animation content for
some of the largest international media companies in the world.
Grom also includes Grom Educational Services, which provides web
filtering for K-12 schools, government and private businesses.
Somerset, New Jersey-based Rosenberg Rich Baker Berman, P.A., the
Company's auditor since 2022, issued a "going concern"
qualification in its report dated April 16, 2024, citing that the
Company's significant operating losses, working capital deficit and
negative cash flows from operations raise substantial doubt about
its ability to continue as a going concern.
GWG HOLDINGS: Beneficient Responds to Trustee's Complaint
---------------------------------------------------------
Beneficient, a technology-enabled platform providing liquidity,
primary capital, and related trust and custody services to holders
of alternative assets through its proprietary online platform, on
April 22 issued the following statement in response to a complaint
filed on April 19, 2024, by the trustee of the GWG Litigation
Trust:
"Beneficient stated that it is disappointed but not surprised that
the Litigation Trustee has decided to file suit against
Beneficient, affiliated entities, and its officers and directors.
The Litigation Trustee crafted a deliberately selective reading of
complex and permissible business transactions, negotiated at arm's
length that spanned many years as GWG Holdings sought to implement
its disclosed business strategy to diversify away from its
concentrated investment in life insurance policies. Although he was
appointed ten months ago to conduct another investigation, the
Litigation Trustee's claims are similar to issues previously
asserted in GWG Holdings bankruptcy proceeding, at great expense to
the GWG Holdings estate. The market has been aware of the
allegations asserted in the GWG Holdings bankruptcy since 2022."
"As it extensively laid out in various GWG Holdings bankruptcy
filings, Beneficient has robust defenses to these claims.
Beneficient looks forward to dismantling the Litigation Trustee's
allegations in court and providing a clear, factual and complete
response to the complaint's narrative.
"Beneficient remains focused on achieving new milestones through
its platform, which it believes offers a source of much-needed
public market liquidity to investors in and managers of private
market assets."
The GWG Litigation Trust was formed as part of the resolution of
the GWG bankruptcy and has the right to investigate, litigate,
settle, or abandon potential claims previously held by the GWG
bankruptcy estate. The sole beneficiary of the GWG Litigation
Trust is the GWG Wind Down Trust, which was created along with the
GWG Litigation Trust, and holds shares in Beneficient.
About Beneficient
Beneficient (Nasdaq: BENF) -- Ben, for short -- is on a mission to
democratize the global alternative asset investment market by
providing traditionally underserved investors -- mid-to-high net
worth individuals and small-to-midsized institutions -- with early
liquidity exit solutions that could help them unlock the value in
their alternative assets. Ben's AltQuote tool provides customers
with a range of potential liquidity exit options within minutes,
while customers can log on to the AltAccess portal to digitize
their alternative assets in order to explore early exit
opportunities, receive proposals for liquidity in a secure online
environment, engage custodial services for the digital alternative
assets and receive data analytics to better inform investment
decision making. Its subsidiary, Beneficient Fiduciary Financial,
L.L.C., received its charter under the State of Kansas'
Technology-Enabled Fiduciary Financial Institution Act and is
subject to regulatory oversight by the Office of the State Bank
Commissioner.
About GWG Holdings
Headquartered in Dallas Texas, GWG Holdings, Inc. (NASDAQ: GWGH)
conducts its life insurance secondary market business through a
wholly owned subsidiary, GWG Life, LLC, and GWG Life's wholly owned
subsidiaries.
GWG Holdings Inc. and affiliates sought Chapter 11 bankruptcy
protection (Bankr. S.D. Texas Lead Case No. 22-90032) on April 20,
2022. In the petition filed by Murray Holland, president and chief
executive officer, GWG Holdings disclosed between $1 billion and
$10 billion in both assets and liabilities.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Mayer Brown, LLP and Jackson Walker, LLP, as
bankruptcy counsels; Tran Singh, LLP as special conflicts counsel;
FTI Consulting, Inc. as financial advisor; and PJT Partners, LP, as
investment banker. Donlin Recano & Company is the Debtors' notice
and claims agent.
National Founders LP, a debtor-in-possession (DIP) lender, is
represented by Michael Fishel, Esq., Matthew A. Clemente, Esq., and
William E. Curtin, Esq., at Sidley Austin, LLP.
The U.S. Trustee for Region 7 appointed an official committee to
represent bondholders in the Debtors' cases. The committee tapped
Akin Gump Strauss Hauer & Feld, LLP and Porter Hedges, LLP, as
legal counsels; Piper Sandler & Co. as investment banker; and
AlixPartners, LLP as financial advisor.
The Debtors obtained confirmation of their Further Modified Second
Amended Joint Chapter 11 Plan on June 20, 2023.
HELIOS SOFTWARE: Moody's Affirms 'B2' CFR Amid Refinancing Deal
---------------------------------------------------------------
Moody's Ratings has affirmed Helios Software Holdings, Inc.'s
("Helios") corporate family rating at B2 and its probability of
default rating at B2-PD. Moody's has also affirmed the B2
instrument ratings on Helios' backed senior secured 1st lien notes,
backed senior secured term loans and backed senior secured revolver
and European co-borrower ION Corporate Solutions Finance S.a.r.l.'s
("ION Sarl") backed senior secured term loan. Concurrently, Moody's
has also assigned B2 ratings to Helios' proposed $400 million
backed senior secured first lien notes and ION Sarl's EUR300
million backed senior secured first lien notes. The ratings on the
existing $599 million senior secured term loan will be withdrawn
once these obligations are fully repaid. The outlook remains stable
for both issuers. The company provides software and services for
treasury risk management, as well as other focused capital markets
functions.
The ratings affirmation is driven by the company's operating
performance, broadly in line with Moody's expectations for the year
ended December 31, 2023, and Moody's Ratings' expectation that
Helios will be able to continue executing on its strategy over the
next 12-18 months, despite a likely moderation in revenue growth
in the sector. The increase in leverage from the proposed
transaction is minimal with pro forma debt-to-EBITDA (Moody's
Ratings adjusted) at 7.30x versus 7.10x pre-transaction for the
last 12-months ended December 31, 2023.
The company has announced plans to refinance its $599 million term
loan B and portions of its EUR1,005 million term loan B, with a new
$400 million and EUR300 million senior secured notes issuance. The
refinancing of the notes will also pay for transaction fees and
expenses and add cash to the balance sheet. With this transaction,
Helios will extend its overall debt maturity profile, reduce
interest expenses, as well as optimize funding sources of fixed
versus floating rate debt.
RATING RATIONALE
Helios' B2 CFR is principally constrained by high leverage with
debt-to-EBITDA leverage of 7.1x for the 12-month period ending
December 31, 2023 and 7.3x pro forma for the proposed transaction.
The company's credit profile is also negatively impacted by ION's
relatively limited scale as a niche provider of software and
services for treasury risk management, foreign exchange processing,
and energy and commodity trading risk management (E/CTRM)
applications and a degree of volatility in operating performance
from nonrecurring professional services which has weighed on sales
in recent years. While top line growth and strong profit margins
have continued, as evidenced by recent transactions the company
continues to push the bounds of its leverage profile at the current
rating level.
Additionally, corporate governance concerns related to the
company's concentrated ownership by ION Group present an element of
uncertainty as the potential for incremental acquisitions,
shareholder distributions, and the practice of ION as well as ION
Group's other subsidiaries periodically extending sizable
intercompany loans to non-restricted entities could constrain
leverage reduction efforts. These risks are partially mitigated by
ION's solid market position within its niche sector, serving over
2,000 of the world's largest corporations, financial institutions,
central banks, and energy and utility companies. The company's
credit quality is also supported by a largely subscription-based
sales model that provides a degree of top-line visibility, given a
significant proportion of the revenue is recurring and client
attrition is minimal. These factors, coupled with strong
profitability metrics, should facilitate relatively healthy free
cash flow generation and good liquidity.
The B2 ratings for the company's senior secured bank debt and the
proposed senior secured bonds reflect the borrower's B2-PD PDR and
a Loss Given Default ("LGD") assessment of LGD4. The B2 secured
debt ratings are consistent with the CFR as the new and existing
secured debt instruments account for the preponderance of Helios's
debt structure and rank pari passu in the capital structure.
Helios's pro forma cash balance of approximately $94 million
following the completion of the proposed financing supports the
parent company's good liquidity that is also bolstered by Moody's
expectation of free cash flow generation of approximately 1% of
debt over the next 12 months when including anticipated dividends
that are typical of the company's financial policy. The company's
liquidity is further enhanced by an undrawn $30 million revolving
credit facility, but the revolver is considered small in relation
to the company's projected interest expense. While the term loans
are not subject to financial covenants, the revolving credit
facility has a springing covenant based on a maximum net leverage
ratio which the company should be comfortably in compliance with
over the next 12-18 months.
The stable outlook reflects Moody's expectation that ION will
generate low single digit organic revenue growth over the next 12
months, but could be impacted by a degree of ongoing sales
volatility principally from professional services offerings or if
there are fluctuations in the capital markets. Adjusted EBITDA
margins should also gradually improve and drive a contraction in
pro forma debt leverage over the balance of 2024 closer to the sub
7.0x level.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Helios continues to realize
consistent revenue and EBITDA growth while adhering to a
conservative financial policy such that debt-to-EBITDA (Moody's
adjusted) is sustained below 4.5x (below 5x when expensing
capitalized software costs) and annual free cash flow/debt exceeds
10%.
The ratings could be downgraded if Helios were to experience a
weakening competitive position, revenue contracts and cash flow
generation weakens, or the company maintains aggressive financial
policies such that debt leverage is expected to be further
sustained above 6.5x (7.5x when expensing capitalized software
costs) and annual free cash flow/debt contracts to below 5%.
The principal methodology used in these ratings was Software
published in June 2022.
Helios and its parent company ION Corporate Solutions Finance
Limited ("ION"), both owned by ION Group, provide software and
services for treasury risk management, foreign exchange processing,
and energy and commodity trading risk management (E/CTRM)
applications.
HILCORP ENERGY: S&P Affirms 'BB+' ICR on Solid Cash Flow Generation
-------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' issuer credit rating on
U.S.-based privately held oil and gas exploration and production
company Hilcorp Energy I L.P. (HEI).
S&P said, "At the same time, we affirmed our 'BB+' issue-level and
'3' recovery rating on HEI's senior unsecured notes. The '3'
recovery rating indicates our expectation for meaningful (50%-70%;
rounded estimate: 65%) recovery in the event of a payment default.
"The stable outlook reflects our view that funds from operations
(FFO) to debt will be 35%-40% in 2024, improving to 45%-50% in
2025, driven by relatively supportive commodity prices and a
continued reduction in debt-like obligations."
The affirmation reflects HEI's solid cash flow and slightly
improving credit measures.
S&P said, "Despite continued weakness in natural gas prices, we
expect Hilcorp to generate solid FOCF this year. We expect
Hilcorp's production will average about 360,000-370,000 barrels of
oil equivalent (boe) per day with capital spending of about $1.1
billion-$1.2 billion. Overall, based on our current oil and natural
gas price deck assumptions, we expect FFO to debt of about 35%-40%
in 2024, increasing to about 45%-50% in 2025.
"While we expect lower distributions this year, HEI will make
sizable contingent earnout payments.
"Hilcorp expects to make a $440 million distribution (including
dividends and tax distributions) to its parent in 2024, down from
the $604 million in 2023. We anticipate distributions will increase
next year as Hilcorp makes progress repaying its contingent earnout
obligations. In connection with the acquisition of BP PLC's Alaska
operations in 2020, HEI assumed a contingent earnout obligation
with a maximum payout of $1.6 billion. Based on our current
estimates, we expect the company to pay about $570 million in
contingent earnouts this year."
Maintaining financial flexibility is integral for HEI as it
develops its reserve base and pursues strategic acquisitions.
S&P said, "Considering its appetite for debt-funded acquisitions in
the past, we believe Hilcorp will continue making further
acquisitions as the industry consolidates. While we expect leverage
to be above its target of 2x in the current price environment,
including the contingent earnout obligation, which we consider a
debt-like liability, we anticipate its leverage profile will
improve in 2025."
S&P expects the company to maintain adequate liquidity.
As of Dec. 31, 2023, HEI had approximately $860 million of
outstanding borrowings under its senior secured credit facility. It
repaid about $290 million during the first quarter of 2024, leading
to about $570 million drawn on its credit facility. S&P said, "We
expect Hilcorp to generate significant cash flow in 2024, which
will enable it to accelerate further repayment of its revolver
borrowings. We note HEI's liquidity profile is underpinned by
target minimum liquidity of approximately $800 million under the
credit facility."
The stable outlook on HEI reflects S&P's view that FFO to debt will
be about 35%-40% in 2024, improving to 45%-50% in 2025, driven by
relatively supportive commodity prices and a continued reduction in
debt-like obligations.
S&P could lower ratings if it expected Hilcorp's FFO to debt to
approach 30% on a sustained basis. This would most likely occur
if:
-- Commodity prices fell below our current assumptions and the
company did not reduce spending; or
-- HEI made a meaningfully larger-than-anticipated distribution to
its parent.
While unlikely over the next 1-2 years, S&P could raise the rating
if:
-- HEI improved its scale and diversification to match that of
higher-rated peers while bringing FFO to debt comfortably above 60%
for a sustained period, including at S&P's midcycle price deck
assumptions of $50 per barrel (bbl) of West Texas Intermediate
(WTI) crude oil and $2.75 per million Btu (mmBtu) of Henry Hub
natural gas; and
S&P expected the company to sustain committed and transparent
financial policies that support an investment-grade rating.
HUDBAY MINERALS: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) of Hudbay Minerals Inc. and Hudbay Peru S.A.C. at 'BB-'. The
Rating Outlook is Stable.
The ratings and Outlook reflect Hudbay Minerals Inc.'s mid-tier
size, concentration in three mines and extensive track record of
operating copper mines from exploration to production. The ratings
also consider Hudbay's low-cost position at Snow Lake in Manitoba,
Canada, and Constancia in Peru; current mine lives through 2038;
and Fitch's expectation that EBITDA leverage will be sustained
below 3.5x.
KEY RATING DRIVERS
Favorable Low-Cost Position: Fitch expects average annual payable
metal sold to be approximately 141,000 tonnes for copper and
268,000 ounces for gold over 2024-2025 and for the company to
retain its relative cost position. According to CRU Group, Snow
Lake has a first-quartile cost position and Constancia has a
second-quartile cost position of the global cost curve.
The mine plan for Constancia (Peru) supports an 18-year mine life,
Snow Lake (Canada) supports a 15-year mine life, Pampacancha (Peru)
supports a two-year mine life and Copper Mountain (Canada) supports
a 21-year mine life. Hudbay has an extensive track record of
operating copper mines from exploration to production, and has a
number of projects in the exploration and development phases.
Copper Mountain Incrementally Positive: Fitch believes the Copper
Mountain stabilization plan to improve mining and mill throughput
adds production and EBITDA but is unlikely to generate meaningful
FCF through 2025 given plans for discretionary stripping. Fitch
views the discretionary spending as fairly flexible and beneficial
in the medium-term. Fitch believes there is limited execution risk
in stabilizing operations given Hudbay's capital resources and
operational expertise.
Copper Exposure: Fitch believes Hudbay has meaningful commodity
diversification through its gold production, and to a lesser extent
its zinc production. However, the company has a longer-term focus
on copper, which accounted for 62% of consolidated revenues in
2023. Hudbay estimates that a 10% change in the price of copper
from the company's 2024 base case of $3.75/lb would change
operating cash flow before working capital by $107 million in
2024.
Hudbay's average realized copper price was $3.82/lb in 2023,
compared with $3.94/lb in 2022. Spot prices are approximately
$4.26/lb, which compares with Fitch's assumptions of $8,400/tonne
($3.81/lb) and $8,000/tonne (about $3.63/lb) in 2024 and 2025,
respectively.
Conservative Financial Policies: Fitch views Hudbay's conservative
capital-allocation policy as favorable to its credit profile.
Hudbay's stated financing strategy for sanctioning Copper World
includes a committed minority joint venture partner, a renegotiated
optimal streaming transaction, net debt/EBITDA of less than 1.2x,
minimum cash of $600 million, and limited (up to $500 million)
nonrecourse project debt. Hudbay prioritizes operational
improvements, low-risk and low capital requirement brownfield
expansions in advance of moving forward on large-scale greenfield
projects.
Hudbay's EBITDA leverage was 1.9x at Dec. 31, 2023, and Fitch
projects EBITDA net leverage will be sustained below 2.0x and FCF
to be positive through 2027 assuming copper prices of $8,000/tonne
and gold prices at $1,800/ounces after 2024. Under its ratings case
assumptions, which have copper prices moderating to $7,500/tonne
and gold prices moderating to $1,500/ounce, the capital budget can
be funded with no incremental debt and EBITDA leverage is less than
3.5x through 2027.
Copper World Potential: Fitch views the $1.3 billion phase 1
project favorably, given the 2023 pre-feasibility study indications
of 85,000 tonnes of annual copper production at sustaining cash
costs of USD1.81/lb over a 20-year mine life. Its rating case does
not include production or capital spending, except relatively
minimal capex to advance studies and permits, since the project is
not expected to be approved before 2025. Hudbay stated the project
would only move forward if the definitive feasibility study results
in an IRR of greater than 15% upon receipt of all state permits and
achievement of financial targets.
DERIVATION SUMMARY
Hudbay, with 2023 copper production at 131,691 tonnes, is
significantly smaller than copper producer First Quantum Minerals
Ltd. (B/Rating Watch Negative), with 2023 copper production of
707,678 tonnes. However, Hudbay is more than twice the size of Ero
Copper Corp. (B/Stable), with 2023 copper production at 43,857
tonnes, and Taseko Mines Limited's (B-/Stable) Gibraltar mine, with
2023 copper production at roughly 55,611 tonnes.
Hudbay's average second-quartile cost position of CRU's 2023 global
copper all-in sustaining cost curve is lower than First Quantum's
average cost position in the third quartile, Ero Copper's average
cost position in the fourth quartile and Taseko's average position
in the fourth quartile.
Hudbay's EBITDA leverage of 1.9x at YE 2023 is low for the rating
category and compares favorably with First Quantum's EBITDA
leverage of 3.8x, Ero Copper's EBITDA leverage of approximately
2.3x, and Taseko's EBITDA leverage at 3.5x.
KEY ASSUMPTIONS
- Average annual payable copper sold at about 135,000 tonnes and
average annual payable gold sold at about 235,000 oz.;
- Copper prices of $8,400/tonne in 2024, $8,000/tonne in 2025, and
USD7,500/tonne thereafter;
- Gold prices of $1,900/oz in 2024, $1,800/oz in 2025, $1,600/oz in
2026, and $1,500/oz thereafter;
- Zinc prices of $2,500/tonne in 2024, $2,400/tonne in 2025,
$2,300/tonne in 2026 and USD2,400/tonne in 2027;
- Average annual capex through 2027 of approximately $355 million;
- Significant Copper World capital spending is not included.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Reduced completion risk and funding strategy which mitigates risk
associated with the Copper World project;
- Improved size and scale;
- EBITDA leverage sustained below 2.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA leverage sustained above 3.5x;
- Sustained negative FCF before major development capital;
- A material reduction in average mine life.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: Cash on hand was $250 million as of Dec. 31, 2023,
and $324 million was available under the aggregate $450 million
revolving credit facilities after $100 million net utilization to
repay Copper Mountain Nordic bonds assumed upon acquisition and $26
million for LOC. The Hudbay Minerals revolver and the Hudbay Peru
S.A.C. revolver both mature on Oct. 26, 2025. Debt maturities are
modest before the $600 million 4.50% notes are due April 2026.
ISSUER PROFILE
Hudbay Minerals Inc. is an Americas based mid-sized mining company
producing copper with gold, silver and molybdenum by-products at
its Constancia operations (Peru), copper with gold and silver
by-products at its Copper Mountain operation (British Columbia,
Canada) and gold with copper, zinc and silver by-products at its
Snow Lake operations (Manitoba, Canada). Its development project
pipeline includes Copper World (AZ) and Mason (NV).
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Hudbay Peru S.A.C. LT IDR BB- Affirmed BB-
senior secured LT BB+ Affirmed RR2 BB+
Hudbay Minerals
Inc. LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR2 BB+
INNOVATE CORP: Announces Preliminary Results of Rights Offering
---------------------------------------------------------------
Innovate Corp. announced the preliminary results of its successful
rights offering, which expired at 5:00 p.m., New York City time, on
April 19, 2024. According to Computershare Trust Company, N.A., as
of the expiration date, 18.1 million basic subscription rights were
exercised to purchase an aggregate of 5.2 million shares of common
stock and 0.1 million additional shares of common stock were
subscribed for under the over-subscription privilege, subject to
proration.
Further, in accordance with the Investment Agreement entered into
by the Company with Lancer Capital LLC, an investment fund led by
Avram Glazer, the Chairman of the Board of Directors of the Company
and the Company's largest stockholder, Lancer Capital agreed to
partially backstop the rights offering in an amount not to exceed
$19.0 million by purchasing newly issued Series C Non-Voting
Convertible Participating Preferred Stock, par value $0.001 per
share. Based on the preliminary results, the Company expects that
15.3 thousand shares of preferred stock at a price of $1,000 per
share will be purchased under the backstop commitment. This
includes 6.3 thousand shares of preferred stock to be purchased at
the upcoming closing and 9.0 thousand shares already purchased as
part of an equity advance arrangement under the Investment
Agreement. On March 28, 2024, the Company issued and sold 25.0
thousand shares of the preferred stock to Lancer Capital for an
aggregate purchase price of $25.0 million under the equity advance.
The remaining 16.0 thousand shares of preferred stock purchased
under the equity advance are part of the previously announced
concurrent private placement. The preferred stock can be
convertible into common stock at the price equivalent to the
subscription price under the rights offering contingent on
shareholder approval, which will be voted on at the next annual
meeting.
The shares of common stock to be issued at the closing of the
rights offering will be purchased at the subscription price of
$0.70 per whole share.
The results of the rights offering are preliminary and subject to
change pending finalization of subscription procedures by the
subscription agent.
The Company will receive aggregate gross proceeds of approximately
$35.0 million from the rights offering and concurrent private
placement, and expects to use the proceeds for general corporate
purposes, including debt service and for working capital.
If a holder did not exercise its subscription rights prior to the
expiration date, such rights have expired and are void and have no
value. Investors who have participated in the rights offering
should expect to see the shares of common stock issued to them in
uncertificated book-entry form. Any excess subscription payments
received by subscription agent will be returned by the
subscription agent to investors, without interest or deduction,
through the same method by which they participated in the rights
offering.
The rights offering was made pursuant to INNOVATE's effective shelf
registration statement on Form S-3, filed with the SEC on Sept. 29,
2023, and declared effective on Oct. 6, 2023, and a prospectus
supplement containing the detailed terms of the rights offering
filed with the SEC on March 8, 2024, as amended by that certain
Amendment No. 1 to the prospectus supplement, filed with the SEC on
March 25, 2024, and further amended by that certain Amendment No. 2
to the prospectus supplement, filed with the SEC on April 9, 2024.
The preferred stock to be issued to Lancer Capital pursuant to the
backstop commitment and the concurrent private placement will not
be registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements.
About Innovate
New York-based Innovate Corp. -- www.innovatecorp.com -- is a
diversified holding company that has a portfolio of subsidiaries in
a variety of operating segments. The Company seeks to grow these
businesses so that they can generate long-term sustainable free
cash flow and attractive returns in order to maximize value for all
stakeholders. As of Dec. 31, 2023, its three operating platforms
or reportable segments, based on management's organization of the
enterprise, are Infrastructure, Life Sciences and Spectrum, plus
its Other segment, which includes businesses that do not meet the
separately reportable segment thresholds.
Innovate incurred a net loss of $38.9 million in 2023, compared to
a net loss of $42 million in 2022. As of Dec. 31, 2023, the Company
had $1.04 billion in total assets, $1.18 billion in total
liabilities, $15.4 million in total temporary equity, and a total
stockholders' deficit of $151.7 million.
Innovate disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on Feb. 26, 2024, it received a written
notice from the New York Stock Exchange that it was not in
compliance with the continued listing standard set forth in Section
802.01C of the NYSE's Listed Company Manual, as the average closing
price of the Company's common stock was less than $1.00 per share
over a consecutive 30 trading-day period.
* * *
As reported by the TCR on May 17, 2023, S&P Global Ratings lowered
its issuer credit rating on Innovate Corp. to 'CCC+' from 'B-'.
S&P said, "We expect Innovate to maintain less than adequate
liquidity over the next 12 months. This reflects our expectation
that while the company has enough liquidity to continue operating
for the next 12 months, we believe the cushion is very thin and
could quickly erode."
INNOVATE CORP: Closes Rights Offering
-------------------------------------
Innovate Corp. announced the closing of its successful rights
offering, which expired at 5:00 p.m., New York City time, on April
19, 2024. Pursuant to the terms of the rights offering, 5.2
million shares of common stock are being purchased pursuant to the
exercise of basic subscription rights and 0.1 million additional
shares of common stock are being purchased under the
over-subscription privilege.
In accordance with the Investment Agreement entered into by the
Company with Lancer Capital LLC, an investment fund led by Avram
Glazer, the Chairman of the Board of Directors of the Company and
the Company's largest stockholder, Lancer Capital partially
backstopped the rights offering in the amount of $15.3 million by
purchasing Series C Non-Voting Convertible Participating Preferred
Stock, par value $0.001 per share. In total, 15.3 thousand shares
of preferred stock at a price of $1,000 per share were issued to
Lancer Capital. This includes the approximately 6.3 thousand
shares of preferred stock issued in connection with the closing of
the rights offering and the 9.0 thousand shares already purchased
as part of an equity advance arrangement under the Investment
Agreement. On March 28, 2024, the Company issued and sold 25.0
thousand shares of the preferred stock to Lancer Capital for an
aggregate purchase price of $25.0 million under the equity advance.
The remaining 16.0 thousand shares of preferred stock purchased
under the equity advance are part of the previously announced
concurrent private placement. The preferred stock can be
convertible into common stock at the price equivalent to the
subscription price under the rights offering contingent on
shareholder approval, which will be voted on at the next annual
meeting.
In the aggregate, the Company is issuing 5.3 million new shares of
common stock at the subscription price of $0.70 per whole share for
gross proceeds of $3.7 million to the Company, in addition to 31.3
thousand shares of preferred stock to Lancer Capital for gross
proceeds of $31.3 million to the Company. After giving effect to
the rights offering, the Company will have 85.2 million shares of
common stock issued and outstanding. If approved at the annual
meeting, the conversion of the 31.3 thousand shares of preferred
stock purchased by Lancer Capital would result in the issuance of
an additional 44.7 million shares of common stock.
The Company expects to use the proceeds from the rights offering
for general corporate purposes, including debt service and for
working capital.
Investors who have participated in the rights offering should
expect to see the shares of common stock issued to them in
uncertificated book-entry form. Any excess subscription payments
received by Computershare Trust Company, N.A. will be returned by
the subscription agent to investors, without interest or deduction,
through the same method by which they participated in the rights
offering.
The rights offering was made pursuant to INNOVATE's effective shelf
registration statement on Form S-3, filed with the SEC on September
29, 2023 and declared effective on Oct. 6, 2023, and a prospectus
supplement containing the detailed terms of the rights offering
filed with the SEC on March 8, 2024, as amended by that certain
Amendment No. 1 to the prospectus supplement, filed with the SEC on
March 25, 2024, and further amended by that certain Amendment No. 2
to the prospectus supplement, filed with the SEC on April 9, 2024.
About Innovate
New York-based Innovate Corp. -- www.innovatecorp.com -- is a
diversified holding company that has a portfolio of subsidiaries in
a variety of operating segments. The Company seeks to grow these
businesses so that they can generate long-term sustainable free
cash flow and attractive returns in order to maximize value for all
stakeholders. As of Dec. 31, 2023, its three operating platforms
or reportable segments, based on management's organization of the
enterprise, are Infrastructure, Life Sciences and Spectrum, plus
its Other segment, which includes businesses that do not meet the
separately reportable segment thresholds.
Innovate incurred a net loss of $38.9 million in 2023, compared to
a net loss of $42 million in 2022. As of Dec. 31, 2023, the Company
had $1.04 billion in total assets, $1.18 billion in total
liabilities, $15.4 million in total temporary equity, and a total
stockholders' deficit of $151.7 million.
Innovate disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on Feb. 26, 2024, it received a written
notice from the New York Stock Exchange that it was not in
compliance with the continued listing standard set forth in Section
802.01C of the NYSE's Listed Company Manual, as the average closing
price of the Company's common stock was less than $1.00 per share
over a consecutive 30 trading-day period.
* * *
As reported by the TCR on May 17, 2023, S&P Global Ratings lowered
its issuer credit rating on Innovate Corp. to 'CCC+' from 'B-'. S&P
said, "We expect Innovate to maintain less than adequate liquidity
over the next 12 months. This reflects our expectation that while
the company has enough liquidity to continue operating for the next
12 months, we believe the cushion is very thin and could quickly
erode."
INNOVATIVE DENTAL: Wins Cash Collateral Access on Final Basis
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Missouri,
Northern Division, authorized Innovative Dental of Hannibal, LLC to
use cash collateral, on a final basis, in accordance with the
budget.
The Debtor requires the use of cash collateral to meet its payroll
and otherwise pay its continuing obligations incurred in the
ordinary course of its business.
First Savings Bank asserts that prior to the Petition Date FSB and
the Debtor entered into those loan documents pursuant to which FSB
has an interest in the Debtor's cash collateral.
Newtek Small Business Finance, LLC asserts that prior to the
Petition Date, Newtek and Borrower entered into the loan documents
under which Newtek is alleged to have an interest in the Debtor's
cash collateral.
Cadence Bank asserts that prior to the Petition Date, Cadence and
Borrower entered into the loan documents under which Cadence is
alleged to have an interest in the Debtor's cash collateral.
In order to adequately protect the security interest of FSB,
Newtek, and Cadence pursuant to 11 U.S.C. Section 361(2), FSB,
Newtek, and Cadence are granted a replacement, automatically
perfected security interest and lien in an amount equal to the cash
collateral used by the Debtor in all of the Debtor's assets. The
Replacement Liens will have the same validity, enforceability and
priority as their pre-petition liens and security interests.
A copy of the order is available at https://urlcurt.com/u?l=9ADAKO
from PacerMonitor.com.
About Innovative Dental of Hannibal, LLC
Innovative Dental of Hannibal, LLC is a provider of comprehensive
dental care. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Mo. Case No. 24-20011) on January
30, 2024. In the petition signed by Charles W. Janes,
member/manager, the Debtor disclosed $1,037,174 in assets and
$6,049,362 in liabilities.
Judge Kathy A Surratt-States oversees the case.
John M. Hark, Esq., at Curl, Hark & Holliday, represents the Debtor
as legal counsel.
INTRUSION INC: Raises $2.6 Million in Private Offering
------------------------------------------------------
Intrusion Inc. announced it had entered into a private placement
subscription agreement pursuant to which the Company sold to
purchasers in a Private Offering an aggregate of 1,348,569 shares
of its common stock, each of which is coupled with a warrant to
purchase two shares of common stock at an aggregate offering price
of $1.95 per share. None of the shares of common stock or shares
underlying the warrants have been registered for resale under the
Securities Act of 1933 as amended.
The Offering resulted in net proceeds to Intrusion of $2.6 million.
The Company intends to use the net proceeds from the Offering for
working capital and general corporate purposes.
"This Offering was the final step in our plan to achieve compliance
with the Nasdaq minimum equity standard pursuant to listing rule
5550(b)(1)," said Tony Scott, CEO of Intrusion. "We are pleased to
have the continued support of our long-term shareholders. The
Offering also marks an important step for Intrusion as we continue
to focus on ensuring we have the funds we need to propel our growth
and focus on satisfying our customers' needs with cost-effective
cybersecurity solutions for their enterprise."
About Intrusion Inc.
Intrusion Inc. is a cybersecurity company based in Plano, Texas.
The Company offers its customers access to its exclusive threat
intelligence database containing the historical data, known
associations, and reputational behavior of over 8.5 billion IP
addresses. After years of gathering global internet intelligence
and working exclusively with government entities, the Company
released its first commercial product in 2021. Intrusion Shield is
designed to allow businesses to incorporate a Zero Trust,
reputation-based security solution into their existing
infrastructure. Intrusion Shield observes traffic flow and
instantly blocks known malicious or unknown connections from both
entering or exiting a network to help protect against Zero-Day and
ransomware attacks. Incorporating Intrusion Shield into a network
can elevate an organization's overall security posture by enhancing
the performance and decision-making of other solutions in its
cybersecurity architecture.
Dallas, Texas-based Whitley Penn LLP, the Company's auditor since
2009, issued a "going concern" qualification in its report dated
April 1, 2024, citing that the Company has suffered recurring
losses from operations, negative cash flows from operations, and
has a net working capital deficiency that raise substantial doubt
about its ability to continue as a going concern.
INVITAE CORP: Labcorp Emerges as Winning Bidder in 363 Sale
-----------------------------------------------------------
Invitae, a medical genetics company, on April 24 said Labcorp, a
global leader of innovative and comprehensive laboratory services,
has been selected as the winning bidder in the Company's auction in
its sale process under Section 363 of the U.S. Bankruptcy Code.
Labcorp will acquire substantially all of the Company's assets on a
going concern basis for $239 million in cash consideration, plus
other non-cash consideration.
"The agreement with Labcorp marks a significant step in our
financial restructuring and supports our efforts to continue to
deliver innovative and industry leading products and services for
healthcare," said Ken Knight, president and chief executive officer
of Invitae.
The hearing to approve the sale is currently scheduled for May 6,
2024. With Court approval, as well as customary regulatory
approvals and closing conditions, Labcorp and Invitae anticipate
completing the sale process in the third quarter of 2024.
About Invitae Corp.
Invitae Corporation (OTC:NVTA) is a medical genetics company that
is in the business of delivering genetic testing services, digital
health solutions, and health data services that support a lifetime
of patient care and improved outcomes.
Invitae Corp. and five of its affiliates sought relief under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Lead Case No.
24-11362) on Feb. 13, 2024. In the petition filed by Ana Schrank,
chief financial officer, disclosed $535,115,000 in assets against
$1,618,519,000 in debt.
Judge Michael B. Kaplan oversees the case.
Kirkland & Ellis LLP and Kirkland & Ellis International LLP are the
Debtors' bankruptcy counsel and Cole Schotz, P.C. is the Debtors'
co-bankruptcy counsel. Moelis & Company LLC is the Debtors'
investment banker. FTI Consulting Inc is the Debtors' serves as
financial and communications advisor. Kurtzman Carson Consultants
LLC is the Debtors' notice and claims agent. Deloitte Touche
Tohmatsu Limited serves as the Debtors' tax advisor.
JD MOTORSPORTS: Hires Penn Law Firm LLC as Counsel
--------------------------------------------------
JD Motorsports, Inc. seeks approval from the U.S. Bankruptcy Court
for the District of South Carolina to employ Penn Law Firm, LLC as
counsel.
The firm will provide these services:
(a) advise the Debtor of its rights, powers, and duties;
(b) attend meetings with Debtor and hearings before the
court;
(c) assist other professionals retained by the Debtor in the
investigation of the acts, conduct, assets, liabilities, and
financial condition of the Debtor, and any other matters relevant
to the case or to the formulation of a plan of reorganization or
liquidation;
(d) investigate the validity, extent, and priority of secured
claims against the Debtor's estate, and investigate the acts and
conduct of such secured creditors and other parties to determine
whether any causes of action may exist;
(e) advise the Debtor with regard to the preparation and
filing of all necessary and appropriate legal documents, and review
all financial and other reports to be filed in these matters;
(f) advise the Debtor with regard to the preparation and
filing of responses to applications, motions, pleadings, notices,
and other papers that may be filed and served in these Chapter 11
cases by other parties; and
(g) perform other necessary legal services for and on behalf
of the Debtor that may be necessary or appropriate in the
administration of these Chapter 11 cases.
The firm will be paid at these rates:
Attorneys $250 to $400 per hour
Bankruptcy Paralegals and Assistants $100 to $175 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
Pre-petition, the firm received retainers aggregating $10,000 from
the Debtor.
W. Harrison Penn, Esq., a member at Penn Law Firm, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
W. Harrison Penn, Esq.
Penn Law Firm, LLC
1517 Laurel Street
Columbia, SC 29201
Tel: (803) 771-8836
Email: hpenn@pennlawsc.com
About JD Motorsports, Inc.
JD Motorsports, Inc. is a professional racing team that is now the
number 1 non-NASCAR Cup Series Affiliated team in the NASCAR
Xfinity Series. The Debtor earned its first playoffs birth in 2018,
finishing tenth in the NASCAR Xfinity Series standings. The Debtor
has had a driver finish in the top-20 of the Xfinity Series Driver
points twenty times. The Debtor operates from its garage located at
1210 Champion Ferry Road, Gaffney, South Carolina.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. S.D. Case No. 24-01274-hb) on April 8,
2024. In the petition signed by Johnny K. Davis. president, the
Debtor disclosed up to $1 million in assets and up to $10 million
in liabilities.
W. Harrison Penn, Esq., at Penn Law Firm LLC, represents the Debtor
as legal counsel.
KARBONX CORP: Reports $471,271 Net Loss in Third Quarter
--------------------------------------------------------
Karbon-X Corp. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q reporting a net loss of $471,271
on $247,222 of total revenue for the three months ended February
29, 2024, compared to a net loss of $371,789 on $7,823 of revenue
for the three months ended February 28, 2023.
For the nine months ended February 29, 2024, the Company reported a
net loss of $2.16 million on total revenue of $287,062, compared to
a net loss of $646,034 on total revenue of $7,823 for the nine
months ended February 28, 2023.
As of February 29, 2024, the Company had $1.18 million in total
assets, $405,055 in total liabilities, and a total stockholders'
equity of $772,096.
A full-text copy of the Company's Form 10-Q is available at
https://tinyurl.com/3rk9spnk
About Karbon-X
Calgary, Canada-based Karbon-X Corp. provides customized
transactional options, tailored insights, and scalable access to
the Verified Emissions Reduction markets.
Karbon-X disclosed in its Quarterly Report for the quarterly period
ended November 30, 2023, that the Company has generated minimal
revenues from its business operations and has incurred operating
losses since inception of $3,896,931. The Company will require
additional funding to meet its ongoing obligations and to fund
anticipated operating losses. The ability of the Company to
continue as a going concern is dependent on raising capital to fund
its initial business plan and ultimately to attain profitable
operations. Accordingly, these factors raise substantial doubt as
to the Company's ability to continue as a going concern. The
Company intends to continue to fund its business by way of private
placements and advances from related parties as may be required.
KULR TECHNOLOGY: Delivers Cell Battery for Ukraine Drone Missions
-----------------------------------------------------------------
KULR Technology Group, Inc. announced it has delivered on an
immediate basis, a power cell battery deployment order for
AI-enabled drone and advanced air mobility missions in Ukraine.
The Ukrainian contractor will employ the Company's high-power
battery cells to sustain its ongoing drone operations in Eastern
Europe. This initial deployment order necessitated immediate
delivery, with full pre-payment before shipment. Further details
on the transaction are being withheld due to the sensitive nature
of the project.
The Company said the conflict in Ukraine has highlighted the
strategic superiority of drones, which have evolved to be more
compact, user-friendly, and accessible to a wide range of
operators. Drones significantly reduce the gap between target
identification and elimination, thereby enhancing a military's
capability to push forward its frontline. Equipped with a longer
battery life and faster charge times, drones can perform extensive
reconnaissance missions for hours, facilitating subsequent
precision strikes by more sophisticated models within targeted
areas. Additionally, certain drone variants empower individual
soldiers to surveil movements without jeopardizing lives or
disclosing their own positions. Ukraine's drone developers look to
integrate AI solutions into their designs where an algorithm
quickly learns to recognize a drone's target. That way, if the
electronic jamming gets too intense or the drone loses its command
signal, AI can take over control from the human operator and steer
the drone to a successful mission.
Just this past weekend the United States House of Representatives,
with broad bipartisan support, passed a $61 billion legislative
package aiding Ukraine.
According to Fortune Business Insights, the global military drone
market is expected to grow from $14.14 billion in 2023 to $35.60
billion by 2030, at a CAGR of 14.10% during the forecast period.
About KULR Technology Group Inc.
KULR Technology Group Inc. (NYSE American: KULR) is an energy
management platform company offering proven solutions that play a
critical role in accelerating the electrification of the circular
economy. Leveraging a foundation in developing, manufacturing, and
licensing next-generation carbon fiber thermal management
technologies for batteries and electronic systems, KULR has evolved
its holistic suite of products and services to enable its customers
across disciplines to operate with efficiency and sustainability in
mind. For more information, please visit www.kulrtechnology.com.
Los Angeles, CA-based Marcum LLP the Company's auditor since 2018,
issued a "going concern" qualification in its report dated April
12, 2024, citing that the Company has a working capital deficit,
has incurred losses from operations, and needs to raise additional
funds to meet its obligations and sustain its operations. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
LAG SHOT: Unsecureds to Get 18.95 Cents on Dollar in Plan
---------------------------------------------------------
Lag Shot LLC, filed with the U.S. Bankruptcy Court for the Middle
District of Florida a Plan of Reorganization under Subchapter V
dated April 15, 2024.
The Debtor sells proprietary golf swing training clubs which
feature a flexible shaft that, by its design, guides golfers into a
smooth and proper swing.
The Debtor is a Florida profit corporation, founded in 2014, which
has maintained its principal place of business in Naples, Florida
for more than 180 days. The Debtor's owner is Mr. Gary G.
Guerrero.
The Debtor was expanding into nationally prominent brick and mortar
sporting goods stores, which required the Debtor to pay for the
manufacture of its own products prior to sale. Unable to obtain
traditional financing for these efforts, the Debtor turned to
lenders offering merchant cash advances. On or around Thanksgiving,
the day before the Debtor anticipated its best sales of the year, a
lender demanded that retailers freeze the Debtor's accounts
receivable. The Debtor's repeated efforts to unfreeze its accounts
failed.
To fund its repayment obligations under the Plan, the Debtor will
use its Projected Disposable Income ("PDI") that is set forth in
the Financial Projections during the 5-year plan period beginning
on the date that the first payment is due under this Plan (the
"Relevant Income Period"). This Plan accounts for financial
uncertainty and declining demand in the event of circumstances
outside the Debtor's control. The Financial Projections show that,
as of the Effective Date, all of the PDI for the Relevant Income
Period will be applied to make payments under this Plan.
During the Relevant Income Period, this Plan proposes to pay
creditors of the Debtor from the Debtor's revenue to promote the
continuation, preservation, or operation of the business of the
Debtor.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 18.95 cents on the dollar. This Plan also provides
for the payment of administrative, priority, and secured claims.
Class 5 consists of General Unsecured Claims. Beginning not later
than 90 days after the Effective Date, and continuing every three
calendar months thereafter, the Class shall receive a pro rata
monthly distribution collectively totaling the Debtor's PDI for the
three calendar months immediately preceding such payment, after
payment of administrative expense claims and priority tax claims.
This Class shall be paid until their allowed claims are paid in
full, or 30 days after the Relevant Income Period expires,
whichever is earlier.
The Debtor's PDI for the Relevant Income period totals $122,540.26.
This Class is impaired by this Plan, and is entitled to vote on
this Plan.
Class 6 consists of Equity Security Holders. Mr. Guerrero is the
sole Equity Security Holder. Equity Security Holders shall retain
their interest in the Debtor. Other than the compensation requested
in the Debtor's Motion for Authority to Pay Affiliate Officer
Salary ("Affiliate Salary Motion"), no compensation shall be made
by the Debtor to the Equity Security Holder until the earlier of:
(i) the end of the life of this Plan; or (ii) such time as all
allowed Class 5 claims are paid in full.
Payments required under this Plan will be funded from revenues
generated by the Debtor's continued operations.
A full-text copy of the Plan of Reorganization dated April 15, 2024
is available at https://urlcurt.com/u?l=UFG4MV from
PacerMonitor.com at no charge.
Counsel for the Debtor:
DAL LAGO LAW
Michael R. Dal Lago, Esq.
Christian Garrett Haman, Esq.
Jennifer M. Duffy, Esq.
999 Vanderbilt Beach Road
Suite 200
Naples, FL 34108
Telephone: (239) 571-6877
Email: mike@dallagolaw.com
chaman@dallagolaw.com
jduffy@dallagolaw.com
About Lag Shot
Lag Shot, LLC sells proprietary golf swing training clubs which
feature a flexible shaft that, by its design, guides golfers into a
smooth and proper swing.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00034) on Jan. 9,
2024, with $500,001 to $1 million in assets and $500,001 to $1
million in liabilities.
Judge Caryl E. Delano oversees the case.
Michael R. Dal Lago, Esq., represents the Debtor as legal counsel.
LAVERTU CAPITAL: Aaron Cohen Named Subchapter V Trustee
-------------------------------------------------------
The U.S. Trustee for Region 21 appointed Aaron Cohen, Esq., a
practicing attorney in Jacksonville, Fla., as Subchapter V trustee
for Lavertu Capital Holdings, LLC.
Mr. Cohen will be paid an hourly fee of $300 for his services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Mr. Cohen declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Aaron R. Cohen, Esq.
P.O. Box 4218
Jacksonville, FL 32201
Tel: (904) 389-7277
Email: aaron@arcohenlaw.com
About Lavertu Capital Holdings
Founded in 2006, Lavertu Capital Holdings LLC, doing business as A1
Stoneworld, started as a countertop fabricator in Green Cove
Springs, FL. The Company offers a wide range of products including
granite, marble, quartz, quartzite, and soapstone from some of the
most respected brands. The products the Company offers come from
quarries around the world in locations such as Brazil, Spain,
Italy, and India.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-01043) on April 13,
2024, with $288,699 in assets and $4,272,277 in liabilities.
Kenneth Lavertu, Jr., owner and chief executive officer, signed the
petition.
Judge Jason A. Burgess presides over the case.
Jeffrey S. Ainsworth, Esq. at Bransonlaw, PLLC represents the
Debtor as bankruptcy counsel.
LUXURY FLUSH: Seeks to Hire Lucove Say & Co. as Accountant
----------------------------------------------------------
Luxury Flush d/b/a All In Sanitation and d/b/a All In Sanitation
Services seeks approval from the U.S. Bankruptcy Court for the
Central District of California to employ Lucove, Say & Co. as
accountant.
The firm will provide these services:
a. review the Debtor's financial status and to determine those
accounting and financial changes which are appropriate and
necessary;
b. assist the Debtor in determining whether post-petition DIP
financing is appropriate and if so to assist Applicant to obtain
said financing;
c. review the Debtor's financial records and assist counsel in
determining what avoidance actions, if any, should be brought
against insiders and others for the benefit of the estate;
d. prepare tax returns, to handle audits and to take steps
necessary to reduce the estate's liabilities; and
e. render other accountancy services for the Debtor for which
services of an accountant may be necessary during the pendency of
this case.
The firm will be paid at these rates:
Richard Say $300 per hour
Cameron Say $175 per hour
The firm received from the Debtor a retainer of $5,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
As disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
The firm can be reached through:
Richard Say, CPA
Lucove, Say & Co.
23901 Calabasas Road, Suite 2085
Calabasas, CA 91302
Tel: (818) 224-4411
Fax: (818) 225-7054
Email: RSay@Lucovesay.com
About Luxury Flush
Luxury Flush, LLC provides a variety of luxury porta potty restroom
rentals, perfect for weddings, corporate events, home remodels,
production and film, construction, and more.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-10426) on March 18,
2024. In the petition signed by Natalie Downey, managing member,
the Debtor disclosed $5,939,856 in assets and $3,097,630 in
liabilities.
Judge Martin R Barash oversees the case.
Steven R. Fox, Esq., at THE FOX LAW CORPORATION INC., represents
the Debtor as legal counsel.
MARIADB PLC: K1 Announces Terms of Recommended $39.5M Cash Offer
----------------------------------------------------------------
K1 Investment Management, LLC, on April 24 announced the terms of a
recommended cash offer to be made by Meridian Bidco LLC, a newly
formed affiliate of K1, as manager of K5 Private Investors, L.P.,
to acquire the entire issued and to be issued share capital of
MariaDB plc.
Summary
Under the terms of the Offer, MariaDB Shareholders will be entitled
to receive for each MariaDB Share $0.55 in cash. The Cash Offer
values the entire issued share capital of MariaDB (on a fully
diluted basis) at approximately $39.5 million.
The Cash Consideration represents a premium of approximately:
* 189% to MariaDB's closing share price of $0.19 on February 5,
2024 (being the last full trading day prior to the announcement by
MariaDB of a forbearance agreement with RP Ventures LLC);
* 57% to MariaDB's closing share price of $0.35 on February 15,
2024 (being the last date prior to the publication of K1's Possible
Offer Announcement);
* 129% to MariaDB's average closing share price of $0.24 over
the 30-trading day period ending February 15, 2024; and
* 90% to MariaDB's average closing share price of $0.29 over the
60-trading day period ending February 15, 2024.
As an alternative to the Cash Offer, Eligible MariaDB Shareholders
may elect, in respect of all (but not some) of their MariaDB
Shares, to receive, in lieu of the Cash Offer to which they are
otherwise entitled, one unlisted, unregistered non-voting Class B
unit of Meridian Topco LLC -- a limited liability company formed in
Delaware, an Affiliate of K1 and parent of Bidco; each, a "Topco
Rollover Unit" -- for each MariaDB Share -- Unlisted Unit
Alternative -- with the Topco Rollover Units to be issued on the
terms and pursuant to the mechanism described. In aggregate, the
maximum number of Topco Rollover Units available to be issued to
Eligible MariaDB Shareholders under the Unlisted Unit Alternative
is limited to 15% of Topco's fully diluted share capital -- after
issuance of all Topco Rollover Units to all Electing Shareholders.
The Topco Rollover Units will not be listed or registered under US
securities laws, will not be transferable, subject to certain
limited exceptions, will be non-voting -- other than those
non-waivable voting rights, if any, required pursuant to applicable
Delaware law -- will have limited information rights -- except for
certain limited information to be provided to holders of the Topco
Rollover Units to be more fully described in the Offer Document and
certain other financial information regarding Topco as the holders
of Topco Rollover Units may reasonably request in writing from time
to time (but no more frequently than annually) -- and may be
subject to dilution pursuant to any further issue of securities by
Topco. For the purposes of Rule 24.11 of the Irish Takeover Rules,
an appropriate advisor will provide an estimate of the value of a
Topco Rollover Unit, together with the assumptions, qualifications
and caveats forming the basis of its estimate of value, in a letter
to be included in the Offer Document.
If the aggregate number of Topco Rollover Units to be issued to all
Electing Shareholders exceeds the Rollover Threshold then each
Electing Shareholder's number of Topco Rollover Units to which they
would otherwise have been entitled will be reduced on a pro-rated
basis -- based on the relative holdings of MariaDB Shares as of
immediately prior to the Initial Closing Date (as defined in
Appendix I of this Announcement) of all of the Electing
Shareholders -- and the consideration for each MariaDB Share that
is not exchanged for Topco Rollover Units will be paid in cash in
accordance with the terms of the Cash Offer.
Bidco may in its sole discretion, withdraw the Unlisted Unit
Alternative if there are any Electing Shareholders whose election
to receive the Unlisted Unit Alternative will require registration
of the Topco Rollover Units under US securities law, and there is
not an applicable exemption for each such Electing Shareholder --
Rollover Withdrawal Right. In the event Bidco exercises its
Rollover Withdrawal Right, the Unlisted Unit Alternative will
lapse, no Topco Rollover Units will be issued and the consideration
payable in respect of each tendered MariaDB Share will be settled
in cash in accordance with the terms of the Cash Offer. The Offer
will be open for at least 10 business days after the announcement
of Bidco's exercise of its Rollover Withdrawal Right. For the
avoidance of doubt, the exercise by Bidco of the Rollover
Withdrawal Right shall not otherwise affect any validly received
tenders, nor shall it constitute a variation of the Offer.
Unless otherwise determined by Bidco or K1 or required by the Irish
Takeover Rules, and permitted by applicable law and regulation, the
Unlisted Unit Alternative is not being offered, sold or delivered,
directly or indirectly, in or into any Restricted Jurisdiction --
and so MariaDB Shareholders in such jurisdictions will not be
eligible to elect to receive the Unlisted Unit Alternative.
In addition, MariaDB Shareholders who wish to elect for the
Unlisted Unit Alternative will be required to provide certain "Know
Your Client" information as requested by Topco and K1. Further
details regarding this eligibility requirement will be set out in
the Offer Document. Failure to provide the required information
will result in elections to receive the Unlisted Unit Alternative
being invalid and Eligible MariaDB Shareholders who made such an
invalid election will instead receive the Cash Consideration for
the number of MariaDB Shares in respect of which they purported to
make an election to receive the Unlisted Unit Alternative.
If any dividend or other distribution is authorized, declared, made
or paid in respect of MariaDB Shares on or after the date of this
Announcement, K1 and Bidco reserve the right to reduce the
consideration due pursuant to the Cash Offer (and, as the case may
be, the consideration due under the Unlisted Unit Alternative) by
the aggregate amount of such dividend or other distribution or
return of value. In such circumstances, MariaDB Shareholders shall
be entitled to retain any such dividend, distribution, or other
return of value authorized, declared, made or paid.
Commenting on the Offer, Sujit Banerjee, Managing Director of K1
Operations, LLC, said: "We are pleased about the progress MariaDB
has made and the innovative solutions they bring to the market.
Partnering with MariaDB presents an attractive opportunity to drive
further growth and innovation in the database management space."
Recommendation -- Cash Offer
The MariaDB Board has, as required under the Irish Takeover Rules,
due to conflicts of interest, recused itself from taking part in
the formulation and communication of advice on the Offer to MariaDB
Shareholders. Instead, IBI Corporate Finance, which has been
appointed as independent financial advisor to MariaDB under Rule 3
of the Irish Takeover Rules, has, in that capacity, taken
responsibility for considering the Offer and formulating an
appropriate recommendation to be made to MariaDB Shareholders.
It is, in the context of the background to and reasons for
recommending the Cash Offer, which are set out in paragraph 5 of
the main body of this Announcement that IBI Corporate Finance has
concluded that the terms of the Cash Offer are fair and reasonable
and it would recommend that MariaDB Shareholders should accept the
Cash Offer. Further detail will be included in the Offer Document
or in a separate circular to be sent to MariaDB Shareholders by
MariaDB.
No Recommendation -- Unlisted Unit Alternative
IBI Corporate Finance is unable to advise as to whether or not the
financial terms of the Unlisted Unit Alternative are fair and
reasonable. This is because IBI Corporate Finance has not had any
involvement in the development and validation of any financial
projections for Topco. As a result, IBI Corporate Finance is unable
to assess any plans Topco may have for the development of MariaDB
or the Topco Group to the degree necessary to form an assessment of
the value of the Unlisted Unit Alternative. IBI Corporate Finance
also note the significant and variable impact that the
disadvantages and advantages of the Unlisted Unit Alternative
(certain of which are outlined below and in paragraph 16 of the
main body of this Announcement) may have for individual Eligible
MariaDB Shareholders. In terms of the advantages, these include, in
particular, the ability to participate in potential future value
creation of the MariaDB Group. In terms of the disadvantages, these
include, in particular, (a) the level of uncertainty as to the
future value of Topco Rollover Units, which will depend on the
performance of the MariaDB Group over a number of years and which
performance will be impacted by, amongst other things, the business
plan and strategy of the business under Topco's control; and (b)
the terms of the Topco Rollover Units including the fact that they
will be illiquid and non-transferable, will be subject to potential
dilution in the event that additional securities are issued by
Topco, will not carry voting rights, and will have limited
information rights -- except for certain limited information to be
provided to holders of the Topco Rollover Units to be more fully
described in the Offer Document and certain other financial
information regarding Topco as the holders of Topco Rollover Units
may reasonably request in writing from time to time (but no more
frequently than annually).
Accordingly, IBI Corporate Finance is unable to form an opinion as
to whether or not the terms of the Unlisted Unit Alternative are
fair and reasonable and is not making any recommendation to
Eligible MariaDB Shareholders as to whether or not they should
elect to receive the Unlisted Unit Alternative.
In addition, the attention of Eligible MariaDB Shareholders who may
be considering electing to receive the Unlisted Unit Alternative is
drawn to certain risk factors and other investment considerations
relevant to such an election. These will be set out in full in the
Offer Document and include, inter alia, the following:
Disadvantages of electing to receive the Unlisted Unit
Alternative:
(a) upon the Effective Date, Topco will be solely controlled
by K5, who will exercise all decision-making powers relating to
Topco and its Subsidiaries (including all members of the MariaDB
Group) and the businesses thereof. Holders of the Topco Rollover
Units, which will not carry any voting rights (other than those
non-waivable voting rights, if any, required pursuant to applicable
Delaware law) or rights to appoint (or vote for the appointment of)
directors, officers or other control persons of Topco, will
therefore have no influence over decisions made by Topco in
relation to its investment in MariaDB or in any other business;
(b) the Topco Rollover Units will be unquoted and will not be
listed or admitted to trading on any exchange or market for the
trading of securities, and will therefore be illiquid. In addition,
the Topco Rollover Units will not be registered under US securities
laws;
(c) the Topco Rollover Units will be non-transferable, other
than with the prior written consent of K5 (and then only in K5's
sole and absolute discretion). The future monetization of the Topco
Rollover Units therefore remains entirely in the discretion of K5,
subject to a customary "tag-along" right for Topco Rollover Units
to be more fully described in the Offer Document;
(d) the value of the Topco Rollover Units will at all times be
uncertain and there can be no assurance that any such securities
will be capable of being sold in the future or that they will be
capable of being sold at the value to be estimated by an
appropriate advisor in the Offer Document;
(e) the Topco Rollover Units will be subject to a customary
"drag-along" right. As a result, given its sole control over Topco
(as described in paragraph (a), above), K5 will have sole and
absolute discretion to "drag" the holders of Topco Rollover Units,
at any time, into a future sale or change of control transaction
involving Topco or any of its Subsidiaries (including MariaDB) and
require such holders to sell or transfer their Topco Rollover
Units, and K5 will therefore control the future monetization of the
Topco Rollover Units;
(f) K5 will control the timing of distributions, dividends and
payments of capital proceeds (in each case, if any) to the holders
of Topco Rollover Units. There is no guarantee that Topco will make
any such distributions, dividends or payments of capital proceeds
at any time ((however, Topco Rollover Units will rank pari passu
with Class A Topco Units in respect of any such distributions,
dividends or payments of capital proceeds that are made);
(g) Topco Rollover Units will carry no pre-emption rights and
any participation by the holders of Topco Rollover Units in future
issues of securities by the Topco Group will be at the discretion
of K5 and also be subject to other important exceptions and risk.
For example: (i) holders of Topco Rollover Units will not be
entitled to participate in any issues of securities to actual or
potential employees, directors, officers or consultants of the
Topco Group (whether of the same or different classes to the Topco
Rollover Units); (ii) if Topco introduces one or more management
incentive plans for actual or potential employees, directors,
officers and consultants of the Topco Group after the Effective
Date that provide participants with an interest in securities in
the Topco Group, such issue(s) could potentially significantly
dilute the equity interests in Topco of the holders of Topco
Rollover Units. In addition, the Topco Group may not receive
material cash sums on the issue of any such securities and the
returns on any such securities may potentially be structured to
increase their proportionate interest in the value of the Topco
Group as it increases in value (whether pursuant to a ratchet
mechanism or otherwise); and (iii) the holders of Topco Rollover
Units will have no legal entitlement to participate in issues of
securities by the Topco Group in any case, including in
consideration for, or in connection with, its acquisition of other
assets, companies or all or part of any other businesses or
undertakings;
(h) the holders of Topco Rollover Units will enjoy only
limited minority protections and other rights to be more fully
described in the Offer Document;
(i) K5 may freely dispose of some or all of its Class A Topco
Units, meaning that the holders of Topco Rollover Units may find
themselves owning units in Topco alongside different owners. The
Topco Rollover Units will benefit from a "tag-along" right (as
noted above and to be more fully described in the Offer Document),
but K5 will be able to dispose of some or all of its Class A Topco
Units without triggering this tag-along right;
(j) individual holders of Topco Rollover Units will have very
limited control over the date(s) on and value(s) at which they may
be able to realise their investment in the Topco Group;
(k) holders of Topco Rollover Units will have no opportunity
to convert their Topco Rollover Units into Class A Topco Units;
(l) the MariaDB Shares are currently admitted to trading on
NYSE and MariaDB Shareholders are afforded certain standards and
protections, including in respect of disclosure. As a result.
MariaDB Shareholders who receive Topco Rollover Units -- being
unlisted, unregistered securities in a private company -- will not
be afforded protections commensurate with those that they currently
benefit from as shareholders in MariaDB, including because Topco
intends to rely on an exemption from registration under US
securities laws and will therefore not be registering the Topco
Rollover Units with the SEC. Except for certain limited information
to be provided to holders of the Topco Rollover Units to be more
fully described in the Offer Document and certain other financial
information regarding Topco as the holders of Topco Rollover Units
may reasonably request in writing from time to time (but no more
frequently than annually), Topco's LLC Agreement will not provide
holders of Topco Rollover Units with information rights;
(m) there can be no certainty or guarantee as to the
performance of the Topco Group or the MariaDB Group following the
Effective Date, and past performance cannot be relied upon as an
indication of future performance or growth;
(n) there is no certainty as to the number of MariaDB
Shareholders that will accept the Offer and therefore Topco may
hold less than all of the MariaDB Shares following the Initial
Closing Date and which, therefore, could impact the value of
Topco's assets; and
(o) MariaDB Shareholders will have no certainty as to the
amount of Topco Rollover Units they would receive because: (i) the
maximum number of Topco Rollover Units available to MariaDB
Shareholders under the Unlisted Unit Alternative will be limited to
the Rollover Threshold; and (ii) to the extent that elections for
the Unlisted Unit Alternative cannot be satisfied in full, the
number of Topco Rollover Units to be issued to each eligible
MariaDB Shareholder who has elected for the Unlisted Unit
Alternative will be reduced on a pro rata basis, and the
consideration for each MariaDB Share that is not exchanged for
Topco Rollover Units will be paid in cash in accordance with the
terms of the Cash Offer.
Advantages of electing to receive the Unlisted Unit Alternative:
(a) the Unlisted Unit Alternative allows Eligible MariaDB
Shareholders to invest directly in Topco providing continued
indirect economic exposure to MariaDB under private ownership; and
(b) from completion of the Offer, the Topco Rollover Units
will rank economically pari passu with the investment in Topco by
K5, and will carry a pro rata entitlement to dividends,
distributions and returns of capital.
MariaDB Shareholders are encouraged to take into account the risk
factors and other investment considerations outlined above in
relation to the Unlisted Unit Alternative, as well as their
particular circumstances, when deciding whether to elect to receive
the Unlisted Unit Alternative in respect of all of their holding in
MariaDB Shares. MariaDB Shareholders should also ascertain whether
acquiring or holding Topco Rollover Units is permitted or affected
by the laws of the jurisdiction in which they reside and consider
whether Topco Rollover Units are a suitable investment in light of
their own personal circumstances. Accordingly, MariaDB Shareholders
are strongly recommended to seek their own independent financial,
tax and legal advice in light of their own particular circumstances
and investment objectives before deciding whether to elect to
receive the Unlisted Unit Alternative. Any decision to elect to
receive the Unlisted Unit Alternative should be based on any such
independent financial, tax and legal advice and full consideration
of the information in this Announcement and the Offer Document
(when published).
Irrevocable undertakings
K1, K5, Topco and Bidco have received irrevocable undertakings to
accept the Offer from each of the parties listed at paragraph 11 of
the main body of this Announcement in respect of, in aggregate,
34,912,697 MariaDB Shares, representing in aggregate approximately
51.53% of the existing issued share capital of MariaDB as at April
22, 2024 (being the latest practicable date prior to the release of
this Announcement). These undertakings continue to be binding in
the event of a competing offer for MariaDB.
Kirkland & Ellis LLP and A&L Goodbody LLP are acting as legal
advisers to K1 and Bidco.
About MariaDB
MariaDB plc (NYSE: MRDB) is a new generation database company whose
products are used by companies big and small, reaching more than a
billion users through Linux distributions and have been downloaded
over one billion times. Deployed in minutes and maintained with
ease, leveraging cloud automation, our database products are
engineered to support any workload, any cloud and any scale -- all
while saving up to 90% of proprietary database costs. Trusted by
organizations such as Bandwidth, DigiCert, InfoArmor, Oppenheimer,
Samsung and SelectQuote, MariaDB's software is the backbone of
critical services that people rely on every day.
On January 31, 2024, the senior secured promissory note, dated as
of October 10, 2023 and amended on January 10, 2024, issued by the
Company to RP Ventures in the principal amount of $26.5 million.
The Company did not pay the outstanding principal, interest, and
other applicable fees or charges due and payable on the RP Note. In
addition, the Company and the guarantors under the RP Note failed
to comply with certain other obligations under the RP Note. This
nonpayment and compliance failure gave rise to events of default
under the RP Note.
On February 15, 2024, the Company received an unsolicited
non-binding indicative proposal from K1 Investment Management LLC
to acquire the entire issued and to be issued share capital of the
Company through K5 Private Investors, L.P., a fund controlled by
K1. K1 publicly announced such offer on February 16. The Company
said the announcement of the K1 Proposal by K1 constitutes an
immediate event of default under a Forbearance Agreement with RP
Ventures as agent and noteholder with respect to the RP Note. As a
result of such default, the forbearance period under the
Forbearance Agreement terminated on February 16, allowing RP
Ventures the right to declare all principal of and accrued interest
on the RP Note to be immediately due and payable. Interest on
amounts due under the RP Note accrues at the default rate of 2%
above the otherwise-applicable non-default interest rate of 10%.
On February 17, RP Ventures submitted a notice to the Company
regarding the Company's default under the Forbearance Agreement and
reserving RP Ventures' right to exercise its rights and remedies
under the RP Note Documents. RP Ventures provided to the Company a
copy of an activation notice that RP Ventures submitted to Bank of
America, N.A. asserting its control rights over the Company's
deposit account.
On March 18, 2024, the Company appointed Chris Creger of FTI
Consulting to serve as its Chief Restructuring Officer.
MARJALINAT INC: Hires William H. Brownstein as Counsel
------------------------------------------------------
Marjalinat, Inc. d/b/a House of Salominos seeks approval from the
U.S. Bankruptcy Court for the Central District of California to
employ William H. Brownstein & Associates, Professional Corporation
as counsel.
The firm will provide these services:
a. consult with the U.S. Trustee, and debtor in possession
concerning the administration of the case;
b. consult with the Subchapter V Trustee, concerning the
administration of the case;
c. investigate into the acts, conduct, assets, liabilities, and
financial condition of the Debtor, the operation of the Debtor's
business and any other matter relevant to the case and to formulate
the Plan of Reorganization;
d. participate in the formulation of a Disclosure Statement and
Plan of Reorganization, and to collect and file with the court
acceptances or rejections of said Plan or Plans; and
e. perform such other services as are appropriate regarding his
capacity as General Counsel in this case.
The firm will be paid at the rate of $600. The firm received from
the Debtor a retainer of $17,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
William H. Brownstein, Esq., a partner at William H. Brownstein &
Associates, Professional Corporation, disclosed in a court filing
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
William H. Brownstein, Esq.
William H. Brownstein & Associates,
Professional Corporation
39 Rumson Road
Rumson, NJ 07760-1920
Tel: (310) 458-0048
Fax: (310) 362-3212
Mobile: (310) 877-9882
Email: Brownsteinlaw.bill@Gmail.com
About Marjalinat, Inc.
Marjalinat, Inc. is engaged in the tobacco sales business.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 24-10433) on March 18,
2024. In the petition signed by Marc Suissa, president, the Debtor
disclosed $45,000 in assets and $3,635,986 in liabilities.
Judge Martin R. Barash oversees the case.
William H. Brownstein, Esq., WILLIAM H. BROWNSTEIN & ASSOCIATES,
P.C., represents the Debtor as legal counsel.
MARQUIE GROUP: Accumulated Deficit Raises Going Concern Doubt
-------------------------------------------------------------
The Marquie Group, Inc. disclosed in a Form 10-Q Report filed with
the U.S. Securities and Exchange Commission for the quarterly
period ended November 30, 2023, that substantial doubt exists about
its ability to continue as a going concern.
According to the Company, at February 29, 2024, the Company had
negative working capital of $6,460,742 and an accumulated deficit
of $14,938,000. These factors raise substantial doubt regarding the
Company's ability to continue as a going concern. The Company
generated a net loss for the nine months ended February 29, 2024,
of $239,970, compared to a net income of 848,999 for the nine
months ended February 28, 2023. Without additional revenues,
working capital loans, or equity investment, there is substantial
doubt as to the Company's ability to continue operations.
As of February 29, 2024, the Company had $6,249,446 in total
assets, $6,462,904 in total liabilities, and $213,458 in total
stockholders' deficit.
To date, the Company has funded its operations through a
combination of loans and sales of common stock. The Company
anticipates another net loss for the fiscal year ended May 31, 2024
and with the expected cash requirements for the coming year, there
is substantial doubt as to the Company's ability to continue
operations.
The Company is attempting to improve these conditions by way of
financial assistance through issuances of notes payable and
additional equity and by generating revenues through sales of
products and services.
A full-text copy of the Company's Form 10-Q is available at
https://tinyurl.com/4djrffju
About Marquie Group Inc.
The Marquie Group, Inc. is an emerging direct-to-consumer firm
specializing in product development and media, including a dynamic
radio and digital network.
MASH STUDIOS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Mash Studios, Inc.
7150 Village Dr.
Buena Park, CA 90621
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
Central District of California
Case No.: 24-11048
Judge: TBD
Debtor's Counsel: Susan Seflin, Esq.
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by CEO Bernard Brucha.
A full-text copy of the petition is now available for download.
Follow this link to get a copy today https://www.pacermonitor.com.
MELLO JOY: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Mello Joy Distributing, LLC
313 N. Chestnut St., Suite C
Lafayette, LA 70501
Chapter 11 Petition Date: April 25, 2024
Court: United States Bankruptcy Court
Western District of Louisiana
Case No.: 24-50338
Judge: Hon. John W. Kolwe
Debtor's Counsel: H. Kent Aguillard, Esq.
H. KENT AGUILLARD
141 S. 6th Street
Eunice, LA 70535
Tel: 337-457-9331
Email: kent@aguillardlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Gregory E. Elmore as general manager.
A copy of the Debtor's list of 20 largest unsecured creditors is
now available for download. Follow this link to get a copy today
https://www.pacermonitor.com.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/JJJJ5YQ/Mello_Joy_Distributing_LLC__lawbke-24-50338__0001.0.pdf?mcid=tGE4TAMA
MERCURITY FINTECH: Incurs $9.4 Million Net Loss in 2023
-------------------------------------------------------
Mercurity Fintech Holding Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 20-F reporting a net
loss of $9.36 million on $445,928 of total revenue for the year
ended Dec. 31, 2023, compared to a net loss of $5.63 million on
$863,438 of total revenue for the year ended Dec. 31, 2022.
As of Dec. 31, 2023, the Company had $30.39 million in total
assets, $12.56 million in total liabilities, and $17.83 million in
total shareholders' equity.
Singapore-based Onestop Assurance PAC, the Company's auditor since
2023, issued a "going concern" qualification in its report dated
April 22, 2024, citing that the Company has incurred recurring
operating losses and negative cash flows from operating activities
and has an accumulated deficit, which raise substantial doubt about
its ability to continue as a going concern.
Mercurity said, "If there is any change in business conditions or
other future developments, including any investments we may decide
to pursue, we may also seek to sell additional equity securities or
debt securities or borrow from lending institutions. Financing may
be unavailable in the amounts we need or on terms acceptable to us,
if at all. The sale of additional equity securities, including
convertible debt securities, would dilute our earnings per share.
The incurrence of debt would divert cash for working capital and
capital expenditures to service debt obligations and could result
in operating and financial covenants that restrict our operations
and our ability to pay dividends to our shareholders. If we are
unable to obtain additional equity or debt financing as required,
our business operations and prospects may suffer."
A full-text copy of the Form 20-F is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001527762/000149315224015608/form20-f.htm
About Mercurity
Formerly known as JMU Limited, Mercurity Fintech Holding Inc. is a
digital fintech company with subsidiaries specializing in
distributed computing and digital consultation across North America
and the Asia-Pacific region and is in the process of applying for
FINRA approval to add brokerage services to its business. The
Company's focus is on delivering innovative financial solutions
while adhering to principles of compliance, professionalism, and
operational efficiency. The Company's aim is to contribute to the
evolution of digital finance by providing secure and innovative
financial services to individuals and businesses.
METAVINE INC: Hires Greenberg Traurig as Special Tax Counsel
------------------------------------------------------------
Metavine, Inc. seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ Greenberg Traurig, LLP
as special tax counsel.
The firm will provide legal assistance to the Debtor in connection
with the Voluntary Disclosure Practice with the Internal Revenue
Service, as well as provide legal assistance to the Debtor's
accountants on connection with preparing the 2023 returns.
The firm will be paid at these rates:
Pallav Raghuvanshi, Esq. $1,320
Barbara T. Kaplan, Esq. $1,700
Scott E. Fink, Esq. $1,250
Shira Peleg, Esq. $1,025
The firm will be paid a retainer in the amount of $50,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Pallav Raghuvanshi, Esq., a partner at Greenberg Traurig, LLP,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Pallav Raghuvanshi, Esq.
Greenberg Traurig, LLP
One Vanderbilt Avenue
New York, NY 10017
Telephone: (212) 801-2151
Email: raghuvanship@gtlaw.com
About Metavine, Inc.
Metavine delivers a no-code digital agility platform and has
successfully acquired enterprise customers in a range of
industries, including Internet-of-Things (IoT), banking,
healthcare, telematics, and sales and marketing. Metavine brings an
innovative approach to the application lifecycle by enabling
companies to achieve cloud-first digital agility, thereby reducing
time to marketing, optimizing utilization of resources, and rapidly
innovating and delivering disruptive business solutions.
Metavine, Inc. in Covina, CA, filed its voluntary petition for
Chapter 11 protection (Bankr. C.D. Cal. Case No. 24-10025) on
January 3, 2024, listing as much as $10 million to $50 million in
both assets and liabilities. Angel Orrantia, chief executive
officer, signed the petition.
Judge Vincent P. Zurzolo oversees the case.
The Debtor tapped Levene, Neale, Bender, Yoo & Golubchik LLP and
DTO Law as counsel and GlassRatner Advisory & Capital Group, LLC,
doing business as B. Riley Advisory Services, as financial advisor.
MOONIES MF: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Moonies MF, LLC
3500 Hamlet Cove
Round Rock, TX 78664
Business Description: The Debtor owns and operates a burger
restaurants.
Chapter 11 Petition Date: April 25, 2024
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 24-10434
Judge: Hon. Shad Robinson
Debtor's Counsel: John Henry, Esq.
JOHN HENRY AND ASSOCIATES PLLC
407 West Liberty Avenue
Round Rock, TX 78664
Tel: (214) 673-1960
E-mail: johnhenry4579@gmail.com
Total Assets: $112,719
Total Liabilities: $2,165,175
The petition was signed by Craig Cohen as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/AJMMO6I/Moonies_MF_LLC__txwbke-24-10434__0001.0.pdf?mcid=tGE4TAMA
MORK'S AUTO: Seeks to Hire Neeleman Law Group as Counsel
--------------------------------------------------------
Mork's Auto Revival, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Washington to employ Neeleman Law
Group as counsel.
The firm's services include:
a. assisting the Debtor in the investigation of the financial
affairs of the estate;
b. providing legal advice and assistance to the Debtor with
respect to matters relating to this case and creditor
distribution;
c. preparing all pleadings necessary for proceedings arising
under this case; and
d. performing all necessary legal services for the estate in
relation to this case.
The firm will be paid at these rates:
Attorneys $550 per hour
Associates $475 per hour
Paralegal $225 per hour
The firm received from the Debtor a retainer of $7,500.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Jennifer L. Neeleman, Esq., a partner at Neeleman Law Group,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Jennifer L. Neeleman, Esq.
Neeleman Law Group, P.C.
1403 8th Street
Marysville, WA 98270
Tel: (425) 212-4800
Fax: (425) 212-4802
About Mork's Auto Revival, LLC
Mork's Auto Revival LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 24-10402-CMA) on
February 22, 2024. In the petition signed by Andrew Robert Mork,
managing member, the Debtor disclosed up to $50,000 in assets and
up to $500,000 in liabilities.
Judge Christopher M. Alston oversees the case.
Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C., represents
the Debtor as legal counsel.
MSS INC: Wins Cash Collateral Access Thru May 23
------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized MSS Inc. d/b/a MSS-Ortiz
Electrical Services to use cash collateral on an interim basis, in
accordance with the budget, with a 10% variance, thru May 23,
2024.
The Debtor requires the use of cash collateral to pay post-petition
operating expenses, including payroll, payroll taxes and expenses,
lease payments, material costs and expenses, and other costs
incidental to its performance of construction services, such as
fuel and transportation expenses, insurance, workers' compensation
insurance, health, dental, and vision insurance, purchase of
electrical and construction materials and hardware, payment of
subcontractors and procurement of specialized construction
services, utilities, and other expenses.
Prepetition, the Debtor incurred the following indebtedness in
connection with the financing of its business operations:
A. Truist Loan (Loan No. 0497). The Debtor, on February 23, 2018,
executed and delivered to SUNTRUST BANK, predecessor-in-interest to
TRUIST BANK a Promissory Note in the original principal amount of
$150,000. The security interest in the Truist Collateral was
perfected by the filing of a UCC-1 Financing Statement with the
North Carolina Secretary of State, File No. 2018 00174966A. The
Debtor paid, in full, the outstanding balance owed to Truist under
the Truist Loan, from the proceeds generated by the FNB Loan. As a
result, and on the Petition Date, there were no amounts due and
owing by the Debtor pursuant to the Truist Loan.
B. First National Loan (Loan No. 2786). Prepetition, the Debtor and
other coobligors, executed and delivered to FIRST NATIONAL BANK OF
PENNSYLVANIA, a Promissory Note dated July 26, 2023, in the
original principal amount of $450,000, the principal amount of
which was due and payable on January 26, 2025, with regularly
monthly payments of accrued interest, at a rate equal to 8.25% per
annum, and payable monthly commencing on August 26, 2023. Repayment
and performance of the FNB Note was secured by a security interest,
granted under a Security Agreement.
The security interest of FNB, in the FNB Collateral, was perfected
by the UCC Financing Statement filed with the North Carolina
Secretary of State on August 15, 2023, File No. 20230102499C. The
outstanding balance of the FNB Loan, as of August 14, 2023, was
$431,504.
C. McCorkle Loan. The Debtor executed and delivered to TOMMY JOE
MCCORKLE, a Promissory Note dated March 8, 2023, in the original
principal amount of $500,000, with interest accruing thereon at a
rate equal to 2% per annum and payable on demand. Repayment of the
McCorkle Note was secured by a Security Agreement, which granted
McCorkle a security interest in personal property collateral. The
security interest in the McCorkle Loan Collateral was perfected by
the filing of a UCC Financing Statement with the North Carolina
Secretary of State.
The Cash Collateral Creditors will have (i) a continuing
post-petition lien and security interest in all property and
categories of property of the Debtor in which and of the same
priority as each held as of the Petition Date, and the proceeds
thereof.
The Debtor will pay, as adequate protection, $10,000 to First
National Bank of Pennsylvania in exchange for the continued interim
use of cash collateral under the Order.
It will be a default thereunder for any one or more of the
following to occur:
(a) the Debtor fails to comply with any terms or conditions of the
Order; or
(b) the Debtor uses cash collateral other than as permitted in the
Order.
A further hearing on the matter is set for May 9 at 10 a.m.
A copy of the court's order and the Debtor's budget is available at
https://urlcurt.com/u?l=Jf3asG from PacerMonitor.com.
The Debtor projects $270,000 in total income and $266,287 in total
operating expenses for the period from April 24 to May 24, 2024.
About MSS Inc.
MSS. Inc. sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. E.D. N.C. Case No. 23-02487) on August 28, 2023. In
the petition signed by Matthew Filzen, vice president/chief
operations officer, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Joseph N. Callaway oversees the case.
Joseph Z. Frost, Esq., at Buckmiller, Boyette & Frost, PLLC,
represents the Debtor as legal counsel.
NANO MAGIC: CEO Provides Update on Brand Development Progress
-------------------------------------------------------------
Nano Magic, Inc. provided an update from President and CEO Tom
Berman following the Company's filing on April 3, 2024, of its
Annual Report on Form 10-K for the year ended Dec. 31, 2023.
Berman said, "Although we didn't hit our revenue or profit targets
in 2023, we made strides towards some of our strategic goals that
we expect to capitalize on in 2024."
Nano Magic continues to focus on building its brand by selling Nano
Magic branded products direct-to-consumer, through national
retailers, and in specialty channels such as the optical and safety
industries. Nano Magic saw growth in sales on Amazon in 2023.
Nano Magic also secured new programs with national retailers
including Menards, Kroger/Fred Meyer, and Kinney Drugs; Nano Magic
also extended existing programs with Walmart, Advanced Auto Parts,
Best Buy, Micro Center, and Spartan Nash among others. Fastenal
and Wesco, two companies that distribute safety products, now offer
Nano Magic branded products too.
Berman further explained: "Besides being determined to build our
brand for long-term value, we also recognize value in developing
private label and co-branded programs in our various sales
channels." Nano Magic renewed private labeled programs with
Walgreens, SEE Eyewear, Hoya SafeVision, and Vision Source. Nano
Magic has also developed new partnerships with Global Optics,
Cherry Optical, and Western Optical Supply in the optical channel.
Berman also noted a new and exciting 'Powered by Nano Magic' lens
cleaning program that is expected to launch in Q2 2024 with SVS
Vision, a top optical retailer.
Outside of the optical space, Berman further noted that "Nano Magic
recently launched a private label program with its 2-in-1 Anti-Fog
+ Lens Cleaner with Uline, a leader in the safety industry and Nano
Magic and Wallside Windows, a leading window manufacturer in
Michigan, recently launched a co-branded window and glass cleaner
program."
Berman concluded by stating "our team is working incredibly hard
every day, recognizing we're not yet where we want to be, I remain
optimistic about our near and long-term future. 2024 and beyond
should be very exciting."
About Nano Magic
Headquartered in Madison Heights, Michigan, Nano Magic Inc. --
www.nanomagic.com -- develops, commercializes and markets
nanotechnology powered consumer and industrial cleaners and
coatings to clean, protect, and enhance products for peak
performance. Consumer products include lens and screen cleaners and
coatings, anti-fog solutions, and household and automobile cleaners
and protective coatings sold direct-to-consumer and in big box
retail.
Sterling Heights, Michigan-based UHY LLP, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated April 2, 2024, citing that the Company has recurring losses
from operations, negative cash flow from operations, and an
accumulated deficit. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
NETCAPITAL INC: Issues Shares in Exchange for Debt Cancellation
---------------------------------------------------------------
Netcapital Inc. disclosed in a Form 8-K filed with the Securities
and Exchange Commission that on April 24, 2024, entered into a
Stock Purchase Agreement with Steven Geary, a member of the
Company's board of directors, for the issuance and sale in a
private placement of: 239,274 shares of the Company's common stock,
par value $0.001 per share, at a price per share of $0.1324 (which
price represents the "Minimum Price" under Nasdaq Rule 5635(d)), in
consideration of Mr. Geary's cancellation of $31,680 of outstanding
indebtedness owed to him by the Company. The Geary Shares were
issued as restricted securities as defined in Rule 144 of the
Securities Act of 1933, as amended on April 24, 2024. The Company
did not receive any proceeds for the issuance of the Geary Shares.
Also on April 24, 2024, the Company entered into a Stock Purchase
Agreement with Paul Riss, a member of the board of directors of
Netcapital Funding Portal, Inc., which is a wholly-owned subsidiary
of the Company, for the issuance and sale in a private placement
of: 442,024 shares of the Company's common stock, par value $0.001
per share, at a price per share of $0.1324 (which price represents
the "Minimum Price" under Nasdaq Rule 5635(d)), in consideration of
Mr. Riss' cancellation of $58,524 of outstanding indebtedness owed
to him by the Company. The Riss Shares were issued as restricted
securities as defined in Rule 144 of the Securities Act of 1933, as
amended on April 24, 2024. The Company did not receive any
proceeds for the issuance of the Riss Shares.
About Netcapital Inc.
Netcapital Inc. is a fintech company with a scalable technology
platform that allows private companies to raise capital online from
accredited and non-accredited investors. The Company gives
virtually all investors the opportunity to access investments in
private companies.
Netcapital said in its Quarterly Report for the period ended Jan.
31, 2024, "There can be no assurances that we will be able to
achieve a level of revenues adequate to generate sufficient cash
flow from operations or additional financing through private
placements, public offerings and/or bank financing necessary to
support our working capital requirements. The Company has recently
reduced its operating expenses and has turned its focus to its
funding portal business, which generates cash revenues and has seen
a growth in revenues on a year-to-year basis. The Company plans to
continue operating with lower fixed overhead amounts and seeks to
raise money from private placements, public offerings and/or bank
financing. The Company's management has determined, based on its
recent history and the negative cash flow from operations, that it
is unlikely that its plan will sufficiently alleviate or mitigate,
to a sufficient level, the relevant conditions or events noted
above. To the extent that funds generated from any private
placements, public offerings and/or bank financing, if available,
are insufficient, the Company will have to raise additional working
capital. No assurance can be given that additional financing will
be available, or if available, will be on acceptable terms. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern."
NEVER SLIP: Hires Berkeley Research as Financial Advisor
--------------------------------------------------------
Never Slip Holdings, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Berkeley Research Group, LLC as financial advisor.
The firm will provide these services:
(a) support the development of restructuring plans, financing,
and strategic alternatives for maximizing the enterprise value of
the Debtors;
(b) prepare various financial analyses to support restructuring
alternatives, including liquidity forecast, profitability and other
ad hoc requirements as necessary;
(c) provide support to the Debtors with regard to preparations
of First Day Motions relating to a potential Chapter 1 filing;
(d) assist the Debtors with reporting, administrative
requirements and potential testimony to effectuate a chapter 11
process;
(e) assist the Debtors with the communications and negotiations
with various third parties to support restructuring alternatives;
and
(f) provide other services as requested or directed by the
Debtors agreed to by the firm.
The firm will be paid at these rates:
Managing Directors $1,095 to $1,325 per hour
Associate Directors & Directors $865 to $1,050 per hour
Professional Staff $420 to $850 per hour
Support Staff $175 to $375 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In the 90 days prior to the Petition Date, the Debtors paid the
firm $716,210.30 for professional services performed and expenses
incurred. The Debtors also paid the firm $200,000 as retainer.
Kyle Richter, a partner at Berkeley Research Group, LLC, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Kyle Richter
Berkeley Research Group, LLC
99 High Street, 27th Floor
Boston, MA 02110
Tel: (877) 696-0391
About Never Slip Holdings, Inc.
Never Slip Holdings, Inc. and affiliates, including affiliates
Shoes for Crews, Inc., SHO Holding I Corporation, SHO Holding II
Corporation, SFC Canada, Inc., and Sunrise Enterprises, LLC, are
the category creator of slip resistant footwear and other safety
products for employers, employees, and individual consumers. The
Debtors sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 24-10663) on April 1, 2024. In
the petition signed by Christopher Simm, chief financial officer,
Never Slip Holdings disclosed up to $500 million in assets and up
to $1 billion in liabilities.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped ROPES & GRAY LLP as general bankruptcy counsel,
CHIPMAN BROWN CICERO & COLE, LLP as co-bankruptcy counsel, SOLOMON
PARTNERS SECURITIES, LLC as investment banker, BERKELEY RESEARCH
GROUP, LLC as financial advisor, OMNI AGENT SOLUTIONS, INC. as
claims agent, and C STREET ADVISORY GROUP, LLC as strategic
communications advisor.
NEVER SLIP: Hires Chipman Brown Cicero & Cole as Co-Counsel
-----------------------------------------------------------
Never Slip Holdings, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Chipman Brown Cicero & Cole, LLP as co-counsel.
The firm's services include:
(a) providing legal advice with respect to the Debtors' powers
and duties as debtors-in-possession in the continued operation of
their businesses and management of their properties;
(b) negotiating, drafting, and pursuing all documentation
necessary in these Chapter 11 Cases;
(c) preparing on behalf of the Debtors all applications,
motions, answers, orders, reports, and other legal papers necessary
to the administration of the Debtors' estates;
(d) appearing in Court and protecting the interests of the
Debtors before the Court;
(e) assisting with any disposition of the Debtors' assets, by
sale or otherwise;
(f) negotiating and taking all necessary or appropriate actions
in connection with a plan or plans of reorganization and all
related documents thereunder and transactions contemplated
therein;
(g) attending all meetings and negotiating with representatives
of creditors, the United States Trustee, and other
parties-in-interest;
(h) providing legal advice regarding bankruptcy law, corporate
law, corporate governance, transactional, litigation, and other
issues to the Debtors in connection with the Debtors' ongoing
business operations; and
(i) performing all other legal services for, and providing all
other necessary legal advice to, the Debtors that may be necessary
and proper in these Chapter 11 Cases.
The firm will be paid at these rates:
Partners $495 to $850 per hour
Associates $450 to $475 per hour
Paralegals $250 to $300 per hour
On March 26, 2024, the firm received a retainer payment from the
Debtors totaling $100,000, which was supplemented on March 29,
2024, with an additional $50,000. On March 28, 2024, the firm
issued the Debtors an invoice in the amount of $42,004.50 for
professional services rendered and costs incurred through March 27,
2024, which amount was drawn from the Security Retainer on March
28, 2024.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Mark L. Desgrosseilliers, Esq., a partner at Chipman Brown Cicero &
Cole, LLP, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The following paragraph is provided in response to Paragraph D.1 of
the UST Guidelines:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the twelve months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
differences and the reasons for the differences?
Response: No.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: A preliminary prospective budget and staffing plan for
the postpetition period that includes the firm as well as the
Debtors' other advisors has been approved by the Debtors. In
accordance with the UST Guidelines, the budget may be amended or
supplemented, as necessary, to reflect changed or unanticipated
developments.
The firm can be reached at:
Mark L. Desgrosseilliers, Esq.
Chipman Brown Cicero & Cole, LLP
Hercules Plaza
1313 North Market Street, Suite 5400
Wilmington, DE 19801
Tel: (302) 295-0192
Email: desgross@chipmanbrown.com
About Never Slip Holdings, Inc.
Never Slip Holdings, Inc. and affiliates, including affiliates
Shoes for Crews, Inc., SHO Holding I Corporation, SHO Holding II
Corporation, SFC Canada, Inc., and Sunrise Enterprises, LLC, are
the category creator of slip resistant footwear and other safety
products for employers, employees, and individual consumers. The
Debtors sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 24-10663) on April 1, 2024. In
the petition signed by Christopher Simm, chief financial officer,
Never Slip Holdings disclosed up to $500 million in assets and up
to $1 billion in liabilities.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped ROPES & GRAY LLP as general bankruptcy counsel,
CHIPMAN BROWN CICERO & COLE, LLP as co-bankruptcy counsel, SOLOMON
PARTNERS SECURITIES, LLC as investment banker, BERKELEY RESEARCH
GROUP, LLC as financial advisor, OMNI AGENT SOLUTIONS, INC. as
claims agent, and C STREET ADVISORY GROUP, LLC as strategic
communications advisor.
NEVER SLIP: Hires Omni Agent Solutions as Administrative Agent
--------------------------------------------------------------
Never Slip Holdings, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Omni
Agent Solutions Inc. as administrative agent.
The firm will render these services:
(a) assist with, among other things, solicitation, balloting and
tabulation of votes, and preparation of any related reports, as
required in support of confirmation of a Chapter 11 plan, and in
connection with such services, process requests for documents from
parties in interest;
(b) prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
(c) assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
(d) provide a confidential data room, if requested;
(e) manage and coordinate any distributions pursuant to a
chapter 11 plan; and
(f) provide such other processing, solicitation, balloting, and
other administrative services described in the Engagement
Agreement, but not included in the Section 156(c) Application, as
may be requested from time to time by the Debtors, the Court or the
Office of the Clerk of the Bankruptcy Court.
The firm will be paid at these rates:
Analyst $24 - $48 per hour
Consultants $52 - $192 per hour
Senior Consultants $52 - $192 per hour
Solicitation and Securities Services $196 per hour
Director of Solicitation $200 per hour
Technology/Programming $28 - $76 per hour
The retainer is $50,000.
In addition, the firm will seek reimbursement for expenses
incurred.
Paul Deutch, the executive vice president of Omni Agent Solutions,
disclosed in a court filing that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Paul H. Deutch
Omni Agent Solutions
5955 De Soto Avenue, Suite 100
Woodland Hills, CA 91367
Tel: (818) 906-8300
About Never Slip Holdings, Inc.
Never Slip Holdings, Inc. and affiliates, including affiliates
Shoes for Crews, Inc., SHO Holding I Corporation, SHO Holding II
Corporation, SFC Canada, Inc., and Sunrise Enterprises, LLC, are
the category creator of slip resistant footwear and other safety
products for employers, employees, and individual consumers. The
Debtors sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 24-10663) on April 1, 2024. In
the petition signed by Christopher Simm, chief financial officer,
Never Slip Holdings disclosed up to $500 million in assets and up
to $1 billion in liabilities.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped ROPES & GRAY LLP as general bankruptcy counsel,
CHIPMAN BROWN CICERO & COLE, LLP as co-bankruptcy counsel, SOLOMON
PARTNERS SECURITIES, LLC as investment banker, BERKELEY RESEARCH
GROUP, LLC as financial advisor, OMNI AGENT SOLUTIONS, INC. as
claims agent, and C STREET ADVISORY GROUP, LLC as strategic
communications advisor.
NEVER SLIP: Hires Ropes & Gray LLP as Bankruptcy Counsel
--------------------------------------------------------
Never Slip Holdings, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Ropes
& Gray, LLP as bankruptcy counsel.
The Debtors require legal counsel to:
(a) give advice with respect to the powers and duties of the
Debtors in the continued management and operation of their
businesses and properties;
(b) advise and consult on the conduct of these Chapter 11
cases;
(c) advise the Debtors regarding related tax matters;
(d) take any necessary action on behalf of the Debtors to
negotiate, draft, and obtain approval of a Chapter 11 plan and all
documents related thereto;
(e) represent the Debtors in connection with obtaining
authority to use cash collateral and post-petition financing;
(f) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(g) take all necessary actions to protect and preserve the
Debtors' estates;
(h) prepare pleadings in connection with these Chapter 11
cases;
(i) appear before the court and any appellate courts to
represent the interests of the Debtors' estates; and
(j) perform all other necessary legal services for the Debtors
in connection with the prosecution of these Chapter 11 cases.
During the 90 days prior to the petition date, the firm received
total payments in the aggregate amount of $1,932,685.50 as payments
for professional services.
The firm will be paid at these rates:
Partners $1,600 to $2,460 per hour
Counsel $1,000 to $2,460 per hour
Associates $830 to $1,490 per hour
Paraprofessionals $315 to $695to per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The following is provided in response to the request for additional
information set forth in Paragraph D.1 of the UST Guidelines:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: At the time of execution of the Engagement Agreement
until December 31, 2023, Ropes & Gray charged the Debtors its
standard rates in effect at the time, which were: $1,520 to $2,350
for partners; $830 to $2,330 for counsel; $770 to $1,390 for
associates; and $285 to $650 for paraprofessionals. Effective
January 1, 2023, Ropes & Gray’s standard rates changed and
pursuant to the terms of its engagement letter, since January 1,
2024, Ropes & Gray has charged the Debtors the standard rates in
effect as of January 1, 2024, which are: $1,600 to $2,460 for
partners; $1,000 to $2,460 for counsel; $830 to $1,490 for
associates; and $315 to $695 for paraprofessionals.
Question: Have the Debtors approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: The Debtors’ approved a budget and staffing plan for
Ropes & Gray covering the period from the Petition Date through
June 30, 2024.
Mr. Galardi disclosed in a court filing that the firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Gregg M. Galardi, Esq.
Cristine Pirro Schwarzman, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Telephone: (212) 596-9000
Facsimile: (212) 596-9090
Email: gregg.galardi@ropesgray.com
cristine.schwarzman@ropesgray.com
About Never Slip Holdings, Inc.
Never Slip Holdings, Inc. and affiliates, including affiliates
Shoes for Crews, Inc., SHO Holding I Corporation, SHO Holding II
Corporation, SFC Canada, Inc., and Sunrise Enterprises, LLC, are
the category creator of slip resistant footwear and other safety
products for employers, employees, and individual consumers. The
Debtors sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 24-10663) on April 1, 2024. In
the petition signed by Christopher Simm, chief financial officer,
Never Slip Holdings disclosed up to $500 million in assets and up
to $1 billion in liabilities.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped ROPES & GRAY LLP as general bankruptcy counsel,
CHIPMAN BROWN CICERO & COLE, LLP as co-bankruptcy counsel, SOLOMON
PARTNERS SECURITIES, LLC as investment banker, BERKELEY RESEARCH
GROUP, LLC as financial advisor, OMNI AGENT SOLUTIONS, INC. as
claims agent, and C STREET ADVISORY GROUP, LLC as strategic
communications advisor.
NEVER SLIP: Hires Solomon Partners as Investment Banker
-------------------------------------------------------
Never Slip Holdings, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Solomon Partners Securities, LLC as investment banker.
The firm's services include:
(a) General Financial Advisory Services. Solomon will:
(i) to the extent it deems necessary, appropriate and
feasible, familiarize itself with the business, operations,
properties, financial condition and prospects of the Debtors;
(ii) if requested by the Debtors, prepare materials
summarizing potential Transactions that the Debtors could pursue,
including its views on the advantages and disadvantages, timelines,
and primary considerations of each; and
(iii) if the Debtors determine to undertake a Transaction,
advise and assist the Debtors in structuring and effecting the
financial aspects of such a transaction or transactions, subject to
the terms and conditions of the Engagement Agreement.
(b) Sale Services. If the Debtors pursue a Sale, Solomon will:
(i) provide financial advice and assistance to the Debtors in
connection with a Sale, identify potential acquirers and, at the
Debtors' request, contact such potential acquirers;
(ii) at the Debtors' request, assist the Debtors in preparing
Sale Materials to be used in soliciting potential acquirers, it
being agreed that (A) such Sale Materials shall be based entirely
upon information supplied by the Debtors, (B) the Debtors shall be
solely responsible for the accuracy and completeness of the Sale
Materials, and (C) other than as contemplated by subparagraph
1(b)(ii) of the Engagement Agreement, the Sale Materials shall not
be used, reproduced, disseminated, quoted or referred to at any
time in any way, except with Solomon's prior written consent; and
(iii) if requested by the Debtors, advise and assist the
Debtors in negotiations with potential acquirers.
(c) Restructuring Services. If the Debtors pursue a
Restructuring, Solomon will:
(i) provide financial advice and assistance to the Debtors in
developing and pursuing a restructuring of the Debtors' existing
liabilities, which may include seeking approval of a Plan, which
may be a plan under the Bankruptcy Code;
(ii) if requested by the Debtors, in connection therewith,
provide financial advice and assistance to the Debtors in
structuring any new securities to be issued under a restructuring
of existing liabilities, including through a Plan;
(iii) if requested by the Debtors, advise and assist the
Debtors in negotiations with entities or groups affected by the
restructuring or Plan; and
(iv) if requested by the Debtors, participate in hearings
before the Bankruptcy Court with respect to the matters upon which
Solomon has provided advice, including, as relevant, coordinating
with the Debtors' counsel with respect to testimony in connection
therewith.
(d) Financing Services. If the Debtors pursue a Financing,
Solomon will:
(i) provide financial advice and assistance to the Debtors in
structuring a Financing, identifying potential Investors and, at
the Debtors' request, contacting such Investors;
(ii) if Solomon and the Debtors deem it advisable, assist the
Debtors in developing and preparing Financing Materials to be used
in soliciting potential Investors, it being agreed that (A) the
Financing Materials shall be based entirely upon information
supplied by the Debtors, (B) the Debtors shall be solely
responsible for the accuracy and completeness of the Financing
Materials, and (C) other than as contemplated by subparagraph
1(d)(ii) of the Engagement Agreement, the Financing Materials shall
not be used, reproduced, disseminated, quoted or referred to at any
time in any way, except with Solomon's prior written consent; and
(iii) if requested by the Debtors, advise and assist the
Debtors in negotiations with potential Investors.
The firm will be paid as follows:
(a) Monthly Advisory Fee. A Monthly Advisory Fee of $125,000 per
month (the "Monthly Advisory Fee"), which shall be due and paid in
advance by the Debtors beginning on a mutually agreed upon date by
the Debtors and Solomon, and thereafter on each monthly anniversary
of such date during the term of the Engagement Agreement. This
Monthly Advisory Fee shall commence on a mutually agreed upon date
occurring after both of the following conditions have been met: (i)
if, but only if, the Debtors have requested that Solomon prepare
and deliver to the Debtors the materials referenced in subparagraph
1(a)(ii) of the Engagement Agreement, such materials have been
delivered to the Debtors and (ii) the Debtors have informed Solomon
that it has determined to undertake a Transaction. In the event a
Sale or Restructuring is consummated, 50 percent of the aggregate
Monthly Advisory Fees paid after the third Monthly Advisory Fee
will be credited (once) against the applicable Sale Transaction Fee
or Restructuring Transaction Fee payable under the Engagement
Agreement.
(b) Sale Transaction Fee. If at any time during the Fee Period,
(x) any Sale is consummated or (y)(1) an agreement in principle or
definitive agreement to effect a Sale is entered into, and (2)
concurrently therewith or at any time thereafter (including
following the expiration of the Fee Period) any Sale is
consummated, the Debtors shall pay Solomon a Sale Transaction Fee
at the closing thereof, which shall be equal to (I) 1.65 percent of
that portion of Aggregate Consideration up to $350 million, plus
(II) 3 percent of that portion of Aggregate Consideration, if any,
greater than $350 million, but less than or equal to $400 million,
plus (III) 5 percent of that
portion of Aggregate Consideration, if any, greater than $400
million; provided, however, that in the event the Acquiror is Bunzl
plc, the Sale Transaction Fee shall be $3.75 million.
(c) Restructuring Transaction Fee. If at any time during the Fee
Period, (x) any Restructuring is consummated (including the
consummation of a sale under Section 363 of the Bankruptcy Code) or
(y)(1) an agreement in principle, definitive agreement or Plan to
effect a Restructuring is entered into and (2) concurrently
therewith or at any time thereafter (including following the
expiration of the Fee Period), any Restructuring is consummated
(including the consummation of a sale under Section 363 of the
Bankruptcy Code), the Debtors shall pay Solomon a Restructuring
Transaction Fee at the closing thereof, equal to $3.75 million.
(d) Financing Transaction Fee. If at any time during the Fee
Period the Debtors consummates any Financing with any party other
than CCMP Capital Advisors, L.P. or its affiliates, the Debtors
will pay to Solomon a Financing Transaction Fee equal to the
applicable percentage below of the gross proceeds of, or if
greater, maximum lending or funding commitment under, such
Financing:
i. 1 percent for senior secured debt (including any "Debtor in
Possession" financing);
ii. 2 percent for senior debt, including unitranche debt
(i.e., combining different types of debt, such as senior and
subordinated, into one instrument), real estate-related debt,
"last-out" or "FILO" debt, and any other senior debt funded by
non-bank lenders;
iii. 3 percent for junior debt, including unsecured debt,
subordinated debt or mezzanine debt; and
iv. 5 percent for common, preferred or other equity,
including, without limitation, securities or debt convertible into
equity or equity-linked debt; and v. with respect to any other
securities or indebtedness issued, such financing fees or other
compensation as shall be customary under the circumstances and
mutually agreed by the Debtors and Solomon.
(e) Expenses. The Debtors shall, whether or not any transaction
contemplated by the Engagement Agreement shall be proposed or
consummated, reimburse Solomon on a monthly basis for its
reasonable out-of-pocket expenses, including, without limitation,
travel and lodging, data processing and communication charges,
research and courier services, incurred in connection with, or
arising out of, Solomon's activities under or contemplated by the
Engagement Agreement or in the enforcement of Solomon's rights
under the Engagement Agreement, including all fees, disbursements
and other charges of counsel to be retained by Solomon (without the
requirement that the retention of such counsel be approved by the
Bankruptcy Court) and of other consultants and advisors retained by
Solomon with the Debtors' consent.
Tero Janne, a partner at Solomon Partners Securities, LLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Tero Janne
Solomon Partners Securities, LLC
1345 6th Avenue, 31st Floor
New York, NY 10105
Tel: (212) 508-1665
About Never Slip Holdings, Inc.
Never Slip Holdings, Inc. and affiliates, including affiliates
Shoes for Crews, Inc., SHO Holding I Corporation, SHO Holding II
Corporation, SFC Canada, Inc., and Sunrise Enterprises, LLC, are
the category creator of slip resistant footwear and other safety
products for employers, employees, and individual consumers. The
Debtors sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 24-10663) on April 1, 2024. In
the petition signed by Christopher Simm, chief financial officer,
Never Slip Holdings disclosed up to $500 million in assets and up
to $1 billion in liabilities.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped ROPES & GRAY LLP as general bankruptcy counsel,
CHIPMAN BROWN CICERO & COLE, LLP as co-bankruptcy counsel, SOLOMON
PARTNERS SECURITIES, LLC as investment banker, BERKELEY RESEARCH
GROUP, LLC as financial advisor, OMNI AGENT SOLUTIONS, INC. as
claims agent, and C STREET ADVISORY GROUP, LLC as strategic
communications advisor.
NORTHSTAR GROUP: Moody's Rates New Secured 1st Lien Term Loan 'B2'
------------------------------------------------------------------
Moody's Ratings assigned a B2 rating to the proposed backed senior
secured first lien term loan of NorthStar Group Services, Inc. All
other ratings for NorthStar, including the B2 corporate family
rating, B2-PD probability of default rating and B2 rating on its
existing backed senior secured first lien term loans are unchanged.
The outlook is stable.
The proceeds from the new $740 million term loan maturing in 2030
will be used primarily to repay about $679 million outstanding on
the company's existing term loans due 2026. The net proceeds will
also be used to repay about $12 million drawn on the existing $100
million ABL (unrated) maturing in 2025, add to the cash balance and
pay transaction fees and expenses. Concurrently, NorthStar plans to
raise a $100 million ABL revolver (unrated) expiring in 2029 to
replace the existing ABL facility. The company is also extending
debt maturities and expects to reduce annual debt amortization
requirements to 1% compared to the current requirement on the
existing term loans, which has stepped up to 5% for 2024 from 2.5%
through 2023. Moody's will withdraw the B2 rating on the 2026 term
loans once this debt is repaid.
The transaction will increase financial leverage, with pro forma
debt-to-EBITDA (including Moody's standard adjustments) of
approximately 4.6x at December 31, 2023. However, Moody's expects
the ratio to improve over the next year absent any debt funded
transactions that weaken the credit metrics.
RATINGS RATIONALE
NorthStar's ratings reflect its diverse operating model and good
technical capabilities in its specialty areas, including the
handling and disposal of hazardous waste. These factors make the
company well-positioned to capture future opportunities in the
nuclear plant deconstruction and decommissioning (D&D) market and
significant projects in its other core services of commercial and
industrial deconstruction (C&I) and coal ash remediation. The D&D
business is complemented by a high-value disposal facility that
enables vertical integration. Demand for the company's services is
partly driven by the compliance needs of customers to meet
increasingly stringent environmental regulations. The contractual
nature of services, especially for large multi-year projects that
are underpinned by longstanding customer relationships, provides
revenue visibility.
However, the company is facing revenue and margin pressure from its
C&I business as cautious customers defer or cancel projects amid
higher interest rates and weaker industrial activity. Revenue and
cash flow will fluctuate due to the volatility of project work.
This includes variable timing in NorthStar's large volume of small
projects and the irregularity of large scale weather events in its
emergency response business. The nuclear D&D projects also have
variable timing around potential plant shutdowns and event driven
work from limited at-risk nuclear reactors. These projects take
long to plan and are vulnerable to delays or disruptions, which
places importance on having multiple projects simultaneously and
maintaining good liquidity. The D&D business poses considerable
operational risk given sizeable projects in a headline risk
industry. Moody's anticipates that a ramp in activity from
contracted large projects and business wins will drive higher
earnings and stronger credit metrics over the next 12-18 months.
Event risk is high with private equity control considering
NorthStar's history of debt funded dividends.
The B2 rating on the new term loan reflects the preponderance of
this class of debt in the capital structure. The term loan ranks
behind the $100 million ABL revolving facility, which has a first
lien on the more liquid assets, including all accounts receivable
and inventory. The term loan has a second lien on the revolver
collateral and a first lien on the remainder of the company's
domestic assets.
The stable outlook reflects Moody's expectation of moderate organic
revenue growth and earnings to support positive free cash flow from
the contracted book of business over the next year, aided by recent
acquisition synergies. The company is well positioned to capitalize
on potential upcoming D&D projects and future large projects in its
commercial and industrial deconstruction business. Moody's
anticipates these factors will drive EBITDA growth that enables
deleveraging and strengthens cash flow over the next 12 to 18
months. Moody's also expects the company to maintain adequate
liquidity.
Liquidity is adequate based on Moody's expectation of ample
revolver availability and positive free cash flow to balance modest
cash on hand. The debt refinancing is expected to improve the
burden on cash from mandatory amortization, to about $7.4 million
annually (1%) from about 33 million (5%) in 2024. The new $100
million ABL revolving credit facility due 2029 is expected to be
undrawn at transaction close. Moody's expects the facility to be
modestly used beyond letters of credit, which are likely needed to
support the company's surety bonds and insurance programs. The
company has annual equipment finance obligations, which are
expected to be about $18 million in 2024. The ABL revolver is
expected to have a springing leverage covenant for fixed charge
coverage of at least 1.0x, to be tested if the excess availability
is less than the greater of 10% of the borrowing base (capped at
the facility size) or $8 million, similar to the existing ABL
facility. The term loan is expected to have a financial maintenance
covenant for consolidated total leverage, with the threshold to be
determined.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be downgraded with deteriorating liquidity,
including weakening free cash flow and/or diminishing revolver
availability. A significant disruption in the performance on any
major contract or delay in the company's large, contracted projects
or failure to capture a good portion of upcoming D&D or
commercial/industrial deconstruction awards could also drive a
negative rating action. The ratings could also be downgraded with
expectations of weakening operating performance, including
sustained margin erosion, debt-to-EBITDA remaining above 5x or
EBIT-to-interest expense below 2.5x. A major accident related to
the handling of radioactive or hazardous material could also lead
to a ratings downgrade, as could debt funded dividends or
acquisitions that weaken the metrics or liquidity.
The ratings could be upgraded with accelerated and consistent
growth in margins and free cash flow, driven by an increase in
contract wins on upcoming nuclear plant D&D projects and commercial
deconstruction projects, such that debt-to-EBITDA is expected to
remain below 4x. A more conservative financial policy and the
maintenance of good liquidity would also be prerequisites to an
upgrade.
The principal methodology used in this rating was Environmental
Services and Waste Management published in May 2023.
Marketing terms for the new credit facilities (final terms may
differ materially) include the following: incremental pari passu
debt capacity up to the greater of $212.9M and 100% of adjusted
EBITDA, plus unlimited amounts subject to 3.5x first lien net
leverage. The new term loan facility includes a financial
maintenance covenant set at a total leverage ratio to be
determined, tested quarterly. There is no inside maturity sublimit.
A "blocker" provision restricts the transfer of material
intellectual property to unrestricted subsidiaries. Designation of
restricted subsidiaries as unrestricted subsidiaries are only
permitted up to a percentage, to be determined, of the total assets
or revenues of Holdings (including all unrestricted subsidiaries).
The credit agreement provides some limitations on up-tiering
transactions, requiring 100% lender consent for amendments that
subordinate the debt and liens.
NorthStar Group Services, Inc. provides a range of services,
including commercial and industrial deconstruction; nuclear
decommissioning, deconstruction and waste disposal; property damage
response and restoration; and environmental coal ash remediation
and soil stabilization services. The company has a disposal
facility operated under Waste Control Specialists LLC (WCS) in West
Texas that processes, treats, stores and disposes of radioactive
and hazardous waste. NorthStar acquired Trans Ash, Inc., a provider
of coal ash remediation services, in January 2023. NorthStar's
revenue approximated $1 billion for the twelve months ended
December 31, 2023.
NORTHSTAR GROUP: S&P Affirms 'B' ICR, Outlook Stable
----------------------------------------------------
S&P Global Ratings affirmed its ratings, including its 'B' issuer
credit rating, on nuclear decommissioning, commercial building
deconstruction, and diversified environmental services provider
NorthStar Group Services Inc. S&P assigned its 'B+' issue-level
rating and '2' recovery rating to the proposed secured term loan.
The stable outlook reflects S&P's view that NorthStar will continue
to generate solid profitability from its mix of infrastructure and
environmental projects and will keep its credit measures at
appropriate levels for the current ratings.
Solid performance at the end of 2023 helped keep credit measures
appropriate. NorthStar enjoyed a strong end to 2023, as the company
generated over 25% of its pro forma annual EBITDA in the typically
seasonally weaker fourth quarter. Nuclear services work was quite
strong, with a good amount of disposal revenue from the Vermont
Yankee and Crystal River 3 decommissioning jobs, including the
removal of a reactor vessel. S&P said, "We expect the Nuclear
Regulatory Commission and the state of California to approve the
license transfer for GE Hitachi Nuclear Energy's Vallecitos Nuclear
Center plant soon, which would allow NorthStar to start working on
that project. We estimate the company's leverage ratio was less
than 4.0x at the end of 2023. We continue to view adjusted debt to
EBITDA of either better than or within the 4.5x-6.5x range and
EBITDA to interest coverage of well above 1.5x as appropriate for
the current ratings."
The company remains optimistic on coal ash remediation activity.
NorthStar says the total addressable market for coal combustion
residual (CCR) is $6 billion and that this market has grown over
60% in the past five years. The company has pointed to more than
150 CCR impoundments that are rated "poor" and are in need of
remediation. It believes the U.S. Environmental Protection Agency
will establish rules in the first half of 2024 on legacy surface
impoundments, which could provide significant upside on CCR work.
However, while this backdrop appears favorable for future projects,
the timing and magnitude of such projects are uncertain and depend
on customers' objectives and budgets.
The business risks inherent in nuclear decommissioning along with
the potential for aggressive financial policies underpin our
ratings on NorthStar. The company has concentration risk because a
significant portion of its nuclear services segment's revenue is
driven by the Vermont Yankee and Crystal River 3 projects. While
the long-term outlook for decommissioning projects appears good,
the timing of these projects is uncertain and the bidding process
can be quite competitive among service providers. Like the
utility-owned Vermont Yankee and Crystal River 3 plants, the
industrial Vallecitos plant will also have its operating license
transferred to the contractor from the utility. With long-duration,
fixed-price projects, it is imperative for service providers to
engage in good project management, operational cost control, and
disciplined structured bidding during the duration of its existing
and new projects. Effective monitoring of trust fund balances and
liquidity to ensure they allow for on-time and on-budget completion
is also key. The potential for aggressive financial policies given
the company's status as a portfolio company of a financial sponsor,
is also an important factor underpinning the ratings.
S&P said, "The stable outlook reflects our view that NorthStar will
continue to generate solid profitability from its mix of nuclear
decommissioning, environmental remediation, commercial
deconstruction and demolition, and disaster restoration jobs. The
company's adjusted debt-to-EBITDA ratio will remain either better
than or within the 4.5x-6.5x range we see as appropriate for the
current ratings. Our base-case scenario also incorporates EBITDA
interest coverage remaining well-above 1.5x with liquidity
remaining adequate."
NorthStar's backlog at the end of December 2023 was a healthy $3.2
billion, roughly evenly split between hard and soft. This includes
a $120 million project awarded for coal ash remediation. It has an
abundance of smaller-size jobs as well. Good operational execution
is likely to elicit solid operating performance over the next year.
The outlook also reflects its assumption that financial-sponsor
owner J.F. Lehman will not take NorthStar's debt leverage above the
stated range during the next year.
S&P may lower its ratings on NorthStar within the next 12 months
if:
-- Business conditions in the demolition and nuclear
decommissioning sectors deteriorate such that EBITDA declines more
than 10%, causing its S&P Global Ratings-adjusted debt leverage to
exceed 6.5x or EBITDA interest coverage to drop to 1.5x;
-- The company experiences unexpected delays or large adverse
changes in costs pertaining to in-progress or new projects or
integration-related risks that compress margins and diminish its
credit metrics;
-- It undertakes more aggressive financial policies (e.g.,
additional dividend payouts or engaging in an unexpectedly large
debt-financed acquisition) that sustain S&P Global Ratings-adjusted
leverage above 6.5x with no clear prospects of recovery; or
-- Any combination of the above or other factors constrain the
company's liquidity.
S&P sees the likelihood of an upgrade within the next 12 months as
remote, because it does not believe NorthStar's financial policies
would support it.
However, for a modest uplift in ratings:
-- J.F. Lehman's (or any financial sponsor's) control of the
company must diminish to and remain below 40%;
-- NorthStar must maintain S&P Global Ratings-adjusted debt
leverage below 4.5x on a sustained basis;
-- The company must exhibit a record of abiding by conservative
financial policies with a low risk of releveraging; and
-- The company must reduce the potential for volatility in
earnings and cash flows.
Environmental and social credit factors have no material influence
on S&P's credit analysis.
Governance is a moderately negative consideration. S&P said, "Our
assessment of the company's financial risk profile as highly
leveraged reflects corporate decision-making that prioritizes the
interests of the controlling owners, in line with our view of the
majority of rated entities owned by private-equity sponsors. Our
assessment also reflects their generally finite holding periods and
a focus on maximizing shareholder returns."
NOVA LIFESTYLE: Receives Noncompliance Notice From Nasdaq
---------------------------------------------------------
Nova LifeStyle, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that the Company received
written notice from the NASDAQ Stock Market stating that the
Company does not meet the requirement of maintaining a minimum of
$2,500,000 in stockholders' equity for continued listing on the
NASDAQ Capital Market, as set forth in NASDAQ Listing Rule
5550(b)(1), the Company also does not meet the alternative of
market value of listed securities of $35 million under NASDAQ
Listing Rule 5550(b)(2) or net income from continuing operations of
$500,000 in the most recently completed fiscal year or in two of
the last three most recently completed fiscal years under NASDAQ
Listing Rule 5550(b)(3), and the Company is no longer in compliance
with the NASDAQ Listing Rules.
The NASDAQ notification letter provides the Company until June 6,
2024 to submit a plan to regain compliance. If the plan is
accepted, NASDAQ can grant the Company an extension up to 180
calendar days from the date of NASDAQ letter to demonstrate
compliance. If NASDAQ does not accept the Company's compliance
plan, the Company will have the opportunity to appeal that decision
to a Hearing Panel per NASDAQ Listing Rule 5815(a).
The Company will submit a plan to regain compliance before June 6,
2024 and will consider the various options available to it to
regain compliance with the NASDAQ Listing Rules.
About Nova Lifestyle
Headquartered in Commerce, CA, Nova LifeStyle, Inc. is a
distributor of contemporary styled residential and commercial
furniture incorporated into a dynamic marketing and sales platform
offering retail as well as online selection and global purchase
fulfillment. The Company monitors popular trends and products to
create design elements that are then integrated into our product
lines that can be used as both stand-alone or whole-room and home
furnishing solutions. Through its global network of retailers,
e-commerce platforms, stagers and hospitality providers, Nova
LifeStyle also sells (through an exclusive third-party
manufacturing partner) a managed variety of high quality bedding
foundation components.
San Mateo, California-based WWC, P.C., the Company's auditor since
2022, issued a "going concern" qualification in its report dated
April 12, 2024, citing that the Company incurred a net loss for the
years ended Dec. 31, 2023 and 2022, and the accumulated deficit
increased from $36.71 million to $44.43 million from 2022 to 2023.
These factors, raise substantial doubt about its ability to
continue as a going concern.
OMNIQ CORP: Awarded Follow-On Order for Machine Vision Technology
-----------------------------------------------------------------
OMNIQ Corp. announced that the Company has received a follow-on
order to provide its AI-based machine vision safety solution to a
top, defense authority for the prevention of terror attacks in a
sensitive zone outside the US.
The project includes the deployment of hundreds of AI based sensors
and software with powerful computers to provide vital real time
performance. OMNIQ's safety system is a groundbreaking cloud
and/or on-premises-based security solution for Homeland Security,
Safe City, and Safe Campus applications that uses unique, patented
AI-based machine vision technology and software to gather real-time
data in order to monitor & control access, provide intelligence,
and prevent crimes and acts of hostility. OMNIQ's algorithm is
based on a neural network model complimented by machine learning,
having deployed over 20,000 cameras and capturing millions of cars
enabling OMNIQ to provide superior performance saving lives and
improving safety of large populations.
"Our reselection, based on our performance and the unique - proven
features, is likely the strongest and most important vote of
confidence in the performance of our reliable, highly sophisticated
solution. We are fulfilling this follow-on order with the highest
level of pride and responsibility," said Shai Lustgarten, CEO of
OMNIQ. "We can proudly say, that today, OMNIQ's AI based solutions
are deployed in some of the most sensitive regions of the world and
have been proven as an essential tool in crime and terror
prevention. We provide critical notifications and intelligence to
homeland security organizations based on the most sophisticated AI
and machine learning technology."
About omniQ Corp.
Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) --
http://www.omniq.com-- provides computerized and machine vision
image processing solutions that use patented and proprietary AI
technology to deliver data collection, real time surveillance and
monitoring for supply chain management, homeland security, public
safety, traffic and parking management and access control
applications. The technology and services provided by the Company
help clients move people, assets and data safely and securely
through airports, warehouses, schools, national borders, and many
other applications and environments.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated April 1, 2024, citing that the Company has a deficit in
stockholders' equity, and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
PARAMOUNT INTERMODAL: Arturo Cisneros Named Subchapter V Trustee
----------------------------------------------------------------
The U.S. Trustee for Region 16 appointed Arturo Cisneros as
Subchapter V trustee for Paramount Intermodal Systems, Inc.
Mr. Cisneros will be paid an hourly fee of $600 for his services as
Subchapter V trustee while the trustee administrator will be
compensated at $200 per hour. In addition, the Subchapter V trustee
will receive reimbursement for work-related expenses incurred.
Mr. Cisneros declared that he is a disinterested person according
to Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Arturo Cisneros
3403 Tenth Street, Suite 714
Riverside, CA 92501
Phone: (951) 682-9705/(951) 682-9707
Email: Arturo@mclaw.org
About Paramount Intermodal Systems
Paramount Intermodal Systems, Inc. offers a range of logistics and
transportation services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No.
24-12857) on April 12, 2024, with $1 million to $10 million in
assets and liabilities. Carlos Orellana, director, signed the
petition.
Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Golubchik L.L.P.
represents the Debtor as legal counsel.
PARTNERS IN HOPE: Hires Newpoint Advisors as Financial Advisor
--------------------------------------------------------------
Partners In Hope, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of South Carolina to employ Newpoint
Advisors Corporation as financial advisor.
The firm will assist the Debtor in preparing monthly operating
reports, preparing budgets, assistance with financial information
related to the schedules and plan and possibly its annual tax
returns.
The firm will be paid at the rate of $225 to $395 per hour.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Carin Sorvik, a director at Newpoint Advisors Corporation,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Carin Sorvik, CPA, CIRA
Newpoint Advisors Corporation
421 S Lakeside Drive #5
Lake Worth Beach, FL 33460
Tel: (800) 306-1250
Fax: (702) 543-3881
About Partners In Hope, Inc.
Partners In Hope, Inc. owns an assisted living facility located at
Loris Oaks, 260 Watson Heritage Rd, Loris SC 29569 valued at $12
million.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Codee (Bankr. D. S.C. Case No. 24-00935) on March 13,
2024. In the petition signed by Terry Mclean, treasurer, the Debtor
disclosed $24,501,256 in assets and $16,893,875 in liabilities.
Jane H. Downey, Esq., at BAKER DONELSON, represents the Debtor as
legal counsel.
PCS & ESTIMATE: Hires Compass Advisory as Investment Banker
-----------------------------------------------------------
PCS & Estimate, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Ohio to employ Compass Advisory
Partners, LLC as investment banker.
The firm's services include:
a. providing investment banking services in connection with the
contemplated sale;
b. preparing a confidential teaser describing the assets and
operations of the Debtor's business to solicit potential interest
in its acquisition;
c. developing and managing a data room for interested buyers to
access the Debtor's confidential information upon receipt of
acceptable non-disclosure agreements;
d. developing and soliciting potential qualified buyers; and
e. coordinating the due diligence process and providing hands-on
support in responding to requests for information from various
interested parties.
The firm will be paid $20,000 upon approval of the application in
payment of the firm's first four weeks of engagement, and $3,000
for each subsequent week of employment.
The firm will be paid a success fee of 3 percent of the total sale
proceeds in the event a qualified buyer closes on a sale of the
Debtor at a price of $750,000 or more.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Jack Teitz, a managing director at Compass Advisory Partners, LLC,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Jack Teitz
Compass Advisory Partners, LLC
306 Fourth Avenue Suite 701
Pittsburgh, PA 15222
Tel: (412) 855-7625
Email: Jack@CompassAdvisoryPartners.com
About PCS & Estimate, LLC
PCS & Estimate, LLC is a provider of pre-construction cost
management and construction consulting services. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
N.D. Ohio Case No. 24-10264-skk) on January 26, 2024. In the
petition signed by Brandon Lawlor, president and member, the Debtor
disclosed up to $1 million in both assets and liabilities.
Judge Suzana Krstevski Koch oversees the case.
Richard K. Stovall, Esq., at Allen Stovall Neuman & Ashton LLP,
represents the Debtor as legal counsel.
PETROLIA ENERGY: Seeks Stay of Receivership Appointment Order
-------------------------------------------------------------
Petrolia Energy Corporation disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on April 15, 2024, the
Company filed a notice of an appeal of the receivership order, and
on April 16, 2024, the Company filed a motion to set a bond in the
amount of $70,736; a declaration of the Company's Chief Executive
Officer; and a proposed order for emergency stay of the
receivership appointment and suspension of the turnover order. To
the Company's knowledge, the court has not acted on its April 16,
2024 motions or proposed orders, and the outcome of such motions
and orders are unknown and may not be in the Company's favor.
In March 2022, Petrolia Energy and Petrolia Canada Corporation, an
affiliate of the Company, filed a lawsuit in the 133rd Judicial
District Court, Harris County Texas (Cause No. 2022-15278), against
Jovian Petroleum Corporation, Zel Khan and Quinten Beasley.
In the petition against the Defendants, the Company and Petrolia
Canada alleged causes of action for fraud and breach of contract
against all the named Defendants and breach of fiduciary duty
claims against Defendants Zel Khan and Quinten Beasley. Defendant
Zel Khan was a former CEO and director of the Company, and
Defendant Quinten Beasley was a former senior vice president and
director of Petrolia Canada.
The Company and Petrolia Canada demanded a jury trial and are
seeking monetary relief of more than $1 million against the
Defendants.
In April and May 2022, each of the Defendants filed an Original
Answer, generally denying all of the allegations of the Company and
Petrolia Canada.
Subsequently, in September 2022, Defendants filed an amended answer
and counterclaims. Pursuant to the amended answer, Defendants
generally denied the allegations of the Company and Petrolia Canada
and are seeking indemnification under the Company's governing
documents and statutory provisions.
Beasley is seeking repayment of the outstanding balance of $5,000
plus accrued interest ($4,710) allegedly owed to him by the Company
in connection with a promissory note entered into with the Company
on July 14, 2016.
In September 2022, Joel Oppenheim and Critical Update, Inc., owned
by Beasley, filed a Petition in Intervention. Oppenheim alleges
that he advanced at least $797,000 to the Company from 2015 to 2019
(including $416,900 alleged owed under a loan agreement) and that
he also provided various certificates of deposit to the Company in
the aggregate amount of $258,251. Oppenheim is seeking return of
amounts advanced with interest, a declaratory judgment establishing
the amount of Company stock and warrants owed to him, and
attorney's fees. Separately, Critical Update is seeking C$120,000
alleged owed to it in consideration for services rendered to
Petrolia Canada, plus interest and attorney's fees.
On Oct. 11, 2022, the Company and Petrolia Canada filed a general
denial of all the Defendants' counterclaims.
Subsequently, on Dec. 6, 2022, Oppenheim filed a motion for
severance asking the court to sever his breach of loan agreement
claim from the other claims in this lawsuit and adjudicate the
claim as Cause No. 2022-15278-B. The same day, Oppenheim also
filed a motion for partial summary judgment on his breach of loan
agreement claim.
On Dec. 22, 2022, Oppenheim filed a separate lawsuit and
application for temporary injunction (Cause No. 2022-83054) in the
157th Judicial District Court, Harris County Texas against the
Company and Petrolia Canada and their individual board members.
That action is a shareholder derivative lawsuit filed against the
Company alleging, among other things, breach of duty of loyalty and
breach of duty of obedience, as well as seeking to compel a
shareholder meeting and seeking expedited discovery. On Dec. 30,
2022, Jovian Petroleum Corporation filed a petition in intervention
to join this newly filed lawsuit.
In January 2023, the Company and Petrolia Canada filed a motion to
strike the intervention of Oppenheim and on Feb. 3, 2023, Oppenheim
filed a response to that motion arguing that such intervention is
proper.
On Feb. 9, 2023, Edna Meyer-Nelson, Suzanne Klein, and Laura S.
Ward, each a shareholder of the Company, filed a separate Petition
in Intervention to join in Oppenheim's derivative suit against the
Company. This Petition has since been withdrawn.
On March 2, 2023, Dr. Marvin Chasen and Billie Mae Chasen filed a
separate Petition in Intervention to join in Oppenheim's derivative
suit against the Company.
The Additional Intervenors are seeking an order compelling an
annual shareholder meeting of the Company; a temporary injunction
requiring the Defendants to hold an annual and special meeting of
the shareholders of the Company within 30 days to elect directors
of the Company and conduct such other proper business as may come
before it; a temporary injunction enjoining the Defendant Directors
from voting their Series B Preferred Shares; an order combining the
hearing on the temporary injunction with a trial on the merits;
expedited discovery; and upon final trial, the Additional
Intervenors are requesting: (i) rescission of the Series B
Preferred Stock; (ii) forfeiture of all compensation paid to the
Defendant Directors by the Company after the Series B Preferred
Stock issuance; (iii) actual damages in an amount to be proven at
trial; (iv) exemplary damages sufficient to deter the directors of
other Texas corporations from disenfranchising a corporation's
shareholders, as alleged by the Additional Intervenors; (v)
attorneys' fees and expenses; and (vi) such other and further
relief to which Additional Intervenors are entitled.
On March 15, 2024, after reviewing the report filed by Richard
Kaplan, an independent disinterested person appointed by the court,
the court granted the Company's Motion to Dismiss the derivative
actions in Case No. 2022-83054; Joel Oppenheim et al vs. James E.
Burns, Leo Womack, Ivar Siem and Petrolia Energy Corporation; in
the 157th Judicial District Court, Harris County, Texas. It was
ordered that the proceeding be dismissed in its entirety and that
all claims by Joel Oppenheim et al be dismissed.
On April 10, 2024, the Company received notice that on April 8,
2024, the court issued an Order requested by Oppenheim for a
turnover order and appointment of post-judgment receiver (Mr. Seth
Kretzer), which turnover order and appointment of a receiver was
granted, and which receiver was authorized to take possession of,
and to sell leviable assets of the Company. The court also found
that an unpaid final judgment in favor of Oppenheim and against the
Company in the amount of $537,215, plus per diem interest in the
amount of $265 as of Jan. 1, 2023. The order provided the receiver
authority to take possession of, and to sell, the Company's
non-exempt, financial accounts, negotiation instruments, causes of
action, contract rights, accounts receivable, safety deposit boxes,
securities, vehicles, real or personal property (in the Slick Unit
Dutcher Sand Field and Utikuma Field), and all shares owned in
Petrolia Canada and Askarii Resources, LLC, all furniture,
fixtures, software or equipment and all documents, software or
records. The receiver's fee was set at 25% of the gross proceeds
of the assets coming into its possession, and the receiver was
authorized to seek and recover 125% of the judgment, plus
interest.
In the event the receivership and turnover order were to remain in
place, the receiver may sell a significant portion of the Company's
operating assets and/or liquidate the Company's properties, which
could force the Company to cease operating and/or seek bankruptcy
protection, the result of either of which could mean that the value
of the Company's securities become worthless.
The outcome of the above litigation is currently unknown; however,
the Company disputes the Defendants' counterclaims and the
allegations of the Intervenors and intends to defend the matter
vigorously, while also continuing to seek all damages which it is
due.
The Company is in discussions to raise additional funding through
the sale of debt or equity, to pay off the amounts owed to
Oppenheim and to fund additional litigation, which funding may not
be available on favorable terms, if at all, and may cause
significant dilution to existing stockholders. The information set
forth above does not constitute an offer to sell or a solicitation
of an offer to buy any securities of the Company nor shall there be
any sale of securities of the Company in any state or other
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such state. No securities of the Company
discussed above have been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements.
About Petrolia
Petrolia Energy Corporation is engaged in the exploration and
development of oil and gas properties. Petrolia explores for,
develops, and produces crude oil, natural gas liquids (NGLs) and
natural gas in producing basins in the United States of America and
Canada.
"The Company has suffered recurring losses from operations and
currently has a working capital deficit. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern. The Company plans to generate profits by reducing
overhead costs and reworking its existing oil or gas wells, funding
permitting. The Company may need to raise funds through either the
sale of its securities, issuance of corporate bonds, joint venture
agreements and/or bank financing to accomplish its goals," said
Petrolia in its Quarterly Report for the period ended Sept. 30,
2023.
PRESSURE BIOSCIENCES: All Four Proposals Passed at Special Meeting
------------------------------------------------------------------
Pressure BioSciences, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that it held a special meeting
in lieu of the annual meeting of stockholders at which the
stockholders:
(1) elected Richard T. Schumacher as a Class III director to
serve until the 2026 Annual Meeting of Stockholders;
(2) ratified the appointment of MaloneBailey LLP as the Company's
independent auditor for fiscal year 2023;
(3) approved the Pressure BioSciences, Inc. 2024 Equity Incentive
Plan; and
(4) approved, on an advisory basis, a non-binding resolution to
approve the compensation of the Company's named executive
officers.
About Pressure Biosciences
South Easton, Mass.-based, Pressure Biosciences Inc. --
http://www.pressurebiosciences.com-- develops and sells
innovative, broadly enabling, high pressure-based platform
technologies and related consumables for the worldwide life
sciences, agriculture, food and beverage, and other key
industries.
Pressure Biosciences reported a net loss of $16.08 million for the
year ended Dec. 31, 2022, compared to a net loss of $20.15 million
for the year ended Dec. 31, 2021.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
April 12, 2023, citing that the Company has suffered recurring
negative cash flows from operations and has a working capital
deficit that raises substantial doubt about its ability to continue
as a going concern.
Pressure Bioscience has experienced negative cash flows from
operations since its inception. As of September 30, 2023, the
Company did not have adequate working capital resources to satisfy
its current liabilities and as a result, it has substantial doubt
regarding its ability to continue as a going concern.
PRIEST ENTERPRISES: Hires Stonehenge Consulting as Accountant
-------------------------------------------------------------
Priest Enterprises, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Michigan to employ Stonehenge
Consulting, PLC as accountant.
The firm's services include:
a. giving accounting advice with respect to the business, its
operations, and the management of the property of the
Debtor-In-Possession;
b. preparing profit and loss statements, balance sheets, court
required reports, and tax returns on behalf of the Petitioner; and
c. performing all other accounting services for your Petitioner
which may be necessary.
The firm will be paid at an hourly rate of $225 for Lisa
Wisniewski, CPA, and $100 per hour for Megan Smith, Senior Staff
Accountant.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Lisa Wisniewski, a partner at Stonehenge Consulting, PLC, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Lisa Wisniewski
Stonehenge Consulting, PLC
6500 Byron Center Ave SW Suite 200
Byron Center, MI 49315
Tel: (616) 891-1147
About Priest Enterprises, LLC
Priest Enterprises, LLC offers property maintenance services,
including lawn care, landscaping, and snow removal.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Mich. Case No. 24-00677) on March 15,
2024. In the petition signed by Peter R. Priest III, president and
managing member, the Debtor disclosed $400,395 in total assets and
$1,140,036 in total liabilities.
Judge John T Gregg oversees the case.
Martin L. Rogalski, Esq., at MARTIN L. ROGALSKI, P.C., represents
the Debtor as legal counsel.
PROS HOLDINGS: Appoints Todd McNabb as Chief Revenue Officer
------------------------------------------------------------
PROS Holdings, Inc. on April 18, 2024, announced that Todd McNabb
has joined PROS as Chief Revenue Officer. Reporting to Andres
Reiner, PROS President and Chief Executive Officer, McNabb will
lead global go-to-market operations and be responsible for driving
scale as businesses continue to embrace digitization, automation,
and AI to drive profitable growth.
McNabb comes to PROS with more than 25 years of experience scaling
companies across diverse end-markets, with a strong track record of
driving revenue growth.
"Todd's exceptional leadership, backed by his remarkable history of
achievements, adds tremendous strength to our team," said Reiner.
"As we navigate this exciting time in PROS history, with businesses
increasingly looking to AI to drive operational excellence and
meaningful ROI, Todd's expertise will amplify our momentum. His
passion for people and innovation, along with his customer-centric
mindset, align seamlessly with our core values. We are thrilled to
welcome Todd to the team and I'm excited to work closely with
him."
McNabb has held executive go-to-market roles at ScienceLogic,
VMWare, and Virtustream, driving substantial growth and success. In
his most recent role as President and Chief Revenue Officer at
ScienceLogic, McNabb spearheaded the global growth strategy,
achieving remarkable year-over-year growth by transforming
go-to-market operations to drive scale across Sales, Pre-Sales,
Channel Partners, Customer Success and Support functions.
"PROS innovative, real-time AI platform is transforming the way
businesses do commerce and has earned PROS a unique position in the
greater landscape of AI-powered technologies in the market," said
McNabb. "As business leaders increasingly prioritize AI-driven
strategies for impactful business outcomes, the potential for
growth is undeniable. I am genuinely excited to join this brilliant
team and contribute my expertise towards advancing the company's
growth objectives."
In relation with the appointment, the Company entered into an
Employment Agreement with Mr. McNabb. Pursuant to the Agreement,
Mr. McNabb is entitled to an annual base salary of $450,000.00 per
year and is eligible to participate in the Company's employee bonus
plans as authorized by the Company's Board of Directors. The
Company's Compensation and Leadership Development Committee has
approved an annual incentive bonus target equal to 100% of Mr.
McNabb's base salary. Also, in connection with the commencement of
Mr. McNabb's employment, the CLD Committee approved certain equity
awards to Mr. McNabb pursuant to the Company's Amended and Restated
2017 Equity Incentive Plan. Mr. McNabb's base salary and annual
bonus opportunity are each subject to periodic review by the CLD
Committee. In the event Mr. McNabb's employment is terminated by
him for good reason, by us without cause, or we decide not to renew
his Agreement, provided Mr. McNabb delivers a general release, he
will receive (i) his full base salary each month for the following
12 months, (ii) any unpaid bonus earned prior to the termination
relating to periods preceding the date of termination, (iii) the
payment of a bonus at 100% of performance targets, including
discretionary components, within the bonus plan in effect as if
employed by us for 12 months, (iv) an amount equal to 12 times the
monthly cost of Mr. McNabb's health benefits, (v) the acceleration
of vesting of all equity awards with respect to such shares that
would have vested following the date of termination and prior to
the first anniversary of his termination date, and (vi) the
acceleration of vesting of all performance restricted stock awards
scheduled to vest prior to the first anniversary of his termination
date, where the applicable performance period is deemed to have
ended on his termination date.
Alternatively, if Mr. McNabb's employment is terminated by us
without cause, if he resigns for good reason, or we decide not to
renew his Agreement within six months prior to, or anytime after, a
change of control of the Company, provided Mr. McNabb delivers a
general release, he will receive (i) an amount equal to 150% of his
annual salary, (ii) any unpaid bonus earned prior to the
termination relating to periods preceding the date of termination,
(iii) the payment of an aggregate bonus equal to 100% of
performance targets, including discretionary components, within the
bonus plan in effect as if employed by us for 18 months, (iv) an
amount equal to 18 times the monthly cost of Mr. McNabb's health
benefits, and (v) the acceleration of vesting of all equity awards
with respect to such shares that would have vested following the
date of termination. If Mr. McNabb's employment with us terminates
due to his death or disability, his employment will automatically
terminate and he will be entitled to accelerated vesting of (i) all
equity awards with respect to all shares that would have vested
after the termination date, and (ii) all performance stock awards
at 100% of the target number granted. Mr. McNabb is subject to
non-competition and non-solicitation restrictions during the term
of his employment and for the 12-month period following the
termination of his employment. The foregoing description of the
Agreement is qualified in its entirety by reference to the full
text of the Agreement, which is filed as Exhibit 10.1 to this Form
8-K and is incorporated by reference herein.
Mr. McNabb is also a party to the Company's standard
indemnification agreement for officers and directors.
About PROS Holdings
Headquartered in Houston, Texas, PROS Holdings, Inc. (NYSE: PRO),
is a provider of AI-powered SaaS pricing, CPQ, revenue management,
and digital offer marketing solutions.
As of Sept. 30, 2023, the Company had $431.85 million in total
assets, $486.73 million in total liabilities, and a total
stockholders' deficit of $54.88 million.
Egan-Jones Ratings Company on October 9, 2023, maintained its
'CCC-' foreign currency and local currency senior unsecured ratings
on debt issued by PROS Holdings, Inc.
PROSPERITAS LEADERSHIP: Hires M. E. Henkel P.A. as Closing Agent
----------------------------------------------------------------
Prosperitas Leadership Academy, Inc. seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ M. E.
Henkel, P.A. as closing agent.
The firm will assist in the preparation of documents in relation to
the sale of the Debtor's real properties known as 2140 & 2100 W.
Washington St., Orlando, FL 32805.
The firm will be paid a fee of $7,500, plus costs, and the agent's
share of underwriting premium for the owner's title insurance.
Kristen L. Henkel, Esq., a partner at M. E. Henkel, P.A., disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Kristen L. Henkel, Esq.
M. E. Henkel, P.A.
3560 South Magnolia Avenue
Orlando, FL 32806
Tel: (407) 438-6738
Fax: (407) 858-9466
Email: khenkel@mehenkel.com
About Prosperitas Leadership Academy, Inc.
Prosperitas Leadership Academy, Inc. is a public charter school for
residents of Orange County, California.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-02443) on June 21,
2023. In the petition signed by Michael Spence, Board president,
the Debtor disclosed $2,009,763 in assets and $2,533,820 in
liabilities.
Judge Grace E. Robson oversees the case.
Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC, represents the
Debtor as legal counsel.
RAYMAN HOSPITALITY: Fitch Alters Outlook on 'BB-' IDR to Positive
-----------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of
Ryman Hospitality Properties, Inc. and its operating partnership,
RHP Hotel Properties, LP (collectively RHP) at 'BB-'. The Rating
Outlook has been revised to Positive from Stable.
Fitch has also affirmed RHP's senior secured at 'BB+'/'RR1' and
RHP's senior unsecured at 'BB-'/'RR4'.
The Positive Outlook reflects Fitch's expectations that REIT
leverage will remain below 4.5x, which Fitch believes is consistent
with a 'BB' rating given both the REIT and lodging attributes of
Ryman. It also reflects the improvement in Ryman's operating and
financial profile over the last couple of years. Since 2018 when
Fitch initiated RHP's rating at 'BB-', the company has expanded to
include six large group hotels, transitioned to a greater unsecured
basis, added revenues of over $700 million, and improved margins.
This speaks to the overall viability of the business model of
catering to large group travel with longer booking windows.
As compared to its lodging peers, the revenue visibility provided
by group business is a key differentiator that Fitch believes to
somewhat ease cash flow volatility. It however does not absolve the
lodging cyclicality and general demand concentration risk of a
single subsector, group and convention.
KEY RATING DRIVERS
Improved Financial Structure: RHP has demonstrated consistent
access to capital markets most recently with its $1,000 million
unsecured notes offering in March 2024. The notes were priced at
6.5% which resulted in interest cost savings and supports the
investor appetite for RHP's offerings. Since 2020, RHP has accessed
the unsecured market 4x, highlighting the underlying balance sheet
changes and through the cycle access at competitive rates on an
unsecured basis.
The unsecured issuance was also consistent with the company working
to unencumber its portfolio. The transition to a greater unsecured
financial structure is in line with its hotel REIT peers and
demonstrates RHP's strengthened capital access. The current
unencumbered pool consists of all properties with the exception of
the Gaylord Opryland and Texan both of which have equity pledges
Fitch views as full encumbrances. As these two properties represent
the largest share of operating EBITDA for Ryman, further action to
unencumber would significantly increase the unencumbered asset
pool.
Enhanced Leverage Profile: Fitch projects natural deleveraging
resulting from EBITDA growth through the forecast period. For the
year ended 2023 Ryman's REIT leverage was 4.2x, at the lower end of
the company's policy of 4x to 4.5x. Fitch considers both the REIT
and lodging aspects when determining the appropriate sensitivities
to rate Ryman through the cycle given where the business model has
evolved into today.
Strength in Group Business: RHP has continued to capture group
demand at attractive rates without compromising occupancy,
evidenced by the yoy ADR growth of 3.7% for 2023. This momentum
continues into 2024 as the projected revenue on the books for
future periods exceeds pre-pandemic metrics, with roughly 51% of
same-store occupancy on the books entering into 2024. This is
further evidenced by same-store RevPAR guidance inclusive of
renovation disruptions at a midpoint of 4.5% for full year 2024.
RHP has successfully rotated customers within brand offerings to
support group retention, which offers a recurring revenue stream.
Over the last two years, roughly 69% of new group room nights
production was made up of retention group business. Ryman works
exclusively with Marriott in managing their hotels which can be
viewed as a lack of diversification. However, in the case of RHP it
reinforces consistent customer service across properties and drives
that repeat group business. This aligns with the overall strategy
to focus on the large group customer loyalty.
Well-Positioned Quality Portfolio: RHP owns a high-quality,
concentrated portfolio of six specialized hotels competitively
positioned within the large group destination resort market. The
company's smallest large group hotel has 1,002 rooms, and five of
its six largest hotels rank within the 6 largest non-gaming U.S.
hotels as measured by exhibit and meeting space square footage. The
low existing and incoming supply of large group hotels sets RHP
well to capture growing group demand.
Ryman has announced various renovation projects to be completed
over the next couple of years which will further enhance their
niche property offerings. The company's liquidity position enables
reinvestment to maintain strong property quality that can command
higher ADRs. Fitch forecasts elevated capex spend over the next few
years to account for various renovation spend which Fitch expects
will generate stronger rates and occupancies beginning in 2027.
Volatile Industry with Buffers: Fitch views RHP's forward booking
window positively as it provides visibility to future cash flows.
The average booking window of 2.7 years is a differentiator as
compared to its hotel REIT peers. This can act as a buffer during a
downturn particularly with cancellation and attrition fees.
Although this does help mitigate risk it does not absolve it as the
hotel industry is highly cyclical.
Hotels re-price their inventory daily, resulting in the shortest
lease terms and least stable cash flows within commercial real
estate. Economic cycles and exogenous events (i.e. acts of
terrorism) have historically caused or exacerbated industry
downturns. RHP's exposure to primarily group and convention makes
it highly dependent on one sub-sector's demand. Overall industry
cyclicality and demand concentration exposes Ryman to duration risk
as compared to REITs with long-term leases.
Parent Subsidiary Linkage: Fitch rates the IDRs of the parent REIT
and subsidiary operating partnership on a consolidated basis, using
the weak parent/strong subsidiary approach under its "Parent and
Subsidiary Linkage Criteria." Open access and control factors are
strong, based on the entities operating as a single enterprise with
strong legal and operational ties.
DERIVATION SUMMARY
Ryman's most closely rated peer is Host Hotels and Resorts
(BBB/Stable), another lodging REIT. As compared to HST, RHP
operates a more concentrated portfolio in terms of geography,
price/amenity, brand and property manager. However, RHP's focus on
the group and convention segment with longer booking windows that
provide cash flow visibility is a credit positive. In addition,
attrition fees and rebooking windows help to buffer cash flow
cyclicality in an overall volatile industry.
HST's brand offerings are diversified across Hyatt, Hilton,
Marriott, Four Seasons and Accor as compared to Ryman working
solely with Marriott. The single property manager means less
diversified offerings, however it has been advantageous in driving
recurring business. RHP's asset concentration within the large
group hotel is also well positioned from an existing and future
supply standpoint given the capital intensity.
HST is larger in scale, primarily in gateway markets, and 99%
unencumbered providing comfort over ability to raise large amounts
of secured debt quickly if needed. Ryman's recent issuances have
meaningfully unencumbered assets, progressing towards the balance
sheets of investment grade REIT peers which Fitch views positively.
Over the past four year, Ryman has issued four unsecured bonds as
well as refinance their existing facility secured by two equity
pledges. This has demonstrated consistent access to the market
through common equity, private placement unsecured bonds and bank
debt, secured debt, and joint ventures
KEY ASSUMPTIONS
- Base interest rates applicable to the company's outstanding
variable rate debt obligations reflects current SOFR forward
curve;
- Low to mid-single digit RevPAR growth through forecast period;
- Annual capex spend of $400M through forecast period;
- Mid- to high single-digit dividend growth through forecast
period.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation for REIT leverage to remain below 4.5x;
- Unencumber remaining assets including equity pledges on
subsidiaries;
- Sustained improvement in EBITDA margins.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation for REIT leverage to sustain above 5.0x;
- Entertainment spinoff that results in elevated leverage;
- Prolonged capital investment with minimal return and thus
elevated leverage.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Well-Positioned: As of Dec. 31, 2023, RHP had $591.8
million in unrestricted cash and an aggregate amount of $745.5
million available on its company and OEG revolving credit
facilities. Ryman's ability to demonstrate consistent access to
capital markets at sustainable rates from a multitude of sources
supports its solid balance sheet position.
Most recently in March 2024, RHP issued $1 billion senior unsecured
notes priced at 6.5% due in 2032. Proceeds were used to paydown the
$800 million Gaylord Rockies term loan as well as a net paydown of
$200 million on the term loan B. These actions push out the next
maturity until 2026 when the Block 21 CMBS loan comes due. It also
increased the weighted average years to 5.5 years as compared to
4.3 years and decreased annual cash interest expense.
Fitch views the replacement of secured debt with unsecured debt
positively as it improves the company's unsecured asset pool. This
pool includes all hotels with the exception of Gaylord Opryland and
Gaylord Texan, the two largest hotels by EBITDA. Fitch will
consider future unencumbering of equity pledges to have a
meaningful impact on the company's unsecured credit profile.
ISSUER PROFILE
RHP is a lodging and hospitality REIT specializing in upscale
convention center resorts and country music entertainment
experiences. It owns five of the top six largest non-gaming
convention center hotels in the United States based on total indoor
meeting space under the Gaylord Hotels brand and managed by
Marriott International.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Ryman Hospitality
Properties, Inc. LT IDR BB- Affirmed BB-
RHP Hotel
Properties, L.P. LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR1 BB+
REKOR SYSTEMS: Files Charter Amendment With Del. Secretary of State
-------------------------------------------------------------------
Rekor Systems, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on April 22, 2024,
following the previously reported adoption by its stockholders of
an amendment to the Company's Amended and Restated Certificate of
Incorporation, as amended, to increase the number of authorized
shares of common stock from 100,000,000 to 300,000,000 at the
Company's 2024 annual meeting of stockholders held on April 18,
2024, the Company filed the Charter Amendment with the Secretary of
State of Delaware. The number of authorized shares of the
Company's preferred stock was not affected by this amendment and
remained unchanged at 2,000,000 shares.
Certain possible effects of such increase in the total number of
authorized shares of common stock are described in the Company's
definitive proxy statement on Schedule 14A for the Annual Meeting,
filed with the Securities and Exchange Commission on March 25,
2024, which description is incorporated herein by reference.
Abour Rekor Systems
Rekor Systems, Inc., headquartered in Columbia, MD, is working to
revolutionize public safety, urban mobility, and transportation
management using AI-powered solutions designed to meet the distinct
demands of each market it serves. The Company works hand-in-hand
with its customers to deliver mission-critical traffic and
engineering services that assist them in achieving their goals.
The Company's vision is to improve the lives of citizens and the
world around them by enabling safer, smarter, and greener roadways
and communities. The Company works towards this by collecting,
connecting, and organizing mobility data, and making it accessible
and useful to its customers for real-time insights and decisioning
for situational awareness, rapid response, risk mitigation, and
predictive analytics for resource and infrastructure planning and
reporting.
East Hanover, NJ-based Marcum LLP, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
March 25, 2024, citing that the Company has incurred significant
losses and may need to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
RENALYTIX PLC: All Four Proposals Passed at General Meeting
-----------------------------------------------------------
Renalytix plc disclosed in a Form 8-K filed with the Securities and
Exchange Commission that the Company held a general meeting of
shareholders on April 22, 2024 at which the shareholders:
(1) authorized the allotment of ordinary shares of GBP0.0025
each
in the capital of the Company up to an aggregate nominal
amount of GBP67,039.6025 (26,815,841 ordinary shares);
(2) authorized the allotment of shares and the grant of rights
to
subscribe for, or convert any security into, shares of the
Company up to an aggregate nominal amount of GBP128,391 and
the allotment of further equity securities up to an
aggregate
nominal amount of GBP122,277 in connection with a
pre-emptive
offer in favor of shareholders;
(3) authorized (i) the disapplication of statutory pre-emption
rights for the issue and allotment of the Second Tranche
Placing Shares and (ii) shareholder approval pursuant to the
Nasdaq 20% Rule; and
(4) authorized the disapplication of pre-emption rights limited
to shares of a maximum aggregate nominal amount of
GBP128,391.
About Renalytix
Headquartered in United Kingdom, Renalytix (LSE: RENX) (NASDAQ:
RNLX) -- www.renalytix.com -- is focused on providing doctors
around the world with a safe, reliable and effective tool to
identify which patients are or are not in danger of losing
significant kidney function and falling into kidney failure and may
require long-term dialysis or kidney transplant. Chronic kidney
disease is one of the largest urgent medical needs, globally
affecting an estimated 850 million people, and is responsible for
an unsustainable and growing societal cost burden.
Renalytix reported a net loss of $45.61 million for the 12 months
ended June 30, 2023, compared to a net loss of $45.28 million for
the 12 months ended June 30, 2022.
Iselin, New Jersey-based Ernst & Young LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated Sept. 28, 2023, citing that the Company has suffered
recurring losses and negative cash flows from operations, expects
to incur additional losses and require substantial additional
capital to fund its operations, and has stated that substantial
doubt exists about the Company's ability to continue as a going
concern.
Renalytix said in its Quarterly Report for the period ended Dec.
31, 2023, that "The Company has incurred recurring losses and
negative cash flows from operations since inception and had an
accumulated deficit of $197.0 million as of December 31, 2023. The
Company anticipates incurring additional losses until such time, if
ever, that it can generate significant sales of KidneyIntelX or any
future products currently in development.
"As a result of its losses and projected cash needs, substantial
doubt exists about the Company's ability to continue as a going
concern. Substantial additional capital will be necessary to fund
the Company's operations, expand its commercial activities and
develop other potential diagnostic related products. The Company
is seeking additional funding through public or private equity
offerings, debt financings, other collaborations, strategic
alliances and licensing arrangements. The Company may not be able
to obtain financing on acceptable terms, or at all, and the Company
may not be able to enter into strategic alliances or other
arrangements on favorable terms, or at all. The terms of any
financing may adversely affect the holdings or the rights of the
Company's shareholders. If the Company is unable to obtain
funding, the Company may not be able to meet its obligations and
could be required to delay, curtail or discontinue research and
development programs, product portfolio expansion or
commercialization efforts, which could adversely affect its
business prospect."
RENALYTIX PLC: Raises $0.5 Million Through Partial Option Exercise
------------------------------------------------------------------
Renalytix plc disclosed in a Form 8-K filed with the Securities and
Exchange Commission that on April 18, 2024, DB Capital Partners
Healthcare, L.P. partially exercised the option to purchase
1,333,334 ordinary shares. The net proceeds to the Company from
the sale of the Subsequent Tranche Shares is approximately $0.5
million, before deducting estimated offering expenses payable by
the Company.
On April 5, 2024, Renalytix entered into a securities purchase
agreement with DB Capital pursuant to which the Company agreed to
issue and sell, in a registered direct offering, 2,666,667 ordinary
shares, nominal value GBP0.0025 per share.
In connection with the Registered Direct Offering, and pursuant to
the Purchase Agreement, the Company granted the Purchaser an option
to purchase up to 7,811,696 additional ordinary shares at the
offering price of $0.375 per ordinary share, with such option
exercisable until April 17, 2024. On April 19, 2024, the Company
and the Purchaser entered into a letter agreement which extended
the exercise period of the Option to April 22, 2024.
About Renalytix
Headquartered in United Kingdom, Renalytix (LSE: RENX) (NASDAQ:
RNLX) -- www.renalytix.com -- is focused on providing doctors
around the world with a safe, reliable and effective tool to
identify which patients are or are not in danger of losing
significant kidney function and falling into kidney failure and may
require long-term dialysis or kidney transplant. Chronic kidney
disease is one of the largest urgent medical needs, globally
affecting an estimated 850 million people, and is responsible for
an unsustainable and growing societal cost burden.
Renalytix reported a net loss of $45.61 million for the 12 months
ended June 30, 2023, compared to a net loss of $45.28 million for
the 12 months ended June 30, 2022.
Iselin, New Jersey-based Ernst & Young LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated Sept. 28, 2023, citing that the Company has suffered
recurring losses and negative cash flows from operations, expects
to incur additional losses and require substantial additional
capital to fund its operations, and has stated that substantial
doubt exists about the Company's ability to continue as a going
concern.
Renalytix said in its Quarterly Report for the period ended Dec.
31, 2023, that "The Company has incurred recurring losses and
negative cash flows from operations since inception and had an
accumulated deficit of $197.0 million as of December 31, 2023. The
Company anticipates incurring additional losses until such time, if
ever, that it can generate significant sales of KidneyIntelX or any
future products currently in development.
"As a result of its losses and projected cash needs, substantial
doubt exists about the Company's ability to continue as a going
concern. Substantial additional capital will be necessary to fund
the Company's operations, expand its commercial activities and
develop other potential diagnostic related products. The Company
is seeking additional funding through public or private equity
offerings, debt financings, other collaborations, strategic
alliances and licensing arrangements. The Company may not be able
to obtain financing on acceptable terms, or at all, and the Company
may not be able to enter into strategic alliances or other
arrangements on favorable terms, or at all. The terms of any
financing may adversely affect the holdings or the rights of the
Company's shareholders. If the Company is unable to obtain
funding, the Company may not be able to meet its obligations and
could be required to delay, curtail or discontinue research and
development programs, product portfolio expansion or
commercialization efforts, which could adversely affect its
business prospect."
RENALYTIX PLC: Thomas McLain to Resign as President
---------------------------------------------------
Renalytix plc disclosed in a Form 8-K filed with the Securities and
Exchange Commission that Thomas McLain notified the Company that he
will resign as president of the Company, effective April 30, 2024.
Upon his resignation, Mr. McLain, in accordance with the terms of
his Severance Agreement dated April 17, 2024, will receive (i) his
base salary for a period of six months following the Separation
Date; (ii) contributions to the cost of health care continuation
under the COBRA benefits until the earliest of (a) April, 2025, (b)
the date Mr. McLain becomes eligible for substantially equivalent
health insurance coverage in connection with new employment or
self-employment, or (c) the date that Mr. McLain ceases to be
eligible for COBRA continuation coverage for any reason including
plan termination; (iii) a pro rata portion of his annual bonus for
the fiscal year ending June 30, 2024, (iv) with respect to those
stock options that are already vested as of the Separation Date,
the ability to exercise those stock options through the original
term of the applicable stock option and (v) accelerated vesting of
a portion of Mr. McLain's outstanding stock options equal to the
number of stock options that would have vested if he had continued
to be employed by the Company for 12 months following the
Separation Date, which will become vested as of the Separation
Date. Mr. McLain's receipt of these benefits is contingent upon Mr.
McLain's continued compliance with ongoing obligations provided for
under the Severance Agreement, including non-disparagement
obligations and a general release of claims.
Appointment of Howard Doran as President
On April 23, 2024, the Company's Board of Directors appointed
Howard Doran, currently the Company's chief business officer, to
serve as the Company's president, effective as of April 30, 2024.
In connection with Mr. Doran's appointment, the Board approved, at
the recommendation of the Compensation Committee of the Board,
certain changes to Mr. Doran's compensation upon the effectiveness
of his promotion to president, including an increase in Mr. Doran's
annual base salary to $350,000 from $300,000.
About Renalytix
Headquartered in United Kingdom, Renalytix (LSE: RENX) (NASDAQ:
RNLX) -- www.renalytix.com -- is focused on providing doctors
around the world with a safe, reliable and effective tool to
identify which patients are or are not in danger of losing
significant kidney function and falling into kidney failure and may
require long-term dialysis or kidney transplant. Chronic kidney
disease is one of the largest urgent medical needs, globally
affecting an estimated 850 million people, and is responsible for
an unsustainable and growing societal cost burden.
Renalytix reported a net loss of $45.61 million for the 12 months
ended June 30, 2023, compared to a net loss of $45.28 million for
the 12 months ended June 30, 2022.
Iselin, New Jersey-based Ernst & Young LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated Sept. 28, 2023, citing that the Company has suffered
recurring losses and negative cash flows from operations, expects
to incur additional losses and require substantial additional
capital to fund its operations, and has stated that substantial
doubt exists about the Company's ability to continue as a going
concern.
Renalytix said in its Quarterly Report for the period ended Dec.
31, 2023, that "The Company has incurred recurring losses and
negative cash flows from operations since inception and had an
accumulated deficit of $197.0 million as of December 31, 2023. The
Company anticipates incurring additional losses until such time, if
ever, that it can generate significant sales of KidneyIntelX or any
future products currently in development.
"As a result of its losses and projected cash needs, substantial
doubt exists about the Company's ability to continue as a going
concern. Substantial additional capital will be necessary to fund
the Company's operations, expand its commercial activities and
develop other potential diagnostic related products. The Company
is seeking additional funding through public or private equity
offerings, debt financings, other collaborations, strategic
alliances and licensing arrangements. The Company may not be able
to obtain financing on acceptable terms, or at all, and the Company
may not be able to enter into strategic alliances or other
arrangements on favorable terms, or at all. The terms of any
financing may adversely affect the holdings or the rights of the
Company's shareholders. If the Company is unable to obtain
funding, the Company may not be able to meet its obligations and
could be required to delay, curtail or discontinue research and
development programs, product portfolio expansion or
commercialization efforts, which could adversely affect its
business prospect."
RESOURCE FOR EDUCATION: Mark Sharf Named Subchapter V Trustee
-------------------------------------------------------------
The U.S. Trustee for Region 16 appointed Mark Sharf, Esq., a
practicing attorney in Los Angeles, as Subchapter V trustee for
Resource for Education, Advocacy, Communication and Housing.
Mr. Sharf will charge $660 per hour for his services as Subchapter
V trustee and $150 per hour for his trustee administrator's
services. In addition, the Subchapter V trustee will seek
reimbursement for work-related expenses incurred.
Mr. Sharf declared that he is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Mark Sharf, Esq.
6080 Center Drive, 6th Floor
Los Angeles, CA 90045
Telephone: (323) 612-0202
Email: mark@sharflaw.com
About Resource For Education, Advocacy,
Communication and Housing
Resource for Education, Advocacy, Communication and Housing sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
C.D. Calif. Case No. 23-12429) on November 17, 2023. In the
petition signed by Adriana Garcia, chief executive officer, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Scott C. Clarkson oversees the case.
Matthew W. Grimshaw, Esq., at Marshack Hays Wood LLP, is the
Debtor's legal counsel.
ROYAL JET: Hires Law Offices of Alla Kachan P.C. as Counsel
-----------------------------------------------------------
Royal Jet Car Corp. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Law Offices of Alla
Kachan, P.C. as counsel.
The firm will provide these services:
a. assist the Debtor in administering the bankruptcy case;
b. make such motions or taking such action as may be
appropriate or necessary under the Bankruptcy Code;
c. represent the Debtor in prosecuting adversary prosecuting
to collect assets of the estate such other actions as Debtor deem
appropriate;
d. take such steps as may be necessary for Debtor to marshal
and protect the estate's assets;
e. negotiate with Debtor's creditors in formulating a plan of
reorganization for Debtor in this case;
f. draft and prosecute the confirmation of Debtor's plan of
reorganization in this case; and
g. render such additional services as Debtor may require in
the bankruptcy case.
The firm will be paid at these rates:
Attorney $475 per hour
Clerk and Paraprofessional $250 per hour
The Debtor paid the firm a retainer in the amount of $11,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Alla Kachan, a partner at Law Offices of Alla Kachan, P.C.,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Alla Kachan, Esq.
Law Offices Of Alla Kachan, P.C.
2799 Coney Island Avenue., Suite 202
Brooklyn, NY 11235
Telephone: (718) 513-3145
Email: alla@kachanlaw.com
About Royal Jet Car Corp.
Royal Jet Car Corp. sought protection for relief under CHapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-42508) on July
18, 2023, listing up to $50,000 in assets and $100,001 to $500,000
in liabilities.
Judge Jil Mazer-Marino presides over the case.
Alla Kachan, Esq. at the Law Offices Of Alla Kachan P.C. represents
the Debtor as counsel.
SB PROPERTY: Hires Mike J. Urquhart, Esq. as Special Counsel
------------------------------------------------------------
SB Property Group LLC seeks approval from the U.S. Bankruptcy Court
for the Middle District of Tennessee to employ Mike J. Urquhart,
Esq., an attorney practicing in Goodlettsville, Tennessee, as
special counsel.
The professional will provide legal assistance to the Debtor in
connection with the Proof of Claim filed by Interested Party Clair
Moreau, and the 2004 examination of the Debtor's representative
Bruce Little Jr.
The attorney will be paid based upon its normal and usual hourly
billing rates. He will also be reimbursed for reasonable
out-of-pocket expenses incurred.
As disclosed in a court filing that Mike J. Urquhart, Esq. is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Mike J. Urquhart, Esq.
121 East Cedar Street
Goodlettsville, TN 37072
About SB Property Group LLC
SB Property Group, LLC, is the owner of six properties located in
Nashville and Franklin, Tenn., having a total current value of
$5.47 million.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-04528) on Dec. 11,
2023, with $5,475,000 in assets and $1,100,015 in liabilities. Glen
Watson, Esq., at Watson Law Group, PLLC serves as Subchapter V
trustee.
Judge Marian F. Harrison oversees the case.
Keith D. Slocum, Esq., at Slocum Law, is the Debtor's bankruptcy
counsel.
SELECTIS HEALTH: Secures $750K Loan From Southern Bank
------------------------------------------------------
Selectis Health, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that it entered into a
Commercial Line of Credit Agreement and Note with Southern Bank for
a line of credit in the principal amount limit of $750,000 at a
fixed interest rate of 8.50% per annum with a Maturity Date of
April 12, 2025. A copy of the Commercial Line of Credit Agreement
and Note is filed available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000727346/000149315224015664/form8-k.htm
About Selectis Health
Headquartered in Greenwood Village, Colo., Selectis Health, Inc.
owns and operates, through wholly-owned subsidiaries, assisted
living facilities, independent living facilities, and skilled
nursing facilities across the South and Southeastern portions of
the US. In 2019 the Company shifted from leasing long-term care
facilities to third-party, independent operators towards a model
where a wholly owned subsidiary would operate but is owned by
another wholly owned subsidiary.
Costa Mesa, CA-based Marcum LLP, the Company's auditor since 2022,
issued a "going concern" qualification in its report dated April
15, 2024, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
SMOKE SHOWIN': Unsecureds Will Get 3.4% of Claims over 3 Years
--------------------------------------------------------------
Smoke Showin' Catering, LLC, d/b/a/ Station House BBQ, filed with
the U.S. Bankruptcy Court for the Middle District of Florida a Plan
of Reorganization for Small Business dated April 15, 2024.
The Debtor operates a barbecue restaurant brand called Station
House BBQ. Station House BBQ was founded by firefighters, initially
focused on catering events throughout Tampa Bay. In 2019, Station
House BBQ opened its first brick-and-mortar location at 16319 N.
Florida Avenue in Lutz, Florida (the "Lutz Location").
The space ultimately proved to be too large, and Station House BBQ
began operating at the location alongside different restaurant
concepts and a commissary, similar to a "food hall" concept.
Additionally, beginning in the fall of 2023, the Debtor began
operating a food truck at the Lowery Park Zoo through its wholly
owned subsidiary, Station House Zoo, LLC (the "Zoo Location").
Like many small businesses across the country, beginning in March
2020, the Debtor suffered financial difficulties due to the global
COVID-19 pandemic. During this period, the Debtor turned to debt
financing to carry its operations through the downturn, including
short-term funding sources with high cost of capital known as
"merchant cash advance" ("MCA") funding with various companies.
This, however, only served to further the Debtor's problems as the
daily and weekly payments to MCA funders began siphoning the
Debtor's cash flow.
As a result of these issues, the Debtor's financial difficulties
mounted such that this chapter 11 case became the best alternative
to allow the Debtor to restructure its obligations and reorganize
for the benefit of all creditors.
Since the filing of its chapter 11 case, however, the Debtor has
suffered additional setbacks. The building where the Lutz Location
operated was sold in February 2024. Salt Smokehouse, LLC, which
took over the lease obligations and began operating the food hall
and commissary concept, was unable to reach agreement on lease
terms with the new owner of the building. As a result, in March
2024, the Debtor was forced to cease operating at the Lutz
Location. Since that time, the Debtor has been working to relocate
and restructure its operations. However, at present, the Debtor is
only operating the Zoo Location.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow from operations.
Non-priority unsecured creditors holding allowed claims will
receive distributions from the Debtor's projected disposable income
over the three years following the Effective Date of the Plan.
Based on the Debtor's projected disposable income over the
three-year period after the Effective Date, unsecured creditors are
projected to receive approximately 3.4% of their unsecured claim
amount based on timely filed claims to date. This estimated
percentage may ultimately change (upwards or downwards) based on
the outcome of the Debtor's claim objections and the allowance and
disallowance of claims. The plan also provides for the payment of
administrative and priority claims.
Class 12 consists of all nonpriority unsecured claims. Every holder
of a non-priority unsecured claim against the Debtor shall receive
its pro-rata share of 3 annual payments of $10,000, for a total
distribution to holders of Class 12 allowed unsecured claims
equaling $30,000. Payments shall be made annually on the last day
of the month following the anniversary of the Effective Date (for
example, if the Effective Date occurs June 15, 2024, the first
annual payment will be made on June 30, 2025).
As set forth on this Plan, the Debtor projects that total
distributions to unsecured creditors exceeds the Debtor's projected
disposable income as defined by Section 1191(d) of the Bankruptcy
Code, after payment of administrative, priority tax, and secured
claims, for a three-year period following the Effective Date. Class
12 claims are impaired by the Plan.
Class 13 consists of all equity interests in the Debtor. The
existing equity holders will retain their equity interests in the
Debtor.
Payments required under the Plan will be funded from revenues
generated by continued operations.
A full-text copy of the Plan of Reorganization dated April 15, 2024
is available at https://urlcurt.com/u?l=zpzh3r from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Matthew B. Hale, Esq.
STICHTER, RIEDEL, BLAIN & POSTLER, P.A.
110 East Madison Street, Suite 200
Tampa, Florida 33602
Telephone: (813) 229-0144
Facsimile: (813) 229-1811
Email: mhale@srbp.com
About Smoke Showin' Catering
Smoke Showin' Catering, LLC operates a barbecue restaurant brand
called Station House BBQ.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-05461) on Dec. 1,
2023, with $100,001 to $500,000 in assets and $500,001 to $1
million in liabilities.
Judge Catherine Peek McEwen oversees the case.
Matthew B. Hale, Esq., at Stichter, Riedel, Blain & Postler
represents the Debtor as legal counsel.
SPI ENERGY: Receives Nasdaq Non-Compliance Notice
-------------------------------------------------
SPI Energy Co., Ltd. announced that it received a notice from the
Listing Qualifications Department of The Nasdaq Stock Market LLC
notifying the Company that due to the Company's failure to timely
file its Annual Report on Form 10-K for the fiscal year ended Dec.
31, 2023, with the Securities and Exchange Commission, the Company
is not in compliance with Nasdaq's continued listing requirements
under Nasdaq Listing Rule 5250(c)(1), which requires the timely
filing of all required periodic reports with the SEC.
The Notice has no immediate effect on the listing of the Company's
ordinary shares on Nasdaq. Under the Nasdaq rules, the Company has
60 calendar days, or until June 18, 2024, to file the 2023 Form
10-K or to submit to Nasdaq a plan to regain compliance with the
Nasdaq Listing Rule. If the Company submits a plan to Nasdaq and
Nasdaq accepts the plan, Nasdaq can grant an exception of up to 180
calendar days from the filing's due date, or until Oct. 14, 2024,
to regain compliance. If the Company fails to timely regain
compliance with Nasdaq Listing Rule 5250(c)(1), the Company's
ordinary shares will be subject to delisting from Nasdaq.
The Company continues to work diligently to complete the 2023 Form
10-K.
About SPI Energy Co.
SPI Energy Co., Ltd. is a global provider of photovoltaic (PV)
solutions for business, residential, government and utility
customers and investors. The Company develops solar PV projects
which are either sold to third party operators or owned and
operated by the Company for selling of electricity to the grid in
multiple countries in Asia, North America and Europe.
SPI Energy reported a net loss of $1.89 million for the three
months ended Sept. 30, 2023, compared to a net loss of $13.49
million for the three months ended Sept. 30, 2022. As of Sept. 30,
2023, the Company had $230.19 million in total assets, $214.19
million in total liabilities, and $16 million in total equity.
New York, New York-based Marcum Asia CPAs LLP, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 14, 2023, citing that the Company has a
significant working capital deficit, has incurred significant
losses and needs to raise additional funds to sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
The Company suffered a net loss of $5.6 million during the nine
months ended September 30, 2023 from continuing operations. As of
September 30, 2023, there was net working capital deficit of $114.7
million and accumulated deficit of $684.7 million. These factors
raise substantial doubt as to its ability to continue as a going
concern, according to the Company's Quarterly Report for the period
ended Sept. 30, 2023.
STICKY'S HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Twenty affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Sticky's Holdings LLC (Main Case) 24-10856
24 East 23rd Street
New York NY 10010
Sticky Fingers LLC 24-10857
Sticky Fingers II LLC 24-10858
Sticky Fingers III LLC 24-10859
Sticky Fingers IV LLC 24-10860
Sticky Fingers V LLC 24-10861
Sticky Fingers VI LLC 24-10862
Sticky's BK 1 LLC 24-10863
Sticky's NJ 1 LLC 24-10864
Sticky Fingers VII LLC 24-10865
Sticky's NJ II LLC 24-10866
Sticky Fingers IX LLC 24-10867
Sticky's NJ III LLC 24-10868
Sticky Fingers VIII LLC 24-10869
Sticky's NJ IV LLC 24-10870
Sticky's WC 1 LLC 24-10871
Sticky's Franchise LLC 24-10872
Sticky's PA GK I LLC 24-10873
Stickys Corporate LLC 24-10874
Sticky's IP LLC 24-10875
Business Description: The Debtors operate a chain of restaurants
in New York and New Jersey, focusing
primarily on selling high quality chicken
fingers and sandwiches. Sticky's uses only
the finest ingredients in making its
products, including fresh, never frozen,
antibiotic-free chicken. Sticky's Holdings
LLC is the Debtors' parent company.
Chapter 11 Petition Date: April 25, 2024
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. J. Kate Stickles added to case (SH)
Debtors' Counsel: John W. Weiss, Esq.
Joseph C. Barsalona II, Esq.
PASHMAN STEIN WALDER HAYDEN, P.C.
1007 North Orange Street, 4th Floor, Suite 183
Wilmington, DE 19801-1242
Tel: (302) 592-6496
Email: jweiss@pashmanstein.com
jbarsalona@pashmanstein.com
- and -
Richard C. Solow, Esq.
Katherine R. Beilin, Esq.
Court Plaza South, East Wing
21 Main Street, Suite 200
Hackensack, NJ 07601
Phone: (201) 488-8200
Email: rsolow@pashmanstein.com
kbeilin@pashmanstein.com
Lead Debtor's
Total Assets as of Dec. 25, 2023: $5,754,177
Lead Debtor's
Total Liabilities as of Dec. 25, 2023: $4,677,476
The petitions were signed by Jamie Greer as CEO.
A full-text copy of Sticky Fingers LLC's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/I2RDDFQ/Sticky_Fingers_LLC__debke-24-10857__0001.0.pdf?mcid=tGE4TAMA
List of Lead Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. US Foods Trade $449,963
1051 Amboy Avenue
Perth Amboy, NJ 08861
Attn: Mark Tarr
Phone: 267-251-9936
Email: mark.tarr@usfoods.com
2. Leason Ellis LLP Legal Services $247,193
One Barker Avenue
White Plains, NY 10601
Attn: Cameron Reuber
Phone: 914-288-0022
Email: Accounting@leasonellis.com
3. Michael Best & Friedrich LLP Legal Services $49,947
444 West Lake Street, Suite 3200
Chicago, IL 60606
Attn: A. Goldblatt
Phone: 312-222-0800
Email: MICHAELBEST_billing@igdsystems.com
4. Rockfeld Group One Madison LLC Lease $48,579
C/O JSRE Management, LLC
550 5th Avenue 4th Floor
New York, NY 10036
Attn: George Rrukaj
Phone: 212-756-8094
Email: georger@jsrellc.com
5. ResQ Trade $35,425
18 King St. East St 700
Toronto ON
Canada
Attn: Coby Stronach
Phone: 844-737-7349
Email: accounting@getresq.com
6. Davis & Gilbert LLP Legal Services $17,209
1675 Broadway
New York, NY 10019
Attn: Daniel Dingerson
Phone: 212-468-4800
Email: jheatherton@dglaw.com
7. Restaurant365, LLC Trade $13,895
500 Technology Drive, Suite 200
Irvine, CA 9261
Attn: Gina Ratini
Phone: 630-217-8566
Email: gratini@restaurant365.com
8. AmTrust North America, Inc. Insurance $8,232
PO Box 6939
Cleveland, OH 44101
Attn: Kathleen Mangulabnan
Phone: 877-528-7878
Email: service@amtrustgroup.com
9. DoorDash, Inc. Trade $5,750
303 2nd Street
San Francisco, CA 94107
Attn: Amanda Resendes
Phone: 508-269-6909
Email: amanda.resendes@doordash.com
10. Ludlow Creative Trade $5,200
48 Lawridge Drive
New York, NY 10573
Attn: Luca Rietti
Phone: 914-329-9538
Email: lr@ludlowcreative.com
11. Restaurant Technologies, Inc. Vendor $4,611
12962 Collections Center Dr
Chicago, IL 60693
Attn: Jose Mieles
Phone: 1-888-769-4997
Email: jmieles@rti-inc.com
12. W.B. Mason Company Inc. Vendor $4,069
59 Centre Street
Brockton, MA 0230
Attn: Mike Gualtier
Phone: 1-888-926-2766
Email: mike.gualtier@wbmason.com
13. Con Ed (Consolidated Edison Utility $3,640
Company of New York, Inc.)
PO Box 1701
New York, NY 10116
Phone: 1-800-752-6633
Email: ConEd-bill@emailconed.com
14. Science On Call (Science Vendor $2,587
Retail Inc.)
1 N Dearborn St #1750
Chicago, IL 60602
Attn: Ken Tsang
Phone: 1-312-868-0664
Email: Support@scienceoncall.com
15. Spectrotel, Inc Vendor $2,392
104 West 40th Street, 400/500
New York, NY10018
Attn: Peter Karoczki
Phone: 917-410-1522
Email: peterk@gothamcloud.com
16. Chubb Limited Insurance $2,363
1133 Avenue of the Americas
New York, NY 10036
Attn: John Lupica
Phone: 212-703-7000
Email: customercare@chubb.com
17. Orkin, LLC Vendor $2,276
2170 Piedmont Rd. NE.
Atlanta, GA 30324
Attn: Eldon Wayne Dempsey III
Phone: 888-675-4662
Email: wdempsey@rollins.com
18. PSE&G (Public Service Utility $1,930
Enterprise Group, Inc)
PO Box 1444
New Brunswick, NJ 08906
Phone: 1-855-249-7734
Email: myaccount@pseg.com
19. ELK 33 East 33rd LLC Pending Undetermined
(Delaware (US)) Litigation
489 5th Ave, 7th FL
New York, NY 10017
Attn: Morry Kalimian
20. Sticky Fingers Restaurants, LLC Pending Undetermined
311 Johnnie Dodds Blvd Litigation
Mt. Pleasant, SC 29464
Leech Tishman
875 Third Avenue, 9th Floor
New York, NY 10022
Attn: Laura-Michelle Horgan
Phone: 212-603-6365
Email: lmhorgan@leechtishman.com
SUSHI GARAGE: Court OKs Cash Collateral Access on Final Basis
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized Sushi Garage, LLC to use cash
collateral, on a final basis, in accordance with the budget.
As previously reported by the Troubled Company Reporter, prior to
the Petition Date, the Debtor became indebted to several merchant
credit advance companies and other parties. The Debtor's
COVID-related perfected secured claims total in excess of $500,000.
The Debtor believes that the aggregate value of its assets is less
than $500,000.
Accordingly, taking into account the date of perfection, the value
of the Debtor's assets, and outstanding loan amounts, the Debtor
believes that any claim that was incurred/perfected after the 2020
is wholly unsecured pursuant to 11 U.S.C. Section 506(a).
Accordingly, the Debtor believes that the claims of the U.S. Small
Business Administration is secured up to the value of the Debtor's
assets.
On June 2020, the Debtor obtained a COVID-19 Economic Injury
Disaster Loan from the SBA in the principal amount of $500,000. The
terms of the EIDL Loan is 30 years from the date of the promissory
note and bears interest at a rate of 3.75% per annum. In connection
with the closing of the EIDL Loan, the SBA filed a form UCC-1
Financing Statement with the Florida Secured Transaction Registry
under File No. 202003101797, which indicates that the SBA has a
perfected interest on all of the Debtor's assets. The Debtor
believes that the unpaid balance on the EIDL Loan as of the
Petition Date is approximately $537,767, as of December 17, 2023.
U.S. Foods, Inc. and Libertas Funding, LLC (CT Corporation System
is the representative of Libertas) may assert liens against the
Debtor's assets.
Specifically, the Debtor is authorized to use cash collateral as of
the Petition Date going forward to pay: (i) amounts expressly
authorized by the Court; (ii) the current and necessary expenses
set forth in the Budget plus an amount not to exceed 10% for any
line item per month and cumulatively per month of up to 10% and
thereafter in accordance with Provision 4; and, (iii) additional
amounts as may be expressly approved in writing by the Secured
Creditors or by further order of the Court.
The term of the Budget is from April 20, 2024 through and including
September 30, 2024.
As adequate protection for the extent of the Debtor's use of cash
collateral, Secured Creditors will have, as of the Petition Date:
(i) a replacement lien pursuant to 11 U.S.C. section 361(2) on and
in all property acquired or generated post-petition by the Debtor
to the same extent and priority and of the same kind and nature as
the Secured Creditors' respective pre-petition liens and security
interests in the case.
A copy of the order is available at https://urlcurt.com/u?l=Z2zIDC
from PacerMonitor.com.
About Sushi Garage
Sushi Garage, LLC, doing business as Sushi Garage Miami Beach, is a
Japanese restaurant in Miami Beach, Fla.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-12354) on March 12,
2024, with $1 million to $10 million in both assets and
liabilities. Jonas Millan, managing member, signed the petition.
Judge Laurel M. Isicoff presides over the case.
Jacqueline Calderin, Esq., at Agentis, PLLC represents the Debtor
as legal counsel.
SYSTEM ENERGY: Moody's Affirms 'Ba1' LongTerm Issuer Rating
-----------------------------------------------------------
Moody's Ratings affirmed the ratings of Entergy Corporation
(Entergy, including its Baa2 senior unsecured rating) and two of
its subsidiaries, System Energy Resources, Inc. (SERI, including
its Ba1 Long-term Issuer Rating) and Entergy Louisiana, LLC (ELL,
including its Baa1 Long-term Issuer Rating).
Entergy's rating outlook was changed to stable from negative,
reflecting its improved financial performance and ongoing support
from stakeholders for critical cost recovery.
SERI's rating outlook was also changed to stable from negative,
following multiple litigation settlements that have reduce legal
and financial uncertainties for the company. As a result of these
developments, SERI's Social issuer profile score (IPS) was changed
to S-3 from S-4.
The outlook for ELL remains stable.
RATINGS RATIONALE
"Entergy's improved financial performance, ongoing regulatory
support for cost recovery and reduced litigation overhang has
brought greater stability to the company's credit profile" said
Ryan Wobbrock, Vice President – Senior Credit Officer. "The April
19, 2024 Louisiana Public Service Commission approval of Entergy
Louisiana's resilience plan, and associated cost recovery, signals
that Louisiana stakeholders are working constructively to address
key risks with an eye toward maintaining the utility's financial
stability" added Wobbrock.
Management's credit supportive financial policies, including $1.4
billion of common equity issuance through 2026, non-core gas
utility asset sales expected to net $485 million of proceeds in
2025, a declining dividend payout ratio and significant cash
contributions to its pension plan have provided a solid foundation
for Entergy to sustain the financial improvement it evidenced in
2023.
While the magnitude of Entergy's financial profile improvement will
be tempered by roughly $1.5 billion of new Louisiana resilience
capital spending through 2026, Moody's still expects Entergy to
generate cash flow from operations before changes in working
capital (CFO pre-WC) to debt ratios in excess of 14% over the next
few years.
Entergy's credit profile continues to be underpinned by its
position as a multi-state utility holding company, operating in
supportive jurisdictions with formulaic rates and other cost
recovery provisions. In particular, regulatory support for storm
cost recovery through reserves and securitization is a key credit
support given Entergy's geographic footprint along the Gulf of
Mexico.
Entergy Louisiana
ELL's financial profile has improved following the April 2023
receipt of around $1.5 billion of storm cost securitization
proceeds, which was the final step in its recovery from
unprecedented storms damage, totaling about $5.0 billion, in
2020/21. As a result, ELL currently maintains sufficient financial
cushion to absorb $1.9 billion of incremental capital spending as
part of its recently approved resilience plan.
ELL also has an outstanding filing with the LPSC, requesting either
1) an extension of, and some modifications to, its formula rate
plan (FRP) for the 2024-2026 period, or 2) a one-year rate plan and
a modified FRP over the 2025-2027 timeframe. Moody's estimates that
either path will help support CFO pre-WC to debt metrics above
18%.
Moody's views the April 19, 2024 LPSC approval LPSC approval as a
sign that management, the commission and stakeholders are working
constructively to address key risks, such as system hardening,
while maintaining ELL's financial profile. Specifically, the
forward-looking rider treatment and continued amortization of
retired plant costs are critical components that will help support
ELL's existing credit rating amid capital spending pressures.
Moody's expects similar treatment to prevail in the current FRP
process.
System Energy Resources
SERI's credit is underpinned by strong contractual cost recovery
for power sold to its affiliate utilities. However, the company has
been challenged by ongoing litigation with local utility
commissions in recent years, requiring an estimated $588 million of
customer refunds. Following settlement negotiations, SERI has come
to an agreement with three of the four utility commissions
regarding these refunds as well as operating with a more levered
capital structure and lower allowed ROE. The capitalization and ROE
changes will adversely affect SERI's financial performance going
forward; as such, Moody's estimates that SERI will produce around
30% CFO pre-WC to debt, on a run-rate basis, down from over 40%
historically. Nevertheless, the litigation settlements are a net
positive since they crystalize customer refunds at an amount that
does not cause material financial harm to SERI, while also reducing
uncertainty for the credit. Negotiations with the LPSC remain
ongoing, but Entergy and SERI have been successful in settling
roughly 84% of the total estimated damages. However, should the
LPSC negotiate a more favorable settlement with SERI, the other
three parties will receive increased compensation as well – a
credit negative.
Importantly, Moody's believes that the prospect for SERI to explore
protections or restructure its obligations because of the
outstanding litigation and potential size of the refunds, has
declined following the April 18, 2024 announced settlement with the
New Orleans City Council and the March 2024 Federal Energy
Regulatory Commission (FERC) approval of the Arkansas Public
Service Commission settlement. As a result of the settlements, the
improved financial prospects for SERI and the lower likelihood that
that management will pursue such a course of action, Entergy's IPS
was changed to G-2 from G-3.
Outlooks
Entergy's stable outlook reflects Moody's view that the company
will maintain a CFO pre-WC to debt ratio in excess of 14%, despite
increased capital spending and an unresolved general rate filing
for ELL. Moody's also expects regulatory decisions throughout its
utility service territory will remain supportive of cost recovery,
including those related to severe weather events.
ELL's stable outlook incorporates some projected financial
degradation due to its $1.9 billion resiliency plan, but also
Moody's expectation that the company will be able to produce CFO
pre-WC to debt metrics of 18% or higher through 2026. This view
also includes the assumption that the outstanding general rate
filing will result in cost recovery features similar to, or better
than, those existing in ELL's previous FRP.
SERI's stable outlook reflects the strength of its contracted cost
recovery provisions and formulaic rates regulated by the FERC.
Following various litigation settlement agreements, Moody's expects
SERI to produce CFO pre-WC to debt metrics of around 30% on a
consistent basis.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade
Entergy could be upgraded if there are material improvements to the
cost recovery features provided by regulators resulting in an
upgrade in one of more of its significant utility subsidiaries, if
all outstanding SERI litigation is concluded in an acceptable
manner and if it is able to generate 17% CFO pre-WC to debt
consistently.
ELL could be upgraded if CFO pre-WC to debt levels were to be at
least 21% on a sustainable basis and if the LPSC grants more
forward-looking cost recovery mechanisms, including more supportive
storm cost recovery assurances (e.g., higher storm reserves).
Given the expected revisions to SERI's rate structure, higher
leverage and management's recent financial strategies with regard
to this subsidiary (including carving out SERI from cross-default
language in the Entergy master credit facility), it is unlikely
that SERI will be upgraded in the foreseeable future.
Factors that could lead to a downgrade
Entergy could be downgraded if a ratio of CFO pre-WC to debt of 14%
is not sustainable amid increasing capital spending and in the face
of unforeseen challenges, such as commodity price spikes, severe
weather events, instances of delayed cost recovery, or negative tax
events.
ELL could be downgraded if regulatory relationships deteriorate
(such as an unexpectedly adverse outcome in the current rate
filing), if its ratio of CFO pre-WC to debt were to be at or below
18% on an ongoing basis or if the cost recovery after major storms
is not assured or materially delayed.
SERI could be downgraded if unexpected and material additional
customer refunds are required, if operational challenges arise or
if its CFO pre-WC to debt ratio falls to 20% or below on a
sustained basis.
LIST OF AFFECTED RATINGS
Issuer: Entergy Corporation
Affirmations:
LT Issuer Rating, Affirmed Baa2
Senior Unsecured Shelf, Affirmed (P)Baa2
Senior Unsecured, Affirmed Baa2
Commercial Paper, Affirmed P-2
Outlook Actions:
Outlook, Changed To Stable From Negative
Issuer: System Energy Resources, Inc.
Affirmations:
LT Issuer Rating, Affirmed Ba1
Senior Secured First Mortgage Bonds, Affirmed Baa2
Senior Secured Shelf, Affirmed (P)Baa2
Outlook Actions:
Outlook, Changed To Stable From Negative
Issuer: Entergy Louisiana, LLC
Affirmations:
LT Issuer Rating, Affirmed Baa1
Senior Secured First Mortgage Bonds, Affirmed A2
Senior Secured Shelf, Affirmed (P)A2
Outlook Actions:
Outlook, Remains Stable
Issuer: EL Investment Company, LLC
Affirmations:
Senior Secured First Mortgage Bonds, Affirmed A2 (Assumed by
Entergy Louisiana, LLC)
Issuer: Entergy Gulf States Louisiana, LLC
Affirmations:
Senior Secured First Mortgage Bonds, Affirmed A2 (Assumed by
Entergy Louisiana, LLC)
Issuer: W3A Funding Corporation
Affirmations:
Backed Senior Secured Shelf, Affirmed (P)Baa1
Outlook Actions:
Outlook, Remains Stable
Issuer: Louisiana Loc. Govt. Env. Fac.& Comm.Dev.Auth
Backed Senior Secured Revenue Bonds, Affirmed A2
Issuer: Louisiana Public Facilities Authority
Senior Secured Revenue Bonds, Affirmed A2
Backed Senior Secured Revenue Bonds, Affirmed A2
Issuer: Mississippi Business Finance Corporation
Backed Senior Secured Revenue Bonds, Affirmed Baa2
Issuer: St. Charles (Parish of) LA
Underlying Senior Secured Revenue Bonds, Affirmed A2
Backed Senior Secured Revenue Bonds, Affirmed A2
Backed Senior Unsecured Revenue Bonds, Affirmed Baa1
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in June 2017.
TED BAKER CANADA: Chapter 15 Case Summary
-----------------------------------------
Chapter 15 Debtor: Ted Baker Canada Inc.
5090 Orbitor Drive, Unit 1
Mississauga, Ontario ON L4W 5B5
Foreign Proceeding: In the Matter of the Companies' Creditors
Arrangement Act, R.S.C. 1985, c. C-36, as
Amended and in the Matter of a Plan of
Compromise or Arrangement of Ted Baker Canada
Inc., Ted Baker Limited, OSL Fashion Services
Canada Inc., and OSL Fashion Service
Chapter 15
Petition Date: April 24, 2024
Court: United States Bankruptcy Court
Southern District of New York
Affiliates that sought Chapter 15 protection:
Case No.
--------
Ted Baker Canada Inc. 24-10699
OSL Fashion Services, Inc. 24-10700
OSL Fashion Services Canada 24-10701
Ted Baker Limited 24-10702
Bankruptcy Judge: Hon. Judge Michael E. Wiles
Foreign
Representative: Antoine Adams
Foreign
Representative's
Counsel: Warren A. Usatine, Esq.
COLE SCHOTZ P.C.
Phone: 201-525-6233
Email: wusatine@coleschotz.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 petition is now available for
download. Follow this link to get a copy today
https://www.pacermonitor.com.
THERACARE PSYCHOLOGY: Hires Financial Relief as Legal Counsel
-------------------------------------------------------------
Theracare Psychology and Wellness Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
Financial Relief Law Center, APC as counsel.
The firm will provide these services:
1. represent the Debtor as a Debtor in Possession;
2. advise the Debtor regarding the requirements of the
Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules,
and the requirements of the Office of the United States Trustee
pertaining to the administration of the Estate and the use
thereof;
3. advise and represent the Debtor concerning its rights and
remedies regarding the assets of the Estate;
4. prepare, among other things, motions, applications,
answers, orders, memoranda, reports, and papers in connection with
the administration of the Estate;
5. protect and preserve the Estate by prosecuting and
defending actions commenced by or against the Debtor;
6. analyze and prepare necessary objections to proofs of claim
filed against the Estate;
7. conduct examinations of witnesses, claimants, or other
adverse or third parties;
8. represent the Debtor in any proceeding or hearing in the
Court;
9. negotiate, formulate, and draft any plan(s) of
reorganization and disclosure statement(s);
10. advise and represent the Debtor in connection with their
investigation of potential causes of action against persons or
entities, including, but not limited to, avoidance actions, and the
litigation thereof, if warranted; and
11. render such other advice and services as the Debtor may
require in connection with the Case.
The firm will be paid at these rates:
Andy C. Warshaw, Partner $400 per hour
Amanda G. Billyard, Partner $400 per hour
Richard L. Sturdevant, Associate $360 per hour
Associate or Of Counsel $305 per hour
Paralegals $250 per hour
Victor Ugarte, Law Clerks $195 per hour
The firm received a retainer in the amount of $41,496.
Andy Warshaw, Esq., a partner at Financial Relief Law Center,
attests that he and his firm are "disinterested persons" within the
meaning of Section 101 (14) of the Bankruptcy Code.
The firm can be reached at:
Andy C. Warshaw, Esq.
Financial Relief Law Center, APC
1200 Main Street, Suite G
Irvine, CA 92614
Tel: (714) 442-3319
Fax: (714) 361-5380
Email: awarshaw@bwlawcenter.com
About Theracare Psychology and Wellness Inc.
Theracare Psychology and Wellness, Inc. filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif.
Case No. 24-10869) on April 5, 2024, with up to $50,000 in assets
and up to $500,000 in liabilities.
Judge Scott C. Clarkson presides over the case.
Andy C. Warshaw, Esq., represents the Debtor as legal counsel.
TNOTES INVESTMENT: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: TNOTES Investment LLC
245 Emerson Street
Boston, MA 02127
Chapter 11 Petition Date: April 25, 2024
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 24-10768
Debtor's Counsel: Michael Van Dam, Esq.
VAN DAM LAW LLP
233 Needham Street
Suite 540
Newton, MA 02464
Tel: 617-969-2900
Fax: 617-964-4631
Email: mvandam@vandamlawllp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Thomas Noto as manager.
The Debtor indicated it has no unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/6KJKL7I/TNOTES_Investment_LLC__mabke-24-10768__0001.0.pdf?mcid=tGE4TAMA
TRANSOCEAN LTD: Completes $1.8B Sr. Notes Offering Due 2029, 2031
-----------------------------------------------------------------
Transocean Ltd. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that on April 18, 2024, in
connection with the closing of the previously announced offering by
the Company of (i) U.S. $900 million in aggregate principal amount
of 8.25% Senior Notes due 2029 and (ii) U.S. $900 million in
aggregate principal amount of 8.50% Senior Notes due 2031, the
Company entered into an indenture with Transocean Holdings 1
Limited, Transocean Holdings 2 Limited and Transocean Holdings 3
Limited, as guarantors, and Truist Bank, as trustee. The Notes are
fully and unconditionally guaranteed, jointly and severally, by the
Guarantors on a senior unsecured basis.
The 2029 Notes will mature on May 15, 2029, and the 2031 Notes will
mature on May 15, 2031. The 2029 Notes bear interest at a rate of
8.250% per annum. The 2031 Notes bear interest at a rate of 8.500%
per annum. Interest on the Notes will be paid on May 15 and
November 15 of each year, beginning on November 15, 2024. The Notes
have not been registered under the U.S. Securities Act of 1933, as
amended, or under any state securities laws, and were offered only
to qualified institutional buyers under Rule 144A under the
Securities Act and outside the United States in compliance with
Regulation S under the Securities Act.
The terms of the Notes are governed by the Indenture, which
contains covenants that, among other things, limit the Company's
ability to allow its subsidiaries to incur certain additional
indebtedness, incur certain liens on its drilling rigs or
drillships without equally and ratably securing the Notes, engage
in certain sale and lease-back transactions covering any of its
drilling rigs or drillships and consolidate, merge or enter into a
scheme of arrangement qualifying as an amalgamation. The Indenture
also contains customary events of default. Indebtedness under the
Notes may be accelerated in certain circumstances upon an event of
default as set forth in the Indenture.
About Transocean
Transocean Ltd. is an international provider of offshore contract
drilling services for oil and gas wells. The Company specializes
in technically demanding sectors of the offshore drilling business
with a particular focus on ultra-deepwater and harsh environment
drilling services.
Transocean reported a net loss of $954 million in 2023, a net loss
of $621 million in 2022, a net loss of $591 million in 2021, a net
loss of $568 million in 2020 and a net loss of $1.25 billion in
2019. As of Dec. 31, 2023, the Company had $20.25 billion in total
assets, $1.39 billion in total current liabilities, $8.44 billion
in total long-term liabilities, and $10.42 billion in total
equity.
* * *
Moreover, as reported by the TCR on Sept. 28, 2023, S&P Global
Ratings raised its issuer credit rating on offshore drilling
contractor Transocean Ltd. to 'CCC+' from 'CCC'. S&P said, "The
upgrade reflects improved rig demand, higher day rates, and our
view that there is reduced near-term risk of a distressed debt
exchange or balance sheet restructuring."
TRANSOCEAN LTD: Extends $510M Credit Facility Maturity to June 2028
-------------------------------------------------------------------
Transocean Ltd. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that on April 18, 2024,
Transocean Inc. a wholly owned subsidiary of the Company, Citibank,
N.A., as administrative agent and collateral agent, certain lenders
and, for the limited purposes set forth therein, Transocean Ltd.
and certain of the Company's subsidiaries entered into the sixth
amendment (the "RCF Amendment") to the Company's credit agreement
dated June 22, 2018.
The RCF Amendment amends the Existing Credit Facility to, among
other things, (i) extend the scheduled maturity date of $510
million of revolving commitments thereunder from June 2025 to June
2028, (ii) reduce the total amount of revolving commitments
thereunder from $600 million to $575 million (with the $65 million
of non-extending commitments expiring in June 2025) and (iii)
reduce the minimum liquidity covenant from $500 million to $200
million.
About Transocean
Transocean Ltd. is an international provider of offshore contract
drilling services for oil and gas wells. The Company specializes
in technically demanding sectors of the offshore drilling business
with a particular focus on ultra-deepwater and harsh environment
drilling services.
Transocean reported a net loss of $954 million in 2023, a net loss
of $621 million in 2022, a net loss of $591 million in 2021, a net
loss of $568 million in 2020 and a net loss of $1.25 billion in
2019. As of Dec. 31, 2023, the Company had $20.25 billion in total
assets, $1.39 billion in total current liabilities, $8.44 billion
in total long-term liabilities, and $10.42 billion in total
equity.
* * *
As reported by the TCR on Sept. 28, 2023, S&P Global Ratings raised
its issuer credit rating on offshore drilling contractor Transocean
Ltd. to 'CCC+' from 'CCC'. S&P said, "The upgrade reflects
improved rig demand, higher day rates, and our view that there is
reduced near-term risk of a distressed debt exchange or balance
sheet restructuring."
TREVENA INC: Stockholders Approve Issuance of Common Shares
-----------------------------------------------------------
Trevena, Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission that in connection with a Special Meeting of
Trevena, Inc. that originally was scheduled for March 21, 2024,
which was adjourned at the Original Meeting until April 19, 2024,
the stockholders:
(1) authorized, for purposes of complying with Nasdaq Listing
Rule 5635(d), the issuance of shares of the Company's
common
stock, par value $0.001 per share, underlying certain
warrants issued by the Company pursuant to that certain
Securities Purchase Agreement, dated as of Dec. 27, 2023,
by
and between the Company and the investor named on the
signatory thereto, and that certain Inducement Letter,
dated
as of Dec. 27, 2023, by and between the Company and the
investor named on the signatory page thereto, in an amount
equal to or in excess of 20% of the Company's Common Stock
outstanding immediately prior the issuance of such
warrants;
(2) approved an adjournment of the Special Meeting to a later
date or dates, if necessary or appropriate, to solicit
additional proxies if there are insufficient votes to adopt
Proposal 1.
About Trevena
Headquartered in Chesterbrook, PA, Trevena, Inc. is a
biopharmaceutical company focused on developing and commercializing
novel medicines for patients affected by central nervous system, or
CNS, disorders.
Philadelphia, Pennsylvania-based Ernst & Young LLP, the Company's
auditor since 2007, issued a "going concern" qualification in its
report dated April 1, 2024, citing that the Company has suffered
recurring losses from operations and has stated that substantial
doubt exists about the Company's ability to continue as a going
concern.
TRINITY INDUSTRIES: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Trinity Industries Inc.'s (Trinity)
Long-Term Issuer Default Rating (IDR), senior unsecured notes and
revolving credit facility at 'BB'. The Rating Outlook is Stable.
KEY RATING DRIVERS
The rating affirmations reflect Trinity's solid franchise as a
leading provider of railcar products and services in North America,
the diversified fleet portfolio across customers, industries and
car types, strong asset quality performance over time, manageable
exposure to residual value risk given conservative depreciation
policies, consistent cash flow generation from the leasing
business, adequate liquidity and experienced management team.
Trinity's ratings are constrained by weak operating performance
historically given the high level of cyclicality of the railcar
manufacturing and railcar leasing businesses, meaningful reliance
on secured, short-term, wholesale funding sources, and modestly
elevated leverage. Rating constraints applicable to the broader
railcar leasing industry include the competitive operating
environment and the potential impact from federal, state, local,
and foreign environmental regulations on railcars, particularly
tank cars, which can heighten residual value risk and maintenance
expenses.
Trinity's leasing business (Trinity Industries Leasing Company, or
TILC) contributes the majority of the company's consolidated
pre-tax earnings, which helps to balance the more pronounced
cyclicality of the railcar manufacturing operations. Fitch believes
there are meaningful synergies between manufacturing and leasing,
as TILC generates substantial railcar orders for Trinity as it
obtains lease commitments from its customers. Trinity's leasing
portfolio is diversified across railcar types, commodities carried,
and customers serviced. In North America, Trinity served over 700
customers transporting around 900 different commodities with
approximately 270 railcar types in 2023.
Asset quality remains strong with negligible residual value losses
given the company's conservative depreciation policy and the long
economic life of its assets. In 2023, Trinity recognized $3.1
million of credit losses, which represented 0.9% of gross
receivables. Asset quality metrics have been relatively stable over
time, and Fitch believes the company will maintain low write-offs
given its ability to remarket railcars within the fleet as well as
minimal credit losses within the receivables portfolio.
Operating performance in 2023 benefited from higher railcar
external deliveries in the manufacturing business and improved
lease rates and portfolio growth in the leasing business, partially
offset by lower lease portfolio sales volume, the impact of foreign
currency fluctuations on the manufacturing business, and higher
related operating costs across the enterprise. Consolidated pre-tax
return on average assets (ROAA) were 1.7% in 2023, up from 1.5% a
year ago, and well-above the four-year average of negative 0.5%
from 2020-2023. Fitch expects manufacturing cost improvements and
lease fleet optimization will improve segment margins, which should
support enhanced profitability metrics in 2024. Failure to develop
a stronger and more consistent earnings profile could yield
negative rating momentum.
Consolidated leverage (gross debt-to-tangible equity) was 5.5x at
YE23, up modestly from 5.2x a year ago, which is consistent with
Fitch's 'bb' category benchmark range of 4x to 7x for balance sheet
intensive finance and leasing companies with a sector risk
operating environment score in the 'bbb' category. Leverage is
expected to remain below 6.0x, which Fitch believes is appropriate
relative to the cyclicality of the manufacturing business.
Secured funding represented 86% of total funding at YE23 and is
primarily comprised of non-recourse warehouse facilities, secured
term loans, and equipment notes secured by railcars issued by the
leasing operations. Trinity's unsecured funding consisted of a $600
million committed revolving credit facility (RCF) and $800 million
of unsecured notes. Fitch believes Trinity's secured funding is
high relative to more highly rated finance and leasing companies.
Fitch would view an increase in unsecured funding favorably as it
would improve the firm's overall funding flexibility.
Fitch believes Trinity's liquidity, which included $106 million in
cash and marketable securities and $583 million of availability
under the RCF, as adequate. This is further supplemented by
operating cash flow, which averaged $387 million annually over the
last four years. The next debt maturity is in October 2024 when
$400 million of senior unsecured notes come due. Fitch expects the
notes to be refinanced with an unsecured issuance or with some
combination of operating cash flows, balance sheet cash or RCF.
The Stable Outlook reflects Fitch's expectation for the maintenance
of strong asset quality performance, adequate liquidity and
consistent access to the capital markets. The Outlook also reflects
the expectation for continued improvement in the level and
consistency of operating performance in line management's execution
of strategic initiatives to enhance operating leverage.
Trinity's unsecured debt rating is equalized with its Long-Term
IDR, reflecting sufficient unencumbered assets to support unsecured
noteholders and suggests average recovery prospects under a stress
scenario.
Operating performance in 2023 benefited from higher manufacturing
and leasing portfolio sales, partially offset by higher input costs
in the manufacturing operations, higher fleet operating expenses
and increased depreciation in the leasing business. Consolidated
pre-tax return on average assets (ROAA), were 1.7% in 2023, well
above the four-year average of negative 0.5% from 2020-2023. This
is consistent with Fitch's 'ccc and below' category earnings and
profitability benchmark range of less than 0% for balance sheet
intensive finance and leasing companies with an operating
environment score in the 'bbb' category, but the score is notched
up to reflect Fitch's belief that this is not representative of
current and future performance.
Fitch expects orders and deliveries to strengthen in line with a
recovery in the railcar sector, in addition to improved operating
leverage, which should support improved profitability metrics in
2024. Failure to develop a stronger and more consistent earnings
profile could yield negative rating momentum.
Consolidated leverage (gross debt-to-tangible equity) was 5.5x at
YE23: up from 5.2x a year ago, which is consistent with the 'bb'
category benchmark range of 4x to 7x for balance sheet intensive
finance and leasing companies with an operating environment score
in the 'bbb' category. Based on the manufacturing and leasing
businesses' contribution to operating profit, which were 12% and
88%, respectively averaged over the prior four years (2020-2023),
leverage would have been 3.5x on a blended basis at YE23. Fitch
believes leverage will remain elevated in 2024 given increased debt
balances to support portfolio growth.
Secured funding represented 86% of total funding at YE23 and is
primarily comprised of non-recourse warehouse facilities, secured
term loans, and equipment notes secured by railcars issued by the
leasing operations. Trinity's unsecured funding consisted of a $600
million committed revolving credit facility (RCF) and $800 million
of unsecured notes. Fitch believes Trinity's secured funding is
high relative to more highly rated finance and leasing companies.
Fitch would view an increase in unsecured funding favorably as it
would improve the firm's overall funding flexibility.
Fitch believes Trinity's liquidity, which included $106 million in
cash and marketable securities and $583 million of availability
under the RCF, as adequate. This is further supplemented by
operating cash flow, which averaged $387 million over the last four
years. The next debt maturity is in October 2024 when $400 million
of senior unsecured notes come due. Fitch expects the notes to be
refinanced with an unsecured issuance or with some combination of
operating cash flows, balance sheet cash or RCF.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Failure to improve the level and consistency of operating
earnings;
- A material and sustained increase in leverage approaching 6.0x;
- A reduction in the diversity and/or credit quality of its
customers;
- A material and persistent reduction in fleet utilization;
- An increase in impairments; and/or
- Weakening of the liquidity profile would be negative for
ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Enhanced earnings consistency and ROAA sustained above 2.5%;
- A reduction in consolidated leverage approaching 4.0x; and
- An increase in unsecured funding approaching 25% of total debt.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
Trinity's unsecured debt rating is equalized with the Long-Term
IDR, reflecting expectations for average recovery prospects under a
stress scenario.
The unsecured debt rating is equalized to Trinity's Long-Term IDR
and is expected to move in tandem. However, unsecured funding below
10% and/or material reduction in unencumbered assets could result
in the widening of the notching between Trinity's Long-term IDR and
unsecured notes.
ADJUSTMENTS
The Standalone Credit Profile has been assigned below the implied
Standalone Credit Profile due to the following adjustment
reason(s): Weakest Link - Earnings & Profitability (negative).
The Sector Risk Operating Environment score has been assigned below
the implied score due to the following adjustment reason(s):
Regional, industry or sub-sector focus (negative).
The Business Profile score has been assigned below the implied
score due to the following adjustment reason(s): Business model
(negative).
The Earnings & Profitability score has been assigned above the
implied score due to the following adjustment reason(s): Historical
and future metrics (positive).
The Funding, Liquidity & Coverage score has been assigned below the
implied score due to the following adjustment reason(s): Historical
and future metrics (negative).
ESG CONSIDERATIONS
Trinity has an GHG Emissions & Air Quality, Energy Management,
Water & Wastewater Management, and Waste &Hazardous Materials
Management; Ecological Impacts scores of '3', '3', '2', and '3',
which differs from broader financial institution peer scores of
'2', '2', '1' and '1', respectively. This reflects Trinity's
differentiated exposure to environmental impacts in its
manufacturing business, but does not have a material impact on its
rating.
Trinity also has a Labor Relations & Practices score of '3', which
differ from the broader financial institution peer scores of '2',
reflecting product safety and the impact of labor on its
manufacturing business, but does not have a material impact on its
rating.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Trinity Industries Inc. LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed BB
TRP BRANDS: Hires Novo Advisors LLC as Financial Advisor
--------------------------------------------------------
TRP Brands LLC and its affiliate seek approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to employ
Novo Advisors, LLC as financial advisor.
The firm will provide these services:
-- assist the Debtors in development of near-term and
post-emergence projections, including 4-wall and corporate overhead
detail;
-- assess the planned physical footprint and headcount
post-emergence for any cost-savings opportunities;
-- develop sensitivity scenarios to understand impacts to
liquidity and profitability in slower-than-expected recovery
environments;
-- validate or develop a 13-week cash forecast with weekly
budget versus actual reporting;
-- prepare a liquidation analysis of the remaining business with
documented assumptions;
-- assist the Debtors with creditor communications and supplier
management plans through the bankruptcy process, as needed; and
-- provide ad hoc analysis and support to the Debtors and
counsel, as requested.
The firm will be paid at these rates:
Partners/Principals $750 to $900 per hour
Managing Directors $525 to $675 per hour
Senior Consultants $350 to $450 per hour
Paraprofessionals $250 per hour
The firm will be paid a retainer in the amount of $50,000.
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Sandeep Gupta, a managing director at Novo Advisors, LLC, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Sandeep Gupta
Novo Advisors, LLC
401 N. Franklin St., Suite 4 East
Chicago, IL 60654
Tel: (312) 961-6854
Email: SGupta@novo-advisors.com
About TRP Brands LLC
TRP Brands, LLC and The RoomPlace Furniture & Mattress, LLC filed
Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 24-01529) on
Feb. 2, 2024. Valerie Berman-Knight, president, signed the
petitions.
At the time of the filing, TRP Brands reported up to $50,000 in
assets and $50 million to $100 million in liabilities while
RoomPlace reported up to $50,000 in assets and $100 million to $500
million in liabilities.
Judge Deborah L. Thorne oversees the cases.
E. Philip Groben, Esq., at Gensburg Calandriello & Kanter, P.C. is
the Debtors' legal counsel.
The U.S. Trustee for Region 11 appointed an official committee of
unsecured creditors in these Chapter 11 cases. The committee tapped
FisherBroyles, LLP as its legal counsel.
TWILIO INC: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable
-------------------------------------------------------------
Moody's Ratings affirmed Twilio Inc.'s Ba3 Corporate Family Rating,
Ba3-PD Probability of Default Rating and Ba3 senior unsecured
rating. The outlook remains stable.
The affirmation of the ratings comes as Twilio transitions from a
high growth, invest-at-all costs-for-growth phase to a more mature,
slower growth, but solidly cash flow positive phase. The company
commenced a restructuring and cost reduction plan in late 2022 with
several successive actions which significantly improved its cash
flow profile. However, growth has abruptly slowed since the
initiation of restructuring plans. Revenue growth was 9% in 2023
vs 35% in 2022 and higher in prior years.
Twilio's free cash flow turned solidly positive to $364 million in
2023 after years of negative cash flow ($-335 million in 2022) when
the company invested heavily in growth. While the very large
non-cash stock based compensation expense and impairment charges
continue to drive negative GAAP based EBITDA measures, Twilio is
moderating the growth of stock compensation with the potential to
show positive GAAP EBITDA by 2026 if impairment and restructuring
charges wind down. EBITDA excluding interest income, stock comp and
impairment charges (i.e., cash adjusted EBITDA) changed to positive
in 2023 for the first time. In this new phase, Twilio will likely
significantly increase share repurchases and reduce its
exceptionally large cash position. Nevertheless, Moody's expects
Twilio will continue to maintain a net cash position (cash in
excess of debt levels) over the next 12 -18 months.
RATINGS RATIONALE
The Ba3 CFR reflects the company's still solid growth potential,
strong market position, and substantial cash balances offset by
high leverage. Twilio's EBITDA was significantly negative in the
year ended December 31, 2023, resulting in an infinite leverage
profile. However, when adjusting for interest income, impairment
charges and stock based compensation expense, "cash adjusted"
EBITDA was solidly positive with cash adjusted leverage of around
3x for the same period.
Twilio benefits from its strong market position as the largest
provider in a segment of the Communications Platform as a Service
(CPaaS) industry, its revenue growth and very strong equity
cushion. Moody's expects that Twilio will continue to grow at a mid
to high single digit rate over the next 12-18 months supported by
secular advances in digital communications software applications
but at well reduced rates from prior years. These tail winds should
continue to support usage growth with Twilio's existing customer
base albeit some slowing of net new customers.
While the credit profile also benefits from Twilio's substantial
net cash position of over $3 billion ($4.2 billion net of $1
billion of unsecured notes), Moody's expects a substantial
reduction in cash position as Twilio finishes a prior $1 billion
buyback program and commences a recently announced $2 billion
authorization. Moody's still continues to expect a solid net cash
position over the next year.
The SGL-1 Speculative Grade Liquidity rating reflects Twilio's
exceptional cash balances and significant cash generating
capabilities. The company does not have a revolving credit
facility. Moody's expects the company will generate over $400
million of free cash flow over the next 12-18 months. As noted, a
significant portion of the cash balance will likely be used for
share repurchases.
The stable outlook reflects Moody's expectation of mid to high
single digit revenue growth, improving margins and sizable free
cash flow. The outlook accommodates a temporary increase in share
buyback levels provided cash levels remain well in excess of debt
levels.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Twilio continues to grow revenue,
EBITDA and free cash flow. Ratings could be upgraded if debt to
cash adjusted EBITDA is sustained below 3x and the company
maintains cash well in excess of debt levels.
Ratings could be downgraded if Twilio's performance is negatively
impacted by recent restructuring programs, debt to cash adjusted
EBITDA is sustained above 4.5x, or free cash flow to debt is
sustained below 15%. Maintenance of cash levels well in excess of
debt levels provides some cushion to the above triggers.
Twilio Inc., headquartered in San Francisco, CA, creates and
provides communications oriented application programming interfaces
(APIs) to its software developer customer base. These APIs enable
software developers to digitize communications and improve customer
engagement through messaging, voice, email, and other modes of
communication. Twilio operates two separate business units, Twilio
Communications and Twilio Segment. Twilio Inc. is a public company
with an independent board of directors. The company generated
revenues of approximately $4.2 billion in 2023.
The principal methodology used in these ratings was Software
published in June 2022.
UNITED TALENT: Moody's Affirms 'B2' CFR, Outlook Stable
-------------------------------------------------------
Moody's Ratings affirmed United Talent Agency, LLC's (UTA) B2
corporate family rating, B2 first lien senior secured bank credit
facilities rating, and B2-PD probability of default rating
following the proposed increase in senior secured term loan debt.
The outlook is stable.
The net proceeds of the new term loan will be used to fund a
potential acquisition of a European soccer representation agency,
repay the outstanding balance on the revolving credit facility, and
add cash to the balance sheet. The new term loan is expected to be
fungible with the existing terms loan due 2028. Pro forma leverage
will increase to 7x from 5.6x as of LTM Q3 2023 (including Moody's
standard adjustments), but Moody's expects leverage will decrease
to below 6x in 2024 due to the recovery in content production
following the resolution of the Writers Guild of America (WGA) and
Screen Actors Guild (SAG) strikes in 2023, as well as from
continued growth in UTA's sports, music, and other business lines.
While the transaction will increase leverage levels, the purchase
of the soccer representation agency will also further enhance UTA's
scale and geographic diversification in addition to expanding the
company's sports segment. Moody's expects sports and related
services to be one of the fastest growing businesses due to
continuing strong demand for sports content.
RATINGS RATIONALE
UTA's B2 CFR reflects the very high pro forma leverage level (7x
including Moody's standard adjustments as of Q3 2023) and Moody's
expectation that leverage will decline to below 6x level in 2024
absent any additional debt funded transactions. The strikes by the
WGA and SAG in 2023 significantly disrupted content production, but
production will continue to ramp up during 2024 and drive improved
operating performance. A potential strike by the International
Alliance of Theatrical Stage Employees (IATSE) has the potential to
interrupt some production in the US, but a resolution of the issues
are likely to be easier to resolve than the WGA and SAG strikes.
UTA has diversified operations over the past several years with a
cost structure that is largely variable which will increase the
ability to manage through any delays in film schedules.
Concert related revenue will continue to contribute to growth
through 2024 given the strong demand for live entertainment. Sports
related revenues benefit from largely contractual revenue streams
and will expand further as athletes' compensation continues to rise
due to strong demand for sports content. The cost structure is
relatively variable which limits the impact of fluctuations in
performance. In addition, expenses can be reduced if results in any
one business segment underperforms. UTA is the third largest
representation agency and Moody's expects the company will continue
to evaluate additional purchases to further increase its scale,
geographic footprint, and the range of services offered.
ESG CONSIDERATIONS
UTA's ESG Credit Impact Score is (CIS-4) driven by the company's
exposure to governance risks (G-4). Moody's expects UTA will pursue
an aggressive financial profile including additional acquisitions
to expand and diversify operations with distributions to unit
holders that will result in flat to modestly negative free cash
flow (FCF) in the near term. UTA is a private company owned by the
partners of the firm with a minority ownership position held by EQT
Private Equity as well as other investors. UTA's social risk score
was changed to (S-3) from (S-2) due to the potential for third
party labor disruptions to negatively impact operating
performance.
Moody's expects that UTA will maintain an adequate liquidity
position as a result of approximately $107 million of pro forma
cash on the balance sheet as of Q4 2023 and access to an undrawn
$215 million revolving credit facility due 2026 following
completion of the transaction. Free cash flow (FCF) after
distributions to partners was negative (-17% as a percentage of
debt as of LTM Q3 2023) and is likely to be modestly negative to
breakeven in 2024. Capex was $49 million LTM Q3 2023, but will
decrease in 2024 following the completion of an expansion of UTA's
office space at several locations. Cash on the balance sheet will
likely be used largely for acquisitions and to fund distributions.
The term loan is covenant lite. The revolver is subject to a
maximum senior secured net leverage ratio covenant when greater
than 35% of the revolver is drawn. UTA has amended the financial
covenants as part of the transaction with the senior secured net
debt covenant increasing to 7.5x in Q4 2023 and 7.75x in Q1 2024
with step downs going forward to 4.5x in Q1 2025. Moody's expects
UTA to remain in compliance with the revolver covenant over the
next twelve months.
The stable outlook incorporates Moody's expectation for revenue and
EBITDA growth as content production ramps up in 2024 following the
WGA and SAG strikes as well as continued growth in sports, music
and other business lines. While demand for sports content and live
music will remain strong, Moody's expect spending on film and
episodic content will be more moderate compared to the levels of
the past few years as networks and streaming services focus on
improving profitability. Moody's expects leverage will decrease to
below 6x in 2024 driven by EBITDA growth in the 20% range. However,
UTA is likely to continue to pursue additional debt funded
acquisitions that may have a significant impact on leverage levels
going forward. A strike by IATSE later this year could also elevate
volatility in the near term and delay the pace of leverage
reduction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if UTA's leverage was sustained below
4x (including Moody's standard adjustments) with FCF as a
percentage of debt in the mid- single digits after distributions.
Continuing positive organic growth and confidence that UTA would
pursue a financial policy in line with a higher rating would also
be required.
The ratings could be downgraded if UTA's leverage was sustained
above 6x (including Moody's standard adjustments) due to additional
debt funded acquisitions or poor operating underperformance. A
weakened liquidity position may also lead to negative rating
pressure.
United Talent Agency, LLC (UTA) is a diversified client
representation agency that represents writers, producers,
directors, actors, and public speakers as well as others. In
addition, the company's music touring business represents musicians
in live touring as well as services representing social
influencers, streamers, and brands in esports. UTA also provides
investment advisory services in media and entertainment and
expanded its sports representation business through the acquisition
of Klutch Sports Group as well as the purchases of other sports
representation agencies. In December 2021, UTA completed the
acquisition of marketing and consultancy firm, Media Link, LLC. and
in June 2022, UTA acquired UK based literary and talent group,
Curtis Brown Group. UTA's revenue as of LTM Q3 2023 was well over
$700 million.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
UNIVERSAL SEATING: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized Universal Seating Company, Inc.
to use cash collateral, on an interim basis, in accordance with the
budget, with a 10% variance.
The Debtor requires the use of cash collateral for payment of
necessary owner/operators, employees, supplies, and ordinary
business expenses.
The U.S. Small Business Administration asserts an interest in the
Debtor's cash collateral.
The Debtor estimates that the collective claims of the Secured
Creditors are secured by pre-petition accounts receivable in the
amount of $123,646.
Each creditor with a security interest in cash collateral shall
have a perfected post-petition lien against cash collateral to the
same extent and with the same validity and priority as the
prepetition lien, without the need to file or execute any document
as may otherwise be required under applicable non bankruptcy law.
A continued hearing on the matter is set for June 4, 2024 at 4
p.m.
A copy of the order is available at https://urlcurt.com/u?l=vdff9f
from PacerMonitor.com.
About Universal Seating Company, Inc.
Universal Seating Company, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
3:24-bk-01019-JAB) on April 11, 2024. In the petition signed by
Barry M. Schuster, president, the Debtor disclosed up to $500,000
in both assets and liabilities.
Judge Jacob A. Brown oversees the case.
Rehan N. Khawaja, Esq,. at Bankruptcy Law Offices of Rehan N.
Khawaja, represents the Debtor as legal counsel.
UNIVERSAL-1 IMPORTS: Wins Cash Collateral Access Thru May 31
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, authorized Universal-1 Imports, Inc. to
use cash collateral, on an interim basis, in accordance with the
budget, through May 31, 2024, subject to a further hearing.
Green Tree Capital, LLC asserts an interest in the Debtor's cash
collateral.
The court said the Debtor is authorized to pay the amount of
$20,000 to Green Tree Capital on each of April 22, 2024 and May 20,
2024.
As previously reported by the Troubled Company Reporter, Green Tree
was granted valid, enforceable, fully perfected, security
interests, to the extent that said PrePetition Liens were valid,
perfected and enforceable as of the Petition Date and in the
continuing order of priority that existed as of the Petition Date,
to the extent of, and as security for any decrease in the value of
Green Tree's interest in the cash collateral since the Petition
Date, all of the Debtor's present and future (a) accounts, chattel
paper, documents, equipment, general intangibles, instruments and
inventory as those terms are defined in Article 9 of the Uniform
Commercial Code, now or hereinafter acquired by Debtor and\or
Guarantor(s); (b) all proceeds as that term is defined in Article 9
of the UCC; (c) funds at any time in the Debtor's and\or
Guarantor(s) account, regardless of the source of the funds; (d)
present and future Electronic Check Transactions; and (e) any
amount which may be due to Green Tree under its Agreement with
Green Tree, including, but not limited to all rights to receive any
payments or credits under the Agreement in the same validity, order
and priority as the PrePetition Liens, subject, in accordance with
the priority as set forth therein, and subordinate only to: United
States Trustee fees pursuant to 28 U.S.C. Section 1930, together
with interest, if any, pursuant to 31 U.S.C. Section 3717 and any
Clerk's filing fees; and fees due the Subchapter V Trustee.
In addition, the Replacement Liens granted will not attach to the
proceeds of any recoveries of estate causes of action under 11
U.S.C. Sections 542-553 of the Bankruptcy Code.
A further hearing on the matter is set for May 22 at 1:30 p.m.
A copy of the order is available at https://urlcurt.com/u?l=3XmRDh
from PacerMonitor.com.
About Universal-1 Imports, Inc.
Universal-1 Imports, Inc. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
24-11338) on Feb. 13, 2024, listing $100,001 to $500,000 in both
assets and liabilities.
Judge Scott M Grossman presides over the case.
Susan D. Lasky, Esq. at Susan D. Lasky PA represents the Debtor as
counsel.
URBAN ONE: Inks Sixth Waiver and Amendment to ABL Facility
----------------------------------------------------------
Urban One, Inc. disclosed in a Form 8-K Report filed with the U.S.
Securities and Exchange Commission that the Company entered into a
sixth waiver and amendment to the Current ABL Facility, dated as of
February 19, 2021, with the Company, the Company's subsidiaries
guarantors, Bank of America, N.A., as administrative agent and the
lenders party thereto.
The Sixth Waiver and Amendment waived certain events of default
under the Current ABL Facility related to the Company's failure to
timely deliver both the Annual Financial Deliverables for the
period ended December 31, 2023 and Quarterly Financial Deliverables
for the quarter ended March 31, 2024 as required under the Current
ABL Facility.
The Sixth Waiver and Amendment sets a due date of May 31, 2024 for
the Delayed Reports.
About Urban One
Urban One, Inc., formerly known as Radio One, Inc., headquartered
in Silver Spring, Md., is an urban-oriented multimedia company that
operates or owns interests in radio broadcasting stations (32% of
revenue as of LTM Q4 2022) generated by 66 stations in 13 markets,
cable television networks (43% of revenue), an 80% ownership in
Reach Media (9% of revenue), and ownership of Interactive One, its
digital platform, as well as other internet-based properties (16%
of revenue), largely targeting an African-American and urban
audience. The Chairperson, Catherine L. Hughes, and President,
Alfred C. Liggins III (Chairperson's son), maintain voting control
and hold a significant ownership position. The company reported
consolidated revenue of $485 million as of LTM Q4, 2022.
As of September 30, 2023, Urban One had $1.19 billion in total
assets, $891.52 million in total liabilities, $21.82 million in
redeemable noncontrolling interests and $278.71 million in total
stockholders' equity.
* * *
Moody's Investors Service affirmed Urban One, Inc.'s B3 Corporate
Family Rating, B3-PD Probability of Default Rating, and B3 senior
secured notes rating. The speculative grade liquidity rating was
upgraded to SGL-1 from SGL-2 reflecting very good liquidity. The
outlook was changed to stable from positive.
The affirmation of the CFR and stable outlook reflect Urban One's
relatively high pro forma leverage (4.9x as of Q4 2022 pro forma
for sale of the company's minority ownership position in MGM
National Harbor, LLC (National Harbor) and including Moody's
standard adjustments) as well as Moody's expectations that
operating performance will decline in 2023 due to lower political
advertising revenue in a non-election year and from lower cable TV
revenue. Cable TV was a source of strength during the pandemic but
is likely to be pressured from lower ratings and a decline in
subscribers as consumers continue to migrate to streaming services
from cable TV. Social considerations were a key driver of the
rating action, as Moody's expects the negative secular pressures in
the cable TV division to increase as media consumption continues to
migrate to streaming services.
UXIN LIMITED: Incurs RMB79.3 Million Net Loss in Third Quarter
--------------------------------------------------------------
Uxin Limited announced its unaudited financial results for the
third quarter ended Dec. 31, 2023.
Uxin reported a net loss of RMB79.33 million on RMB410.49 million
of total revenues for the three months ended Dec. 31, 2023,
compared to a net loss attributable to the Company of RMB100.84
million on RMB470.50 million of total revenues for the three months
ended
Dec. 31, 2022.
For the nine months ended Dec. 31, 2023, the Company reported a net
loss attributable to the Company of RMB228.04 million on RMB1.05
billion of total revenues, compared to a net loss attributable to
the Company of RMB57.37 million on RMB1.71 billion of total
revenues for the nine months ended Dec. 31, 2022.
As of Dec. 31, 2023, the Company had RMB2.32 billion in total
assets, RMB2.41 billion in total liabilities, RMB1.37 billion in
total mezzanine equity, and a total shareholders' deficit of
RMB1.46 billion.
Liquidity
As of Dec. 31, 2023, the Company had cash and cash equivalents of
RMB19.4 million, compared to RMB92.7 million as of March 31, 2023.
The Company has incurred accumulated and recurring losses from
operations, and cash outflows from operating activities. In
addition, the Company's current liabilities exceeded its current
assets by approximately RMB648.2 million as of Dec. 31, 2023.
"The Company's ability to continue as a going concern is dependent
on management's ability to increase sales, achieve higher gross
profit margin and control operating costs and expenses to reduce
the cash that will be used in operating cash flows, and to enter
into financing arrangements, including but not limited to renewal
of the existing borrowings and new debt and equity financings.
There is uncertainty regarding the implementation of these business
and financing plans, which raises substantial doubt about the
Company's ability to continue as a going concern. The accompanying
unaudited financial information does not include any adjustment
that is reflective of these uncertainties," the Company said in the
press release.
Recent Update
On March 18, 2024, the Company entered into a term sheet with Xin
Gao Group Limited and an investment fund specializing in the
automobile industry ("NC Fund") for financing in a total amount of
approximately US$34.8 million at a subscription price of
US$0.004858 per share, equivalent to US$1.4574 per ADS. Xin Gao
Group Limited, controlled by Mr. Kun Dai, Chairman of the Board of
Directors and Chief Executive Officer of Uxin, is an existing
shareholder of the company. To date, the Company had entered into
definitive agreements for and completed the issuance of
1,440,922,190 senior convertible preferred shares for an aggregate
amount of US$7.0 million.
In January, 2024, Kai Feng Finance Lease (Hangzhou) Co., Ltd., a
wholly-owned subsidiary of the Company, and Chengdu Tianfu Software
ParkCo., Ltd., entered into an equity transfer agreement for
Jincheng Consumer Finance (Sichuan) Co., Ltd. pursuant to which the
Kaifeng intends to transfer 19% of equity interest in Jincheng
Consumer Finance (Sichuan) Co., Ltd. to Chengdu Tianfu Software
Park Co., Ltd.,. The transaction is closed in April, 2024.
In April, 2024, the current portion of long-term debt amounted to
RMB292.0 million and the related interest payable was settled, out
of which RMB240.0 million was paid by cash and the rest unpaid
amount was waived.
Business Outlook
For the three months ended March 31, 2024, the Company expects its
retail transaction volume to be around 3,100 units and wholesale
transaction volume to be around 900 units. The Company estimates
that its total revenues including retail vehicle sales revenue,
wholesale vehicle sales revenue and value-add-services revenue to
be within the range of RMB300 million to RMB320 million. The
Company expects its gross profit margin to be greater than 6.5%.
These forecasts reflect the Company's current and preliminary views
on the market and operational conditions, which are subject to
changes.
A full-text copy of the press release is available for free at:
https://www.sec.gov/Archives/edgar/data/1729173/000095017024047896/uxin-ex99_1.htm
About Uxin
Uxin is a China-based used car retailer, pioneering industry
transformation with advanced production, new retail experiences,
and digital empowerment. The Company offers vehicles through a
reliable, one-stop, and hassle-free transaction experience. Under
its omni-channel strategy, the Company is able to leverage its
pioneering online platform to serve customers nationwide and
establish market leadership in selected regions through offline
inspection and reconditioning centers.
Shanghai, the People's Republic of China-based
PricewaterhouseCoopers Zhong Tian LLP, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
Aug. 14, 2023, citing that the Company has incurred net losses
since inception and incurred cash outflows from operating
activities during the fiscal year ended March 31, 2023. In
addition, the Company has an accumulated deficit and net current
liabilities as of March 31, 2023. These events and conditions
raise substantial doubt about the Company's ability to continue as
a going concern.
VAIL RESORTS: Moody's Rates New $600MM Sr. Unsecured Notes 'Ba3'
----------------------------------------------------------------
Moody's Ratings assigned a Ba3 rating to Vail Resorts, Inc.'s
proposed new $600 million 8-year senior unsecured notes due 2032.
Vail will utilize the proceeds from the new notes to refinance its
existing $600 million senior unsecured notes due 2025. The
company's existing ratings including the Ba2 Corporate Family
Rating, Ba2-PD Probability of Default Rating and stable outlook are
not affected.
The transaction is credit positive because it will extend the
maturity profile without materially affecting cash interest
expense. Nevertheless, leverage is not affected and free cash flow
is largely unchanged. Vail's gross debt-to-EBITDA leverage is about
3.5x for the last 12 month (LTM) period ended January 31, 2024
(2QFY24) and Moody's expects debt-to-EBITDA leverage will decline
to a low 3x range over the next year through earnings growth.
Vail's high and growing penetration of its Epic Pass products
provides a relatively stable cash flow stream that helps mitigate
weather exposure because passes are purchased in advance of the ski
season. Consumer demand for skiing as well as spending on ancillary
services such as dining, ski schools, and ski rentals remained very
strong in the current ski season despite unfavorable weather
conditions during the first half of the season. Additionally,
Moody's expects the company to maintain very good liquidity over
the next year with $812 million cash at the end of January. The
company has an undrawn $500 million revolver due 2029 issued by
Vail Holdings, Inc. as well as an undrawn C$300 million credit
facility due 2028 that supports the liquidity needs of Whistler
Blackcomb Holdings, Inc. (the "Whistler Credit Agreement"). Vail
generated roughly $50 million in free cash flow after capital
spending and dividends for the LTM period, and Moody's expects free
cash flow to be in the range of $50 to $100 million over the next
year.
The proposed notes and terms of the credit facility contain
provisions that could weaken recovery for the notes in the event of
a default. Specifically, the notes contain a carve-out that allows
the company to provide security on a credit facility that is up to
a principal amount that is the greater of $2.75 billion or 3.5x
EBITDA (as defined in the credit facility). The credit facility
also contains financial maintenance covenants that could provide a
mechanism for the credit facility lenders to obtain a stronger
collateral package than currently exists if a deterioration in
operating performance necessitated an amendment to the covenants.
The company's credit facility (revolver and term loan A) is secured
by the stock of subsidiaries that guarantee both the notes and the
credit facility and not additionally by an asset pledge of those
guarantor subsidiaries. However, the credit facility has a pledge
of stock of various non-guarantor subsidiaries that are owned by
Vail Holdings, Inc., which is the credit facility borrower. The
company estimates that approximately 29% of total reported EBITDA
and 47% of total assets are held by these non-guarantor
subsidiaries as of and for the 12 months ended January 31, 2024.
respectively. The substantial amount of assets and EBITDA at these
non-guarantor subsidiaries would enhance the recovery on the credit
facility relative to the notes if the company were to default with
the existing debt structure. As a result, the Ba3 notes' rating
continues to reflect Moody's view on estimated recovery on the
senior unsecured notes with some loss absorption cushion for the
credit facility.
RATINGS RATIONALE
Vail's Ba2 CFR reflects its moderate financial leverage with
Moody's gross adjusted debt-to-EBITDA of about 3.5x for the
trailing 12 months ended January 31, 2024. Moody's expects gross
debt-to-EBITDA leverage will decline to the low 3x range over the
next year through earnings growth. In addition, the rating is
constrained by operating results that are highly seasonal and
exposed to varying weather conditions and discretionary consumer
spending. The company resumed its dividend in October 2021 after
suspending it at the height of the pandemic in 2020. Vail was very
aggressive with $500 million of share repurchases in FY23 that were
funded by drawing some of the cash built up through debt offerings
to enhance liquidity during the pandemic. Moody's expects Vail will
continue to strategically add to its portfolio through
acquisitions, and expects the company to maintain moderate
leverage, which is strategically important to the company due to
cyclical demand and the desire to maintain dividends.
The Ba2 CFR is supported by Vail's leading position in the North
American ski industry with a very strong portfolio of resorts,
including some premier destinations that attract high income
consumers and can command high prices. Additionally, Vail benefits
from its good geographic diversification and high customer mix.
High and growing Epic Pass penetration provides a stable revenue
stream that helps partially mitigate weather exposure. Furthermore,
the North American ski industry has high barriers to entry and has
shown resiliency during weak economic periods, including the
2007-2009 recession and strong yield management during the
2020-2021 ski season when volume was hurt by pandemic-related
restrictions. Additionally, Moody's expects Vail to maintain very
good liquidity with an $812 million cash balance as of January
2024, sizable unused revolver capacity, and healthy operating cash
flow generation. Very good liquidity provides flexibility to manage
through a period of weak earnings and to reinvest through capital
improvements and acquisitions. Vail also has flexibility to adjust
capital spending depending and dividends on operating performance
to preserve cash if necessary.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that debt-to-EBITDA
leverage will decline to the low 3x range over the next year
through earnings growth. The stable outlook also reflects that the
company's very good liquidity provides flexibility to reinvest and
manage should earnings be weaker than expected.
The ratings could be upgraded if Vail reduces cyclical volatility,
is able to sustain a strong EBITDA margin, and maintains good
facility reinvestment. Vail would also need to sustain gross
debt-to-EBITDA below 3.0x along with very good liquidity to be
upgraded.
The ratings could be downgraded if gross debt-to-EBITDA is
sustained above 4x. Weak reinvestment, visitation declines, or
margin deterioration could also lead to a downgrade. In addition,
if there is a material weakening of liquidity for any reason, or
the company's financial policies become more aggressive, including
undertaking a large debt-funded acquisition, the ratings could be
downgraded.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
Vail Resorts, Inc. is a leading operator of mountain resorts and
regional ski areas, operating 41 mountain resorts, with 36 in the
US, one in Canada, three in Australia and one in Switzerland (55%
controlling interest). The company is publicly traded (NYSE: MTN)
and reported revenue of approximately $2.845 billion for the
trailing 12 months ended January 31, 2024.
VAIL RESORTS: S&P Rates New Senior Unsecured Notes 'BB'
-------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating (the same
level as the long-term issuer credit rating) and '3' recovery
rating to the proposed senior unsecured notes issued by Vail
Resorts Inc. due 2032. The '3' recovery rating indicates S&P's
expectation of meaningful (50%-70%; rounded estimate: 65%) recovery
for lenders in the event of a default. Vail intends to use the
proceeds from the notes to refinance its $600 million outstanding
senior unsecured notes due 2025. At the same time, the company
completed an amendment of its $984 million term loan (not rated) to
extend the maturity to 2029 from 2026.
S&P said, "We continue to assume Vail's S&P Global Ratings-adjusted
net debt to EBITDA will remain between 2.5x and 3x through fiscal
2025 (ending July 2025). Despite reduced skier visitation through
March, Vail lift revenue increased low single-digit percent given
increased sales from from advance commitment products, including
season passes. Additionally, we expect EBITDA margin to remain flat
compared to fiscal 2023 resulting in leverage that remains in the
high-2x area in fiscal 2024. Vail ended fiscal 2023 with S&P Global
Ratings-adjusted leverage of approximately 2.8x. Despite leverage
below our 3.25x upgrade threshold, the stable outlook reflects the
risk the company pursues a more aggressive merger and acquisition
(M&A) strategy and increases shareholder returns through share
repurchases that we haven't incorporated into our base case."
ISSUE RATINGS – RECOVERY ANALYSIS
Key analytical factors
-- S&P's 'BB' issue-level rating and '3' recovery rating on Vail
Resorts' proposed $600 million senior unsecured notes due in 2032
indicate our expectation of meaningful (50%-70%; rounded estimate:
65%) recovery in the event of a payment default.
-- S&P's assume Whistler Blackcomb and Andermatt-Sedrun will be
treated as unrestricted nonguarantor subsidiaries with a 65% stock
pledge to Vail Resorts Inc. and that Peak Resorts will be treated
as a nonguarantor subsidiary with a 100% stock pledge to Vail
Resorts Inc.
-- Vail Resorts' unsecured lenders benefit from modest unpledged
residual equity value (35%) from Whistler Blackcomb and
Andermatt-Sedrun because our estimated distressed value of the
subsidiary assets exceed subsidiary debt claims. There is no
residual value generated from Peak Resorts assets given significant
amounts of outstanding debt at the subsidiary.
-- S&P's simulated default scenario considers a payment default by
2029 due to prolonged economic weakness, significantly reduced
consumer discretionary spending, and a downturn in leisure travel.
-- S&P assumes a reorganization following default and use an
emergence EBITDA multiple of 7x to value the company.
Simulated default assumptions
-- Year of default: 2029
-- EBITDA at emergence: $289 million
-- EBITDA multiple: 7x
Simplified waterfall
-- Net enterprise value after administrative expenses (5%): $1.92
billion
-- Obligor/nonobligor split: 79%/15%/3/3%
-- Estimated secured debt claims: $1.22 billion
-- Value available for secured debt claims: $1.60 billion
--Recovery expectation 90%-100% (rounded estimate: 95%)
-- Estimated unsecured debt claims: $618 million
-- Value available for unsecured debt claims: $412 million
--Recovery expectation: 50%-70% (rounded estimate: 65%)
All debt amounts include six months of prepetition interest.
VBI VACCINES: Perceptive Advisors, 3 Others Report Stakes
---------------------------------------------------------
Perceptive Advisors LLC, Joseph Edelman, Perceptive Life Sciences
Master Fund, Ltd. and Perceptive Credit Holdings, LP disclosed in a
Schedule 13D/A Report filed with the U.S. Securities and Exchange
Commission that as of April 16, 2024, they beneficially owned
common shares of VBI Vaccines. The Shares beneficially owned are as
follows:
Reporting Person Shares Owned Percent of
Class
Perceptive Advisors 1,261,710 4.4%
Joseph Edelman 1,261,710 4.4%
Perceptive Life Sciences 1,261,710 4.4%
Perceptive Credit Holdings 0 0.0%
A full-text copy of the Report is available at
https://tinyurl.com/2z5s9w7n
About VBI Vaccines
VBI Vaccines Inc. -- www.vbivaccines.com -- is a biopharmaceutical
company driven by immunology in the pursuit of powerful prevention
and treatment of disease. Through its innovative approach to
virus-like particles ("VLPs"), including a proprietary enveloped
VLP ("eVLP") platform technology and a proprietary mRNA-launched
eVLP ("MLE") platform technology, VBI develops vaccine candidates
that mimic the natural presentation of viruses, designed to elicit
the innate power of the human immune system. VBI is committed to
targeting and overcoming significant infectious diseases, including
hepatitis B, coronaviruses, and cytomegalovirus (CMV), as well as
aggressive cancers including glioblastoma (GBM). VBI is
headquartered in Cambridge, Massachusetts, with research operations
in Ottawa, Canada, and a research and manufacturing site in
Rehovot, Israel.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2016, issued a "going concern" qualification in its report
dated April 16, 2024, citing that the Company faces several risks,
including but not limited to, uncertainties regarding the success
of the development and commercialization of its products, demand
and market acceptance of the Company's products, and reliance on
major customers. The Company anticipates that it will continue to
incur significant operating costs and losses in connection with the
development and commercialization of its products. The Company has
an accumulated deficit as of December 31, 2023 and cash outflows
from operating activities for the year-ended December 31, 2023 and,
as such, will require significant additional funds to conduct
clinical and non-clinical trials, commercially launch its products,
and achieve regulatory approvals that raise substantial doubt about
its ability to continue as a going concern.
VENUS CONCEPT: Secures $5M Financing Commitment From Madryn Health
------------------------------------------------------------------
Venus Concept Inc. reported in a Form 8-K filed with the Securities
and Exchange Commission that on April 23, 2024, it entered into a
Loan and Security Agreement, by and among Venus Concept USA Inc.
("Borrower"), Venus Concept Canada Corp., Venus Concept Ltd.
("Guarantors"), each lender party thereto and Madryn Health
Partners, LP, as administrative agent. Pursuant to the Loan and
Security Agreement, the Lenders have agreed to provide the Borrower
with bridge financing in the form of a term loan in the original
principal amount of $2,237,906.85 and one or more delayed draw term
loans of up to an additional principal amount of $2,762,093.15.
The Bridge Financing matures on May 26, 2024. Pursuant to the Loan
and Security Agreement, each of the Guarantors, jointly and
severally, absolutely and unconditionally guarantees, as primary
obligor and not merely as surety, that the Obligations (as defined
in the Loan and Security Agreement) will be performed and paid in
full in cash when due and payable, whether at the stated or
accelerated maturity thereof or otherwise, this guarantee being a
guarantee of payment and not of collectability and being absolute
and in no way conditional or contingent.
Borrowings under the Bridge Financing will bear interest at a rate
per annum equal to 12%. On the Maturity Date, the Loan Parties are
obligated to make a payment equal to all unpaid principal and
accrued interest.
The Loan and Security Agreement also provides that all present and
future indebtedness and the obligations of the Borrower to Madryn
will be secured by a priority security interest in all real and
personal property collateral of the Loan Parties.
The Loan and Security Agreement contains customary representations,
warranties and affirmative and negative covenants. In addition,
the Loan and Security Agreement contains customary events of
default that entitle Madryn to cause the Borrower's indebtedness
under the Loan and Security Agreement to become immediately due and
payable, and to exercise remedies against the Loan Parties and the
collateral securing the term loan. Under the Loan and Security
Agreement, an event of default will occur if, among other things,
any Loan Party fails to make payments under the Loan and Security
Agreement, any Loan Party breaches any of the covenants under the
Loan and Security Agreement, a Change of Control (as defined in the
Loan and Security Agreement) occurs, any Loan Party, or its assets,
become subject to certain legal proceedings, such as bankruptcy
proceedings. Upon the occurrence and for the duration of an event
of default, a default interest rate equal to 15.0% per annum will
apply to all obligations owed under the Loan and Security
Agreement.
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated April 1,
2024, citing that the Company has reported recurring net losses and
negative cash flows from operations, that raise substantial doubt
about its ability to continue as a going concern.
VERIFONE SYSTEMS: S&P Alters Outlook to Neg., Affirms 'B-' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based payment and
commerce solutions provider VeriFone Systems Inc. to negative from
stable and affirmed all of its ratings, including its 'B-' issuer
credit rating.
S&P said, "The negative outlook reflects our expectation that the
uncertain demand environment, stemming from industry inventory
digestion, will cause the company's debt to EBITDA to remain
elevated at well above 8x. We also expect VeriFone's growth
challenges and rising tax settlement payments will pressure its
cash flow over the next 12-24 months." The outlook also
incorporates the potential the company will face elevated
refinancing risk when its $2 billion term loan becomes current in
August 2024. A weaker operating performance or an inability to
address this upcoming maturity over the next quarter or two could
pressure our rating.
S&P said, "We expect the company will likely continue to
underperform in 2024, which will further erode its credit quality.
The revenue from VeriFone's Systems segment, which has historically
accounted for about 50% of its total revenue, declined by about 45%
in the first quarter of fiscal year 2024. Lingering
pandemic-related supply chain disruptions have pressured the
company's performance and we believe the adverse effects from
hardware over-ordering will persist for the next couple of
quarters. Given the sharp year-to-date declines in VeriFone's
revenue, we expect the pace of the deterioration in its revenue
will slow over the next couple of quarters.
"As such, we forecast the company's Systems revenue will decline by
30%, its total revenue will fall by about 17%, and its EBITDA
margin will shrink to about 17.5% (compared with about 20% in each
of the two previous fiscal years) in fiscal year 2024. VeriFone has
actioned cost-reduction strategies and we expect it will realize
some cost savings that will help offset the declines in its
revenue. We forecast the company's pro forma EBITDA margin will be
about 19.2% in fiscal year 2024, which incorporates S&P Global
Rating's assumption of about $25 million of unrealized cost
savings. We believe VeriFone is reviewing further cost optimization
that may be upside to our profit margin expectations over the next
12 to 18 months.
"VeriFone's S&P Global Ratings-adjusted debt to EBITDA increased to
about 8.2x as of Jan. 31, 2024, from 7.1x and 7.3x in fiscal years
2023 and 2022, respectively. We expect the company's leverage will
continue to rise to about 8.9x before improving to about 7.7x in
fiscal year 2025 as its Systems revenue rebounds, though the pace
of this recovery is uncertain. We believe the company's
deleveraging will also depend on its achievement of more than $100
million of management-identified cost savings--which will take time
to realize. We expect the company may reinvest the savings in the
business.
"We understand VeriFone is conducting a strategic business review
that might include divestitures, though the timing of any
transaction and the impact to its credit profile are uncertain
currently. We are not aware of any pending transactions.
"The negative outlook reflects our expectation that VeriFone's
hardware inventory will remain elevated such that its Systems
revenue declines by 30% year over year. We also expect the
company's ongoing cash flow deficits will reduce its liquidity
buffer over the next 12 months. VeriFone's rising tax settlement
payments will also further pressure its FOCF. Our outlook also
incorporates the potentially elevated refinancing risk related to
its $2 billion term loan, including its $170 million revolver,
which becomes current in August 2024. VeriFone's weak operating
performance, or an inability to address its upcoming maturities
over the next one to two quarters, will likely lead to further
rating pressure."
S&P could lower its rating on VeriFone if:
-- Its FOCF and liquidity weaken because of a slower-than-expected
recovery in its business such that S&P believes its capital
structure is unsustainable; and
-- S&P believes the company is more likely to pursue a refinancing
transaction that it would deem distressed.
An upgrade is unlikely over the next 12 months given VeriFone's
elevated leverage. That said, S&P could revise its outlook to
stable if:
-- The company's business prospects improve in the near term such
that S&P believes it will expand materially in fiscal year 2025,
improve its FOCF and sustain FOCF to debt in the 1%-3% range, and
we believe it is on track to reduce its debt to EBITDA below 7.5x;
and
-- It refinances its debt at favorable terms such that its FOCF
after debt service remain positive on sustained basis.
Governance factors have a moderately negative effect on S&P's
credit analysis of VeriFone. This is due to the company's ownership
by a controlling owner, which may lead to decision making that
promotes the interests of its private-equity owner.
VIDEO RIVER: Reports $496,026 Net Income in 2023
------------------------------------------------
Video River Networks, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net income
for the year ended December 31, 2023, of $496,026 compared to net
income of $767,121 for the year ended December 31, 2022.
As of Dec. 31, 2023, the Company had $3,820,398 in total assets,
$329,784 in total current liabilities, and $3,490,614 in total
stockholders' equity.
Newhall, California-based DylanFloyd Accounting & Consulting, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated April 15, 2024, citing that the
Company has an accumulated deficit of $15,898,383 for the year
ended December 31, 2023. These factors raise substantial doubt
about the Company's ability to continue as a going concern.
A full-text copy of the Company's Form 10-K is available at
https://tinyurl.com/mudntf32
About Video River
Headquartered in Torrance, California, Video River Networks, Inc.
is a technology firm that operates and manages a portfolio of
Electric Vehicles, Artificial Intelligence, Machine Learning and
Robotics ("EV-AI-ML-R") assets, businesses and operations in North
America. The Company's target portfolio businesses and assets
include operations that design, develop, manufacture and sell
high-performance fully electric vehicles and design, manufacture,
install and sell Power Controls, Battery Technology, Wireless
Technology, and Residential utility meters and remote,
mission-critical devices mostly engineered through Artificial
Intelligence, Machine Learning and Robotic technologies.
VISTRA CORP: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' Long-Term Issuer Default
Ratings (IDRs) of Vistra Corp. and Vistra Operations Company, LLC.
The Rating Outlook is Stable. Fitch has also affirmed Vistra Ops.'s
senior secured debt at 'BBB-'/'RR1' and senior unsecured debt at
'BB'/'RR4', and Vistra's preferred stock at 'B+'/'RR6'. In
addition, Fitch has affirmed the rating for the Pre-Capitalized
Trust Securities (P-Caps) issued by Palomino Funding Trust I at
'BBB-/RR1'.
The ratings and Outlook reflect Fitch's expectation that EBITDA
leverage will remain in the 4.0x to 3.5x range following the
acquisition and integration of Energy Harbor (EH) nuclear and
retail assets. Although the addition of EH's assets provides
diversification away from Vistra's retail and generation
concentration in ERCOT, and adds 4GW of carbon free generation to
Vistra's fleet, Vistra's credit profile is expected to remain in
line with a 'BB' rating over Fitch's forecast period.
KEY RATING DRIVERS
Strong Demand Supports 2023 Results: Per Fitch's calculations,
Vistra's 2023 EBITDA leverage was at 3.8x vs. 4.5x in 2022. The
improved leverage was driven by strong operating results across
both the retail and wholesale segment. Increased demand (partially
due to extremely warm summer weather), coupled with above market
hedges, and a decrease in liquidity requirements due to a reduction
in the average collateral requirements vs. 2022, supported leverage
improvement.
Natural gas and power prices have fallen from their highs in 2022,
resulting in a release of collateral requirements in 2023. As of
the end of the 4Q23, Vistra had around $1.2 billion of cash
collateral postings, which is close to historical averages. Strong
generation demand, well above historical averages in the past
decade, is spurred by data centers and overall economic growth
driven by industrial and population growth in Texas, Vistra's
primary market.
Acquisition Provides Diversification: Fitch views the acquisition
of EH as positive for Vistra's credit profile. The acquisition of
four nuclear units across three sites located in PJM provides
geographical diversification, while adding strong baseload assets
to Vistra's generation portfolio, including relatively low fuel
cost dynamics and assets that run at capacity factors over 90%.
The Inflation Reduction Act (IRA) establishes a nuclear Production
Tax Credit (PTC) mechanism, thereby providing a revenue floor for
nuclear plants. Fitch believes the nuclear PTCs provide a key
credit strength. EH's assets, including synergies from integration,
should contribute close to 20% of Vistra's consolidated EBITDA by
2025.
Despite the positive aspects of nuclear assets, Fitch believes
nuclear generation has higher operating risk. EH's nuclear fleet is
mature with an average age of over 40 years. However, plants are
permitted for the next 20+ years, excluding the Perry facility,
which is currently in the process of license renewal. No nuclear
asset in the U.S. has failed to be permitted in the last 30 years.
Fitch believes the company's strong operating performance record
largely mitigates re-licensing risk. Over the last five years, EH's
average outage rates have been lower than 5%. Fitch believes the
company can reliably generate about 32TWh of power annually.
Hedges Provide Earnings Visibility: Vistra (standalone) is well
hedged for 2023 to 2025 (~99% hedged for 2024 and 87% hedged for
2025), bolstering Vistra's ongoing operations adjusted EBITDA
expectations. The addition of EH's nuclear assets provides
additional revenue security supported by Nuclear PTCs starting in
2024, providing a high degree of revenue visibility for those
assets.
In addition, Vistra's retail business provides revenue stability
with relatively high renewal rates and stable margins, in
particular, given its strong presence in Texas. Retail margins in
the commercial and industrial segments generally remain range-bound
during commodity cycles, and residential retail margins are usually
countercyclical, given the length and stickiness of the customer
contracts. TXU Energy Company LLC, Vistra's largest retail
electricity operation in Texas, has demonstrated strong brand
recognition, tailored customer offerings and effective customer
service, which are driving high customer retention and growth.
Measures to Mitigate Extreme Weather Risks: Management has taken
favorable steps to address gas deliverability and fuel handling
issues, which were key drivers of Vistra's financial loss in
February 2021 due to winter storm Uri. Steps taken include
additional weatherization of the generation fleet, including coal
fuel handling, installing dual fuel capabilities at gas steam
units, expanding fuel oil inventory at existing dual fuel
combustion turbine sites, contracting for additional natural gas
storage and maintaining greater generation length during peak
periods.
According to the company, it has spent more than required by Texas
regulations following implementation of provisions of Senate Bill
3. The bill was enacted to make the Texas electric system more
resilient to extreme weather events following winter storm Uri.
Vistra's fleet has not experienced any significant failure during
extreme weather events, including December 2022 winter storm Elliot
in PJM and the most recent Texas winter storm Heather in January
2024.
Texas Market Reforms: Several market reliability and pricing
options are under consideration by the Texas legislature, including
a Performance Credit Mechanism (PCM) to financially compensate
resources for their availability during ERCOT's tightest system
condition. PCMs would require load-serving entities to purchase, at
a centrally determined clearing price, credits from generators that
supply power during high risk hours.
House Bill 1500 caps the net cost of PCM to consumers at $1
billion, creates minimum performance requirements for generators
and requires ERCOT to create a new service for dispatchable
resources to provide flexibility to address intra-hour operational
challenges. In November 2023, the constitutional amendment was
passed approving creation of Texas Energy fund that provides up to
$5 billion of low interest rate loans and completion bonuses to new
dispatchable generation in Texas Senate Bill 2627. Vistra is
currently evaluating whether they should participate in the
program. Capex investments related to Vistra's potential
participation in the program are not reflected in Fitch
projections.
Fitch views any market reforms that incentivize dispatchable
generation as potentially positive for Vistra. Fitch does not
project any benefit from PCM or any other mechanism to improve
capacity reserves to manage load and intermittent resource output
uncertainty to Vistra. The ultimate structure is not clear and
potential implementation could take a couple of years.
Variation from Criteria: Fitch's "Corporate Rating Criteria," dated
Oct. 28, 2022, outlines and defines a variety of quantitative
measures used to assess credit risk. Per criteria, Fitch's
definition of total debt is all encompassing. However, Fitch's
criteria is designed to be used in conjunction with experienced
analytical judgment, and as such, adjustments may be made to the
application of the criteria that more accurately reflects the risks
of a specific transaction or entity.
Fitch does not consider the P-Caps as debt, which is a variation
from its "Corporate Rating Criteria" definition of total debt.
Absent the exercise of the issuance right, P-Caps are treated as
off-balance sheet for analytical purposes and excluded from Fitch's
leverage and interest coverage metrics. If Vistra Ops were to
exercise issuance rights, the amount of debt issued to the trust
would be included in Vistra's total debt calculation and therefore
its credit metrics.
DERIVATION SUMMARY
Vistra is well-positioned relative to Calpine Corporation
(B+/Stable) and NRG Energy (BB+/Stable) in terms of size, scale and
geographic and fuel diversity. Vistra is the largest independent
power producer in the country, with approximately 40GW of
generation capacity compared with Calpine's 26GW. Vistra's
generation capacity is well-diversified by fuel, compared with
Calpine's natural gas-heavy portfolio. Vistra's portfolio is less
diversified geographically, with more than 70% off its consolidated
EBITDA coming from operations in Texas, while Calpine's fleet is
more geographically diversified across PJM, Texas and California.
The addition of EH will provide diversification from Texas and a
larger presence in PJM, a credit positive. In addition, EH's
nuclear fleet supported by federal nuclear PTC program provides a
high degree of revenue visibility for the next decade. NRG's
acquisition of Vivint will continue the company's transformation
from its origins as a power generator and provide additional
revenue channels, further diversifying NRG's revenue stream
compared to Vistra.
Vistra, like NRG benefits from its ownership of large and well
entrenched retail electricity businesses in Texas, compared to
Calpine, which has a smaller retail business. Calpine's younger and
predominant natural gas fired fleet bears less operational and
environmental risk compared to Vistra's portfolio that also has
nuclear and coal generation assets. In addition, Calpine's EBITDA
is more resilient to changes in natural gas prices and heat rates
as compared to its peers. NRG is short generation compared to
Vistra and Calpine, and serves load from sources other than its own
generation.
Fitch projects Vistra's leverage to remain in the range of
3.5x-4.0x in 2024-2026, which compares favorably to Calpine's
leverage, which is forecasted to remain around 5.0x. Fitch expects
NRG to allocate FCF to maintain leverage within rating thresholds
of 3.0x-3.5x beyond 2023.
KEY ASSUMPTIONS
- Acquisition of EH for $3 billion cash and a 15% equity interest
in Vistra Vision in March 2024;
- Hedged generation in 2024 -2026 per management's guidance;
- Power prices in key markets such as PJM and ERCOT at a discount
to current forward prices;
- Annual retail load of approximately 135 TWh;
- Capacity revenues per past auction results; future PJM capacity
auctions in-line with the last auction results;
- Total capex including nuclear fuel of about $5.3 billion over
2024-2026;
- Nuclear fuel hedged in-line with company's guidance;
- Share repurchases of approximately $3.3 billion over 2024-2026;
- Common dividends of about $300 million annually;
- Run rate synergies of about $130 million by 2026;
- Dividends to Energy Harbor shareholders about $180 million
annually, with 2024 pro-rated; 15% of total free cash flow from
Vistra Vision;
- Implied coupon for new debt issued between 6%-6.5%.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- While Fitch does not anticipate positive rating actions in the
near to medium term, demonstrated EBITDA leverage lower than 3.5x
on a sustainable basis coupled with track record of stable EBITDA
generation and continued emphasis on an integrated wholesale-retail
platform could lead to a positive rating action.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Gross debt/EBITDA above 4.0x on a sustained basis;
- Weaker power demand and/or higher than expected supply depressing
wholesale power prices and capacity auction outcomes in its core
regions;
- Unfavorable changes in regulatory constructs and markets;
- Lack of access to adequate liquidity to meet collateral
requirements;
- An aggressive growth strategy that diverts a significant
proportion of FCF toward merchant generation assets and/or
overpriced retail acquisitions.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: As of Dec. 31, 2023, the company had
approximately $5.8 billion of liquidity available consisting of
$3.5 billion of cash in hand and around $2.3 billion was available
under various revolving facilities. There were no short-term
borrowings outstanding under the Commodity-Linked Facility and the
Revolving Credit Facility as of Dec. 31, 2023. Vistra's revolving
credit facility agreement, has a $3.175 billion commitment expiring
in April 2027.
The Commodity-Linked Facility matures in October 2024 and has
aggregate available commitments of $1.575 billion. As of Dec. 31,
2023, the borrowing base under the facility was $1.1 billion, which
is lower than the facility limit of $1.575 billion. The reduction
in the borrowing base is due to a decrease in commodity prices and
would increase in size in a rising commodity price environment in
accordance with the terms of the facility.
The increase in cash as of Dec. 31, 2023 includes proceeds from the
issuance of $1.75 billion and $750 million principal amount of
Vistra Operations senior secured and senior unsecured notes in
September 2023 and December 2023, respectively. Proceeds from the
September 2023 issuance were used, together with cash on hand, to
fund the acquisition. Proceeds from the December 2023 issuance were
used to settle the Senior Secured Notes Tender Offers in January
2024.
The company issued $1.5 billion of debt in mid-April. The proceeds
will be used to pay off 2024 maturities as they mature later this
year. The refinancing declines to $750 million in 2025 and $1.0
billion in 2026.
Vistra Operations' first-lien secured debt receives an upstream
guarantee from the asset subsidiaries under Vistra Operations,
which consists of a substantial portion of property, assets and
rights owned by Vistra Operations.
The secured notes have a security fall away provision wherein the
collateral securing the notes will be released if Vistra's senior
unsecured notes obtain an investment-grade rating from two out of
the three rating agencies. The fall away provision will be reversed
if the investment grade ratings for the senior unsecured notes are
withdrawn or downgraded below investment grade.
Fitch considers all the secured debt issued at Vistra Operations to
be a category 1 first-lien debt, thus assigning it a 'BBB-'/'RR1'
rating. Following acquisition of Energy Harbor, Vistra Operations'
secured debt is secured by the remaining fossil assets at Vistra
Operations and equity interest in Vistra Vision and by a secured
claim on Vistra Vision's intercompany note.
The preferred stocks series A, B and C receive 50% equity credit
based on Fitch's "Corporate Hybrids Treatment and Notching
Criteria". The features supporting 50% equity credit include an
ability to defer dividend payments on the preferred stock for at
least five years and cumulative feature of deferred dividends.
There is no ability for the preferred stock holder to cause
acceleration or mandatory prepayment in the event of change of
control trigger event, which is defined as both change in control
and a ratings decline.
ISSUER PROFILE
Vistra is the largest independent power generator in the U.S. with
approximately 40 GW of capacity. Vistra Retail is one of the
largest retail providers in the country with roughly 135 TWHs of
load and approximately five million customers.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Vistra Corp. LT IDR BB Affirmed BB
Preferred LT B+ Affirmed RR6 B+
Palomino
Funding Trust I
senior secured LT BBB- Affirmed RR1 BBB-
Vistra Operations
Company, LLC LT IDR BB Affirmed BB
senior secured LT BBB- Affirmed RR1 BBB-
senior unsecured LT BB Affirmed RR4 BB
VRC2735 LLC: Case Summary & Two Unsecured Creditors
---------------------------------------------------
Debtor: VRC2735, LLC
6272 Route 191
Cresco PA 18326
Business Description: The Debtor is engaged in activities related
to real estate. The Debtor owns a 16
bedroom single-family home converted to
commercial use located in Canadensis,
Pennsylvania having an appraised value of
$925,000.
Chapter 11 Petition Date: April 24, 2024
Court: United States Bankruptcy Court
Middle District of Pennsylvania
Case No.: 24-01019
Debtor's Counsel: J. Zac Christman, Esq.
J. ZAC CHRISTMAN, ESQUIRE
538 Main Street, Suite 102
Stroudsburg PA 18360
Tel: (570) 234-3960
Fax: (570) 234-3975
E-mail: zac@jzacchristman.com
Total Assets: $925,000
Total Liabilities: $1,269,428
The petition was signed by Svetlana Hanover as owner/member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's two unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/XBLBRDY/VRC2735_LLC__pambke-24-01019__0001.0.pdf?mcid=tGE4TAMA
W.F. JACKSON: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: W.F. Jackson Construction Company, Inc.
11708 GA Hwy 24 West
Sandersville, GA 31082
Business Description: The Debtor is a general contractor in
Georgia.
Chapter 11 Petition Date: April 25, 2024
Court: United States Bankruptcy Court
Middle District of Georgia
Case No.: 24-50593
Judge: Hon. Robert M. Matson
Debtor's Counsel: Matthew S. Cathey, Esq.
STONE & BAXTER, LLP
577 Third Street
Macon, GA 31201
Tel: 478-750-9898
Fax: 478-750-9899
Email: mcathey@stoneandbaxter.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by William F. Jackson, Jr. as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/FT5U2VA/WF_Jackson_Construction_Company__gambke-24-50593__0001.0.pdf?mcid=tGE4TAMA
WATERBRIDGE NDB: Fitch Assigns 'B+' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned WaterBridge NDB Operating, LLC (WB NDB)
a first-time Long-Term Issuer Default Rating (IDR) of 'B+', and
'BB'/'RR2' to WB NDB's proposed secured term loan B.
Proceeds from the proposed loan offering will be used for the D.K.
Boyd acquisition, debt refinancing, capex and general corporate
purposes. Fitch has reviewed the preliminary material related to
the proposed loan. The assigned ratings assume there will be no
material variation from the draft previously provided. The Rating
Outlook is Stable.
WB NDB's rating reflects its modest size in terms of EBITDA
generation and volumetric risk with operations within the volatile
water services midstream subsector. These factors are contrasted
against the company's low EBITDA leverage, positioning the company
comfortably in the 'B+' rating category. The Stable Outlook
reflects Fitch's expectations of growing volumes into 2024,
particularly on WB NDB's Delaware acreage which is in line with
Fitch's prick deck.
KEY RATING DRIVERS
Volumetric Exposure: Almost all of WB NDB's revenues are derived
from contracts that lack minimum volume commitments. For WB NDB's
predominantly fixed-fee contracts, volumes are supported by acreage
dedications in the Delaware sub-basin of the Permian, and Eagle
Ford formation region in South Texas. While fixed-fee contracts
provide protection from direct commodity price exposure, volumes
have indirect price risk in the event drilling on WB NDB's
dedicated acreage becomes uneconomic and customers decide to move
rigs elsewhere.
Low Leverage: Management has a forecast for the first full year of
operations incorporating the Devon contributed assets shows EBITDA
of approximately $140 million in 2024. EBITDA growth will also
benefit from the incorporation of the DK Boyd asset acquisition.
Fitch expects the company may be challenged to achieve this
forecast. Fitch expects YE 2024 leverage to be in the area of
5.0x.
The Fitch price deck for WTI oil remains supportive of continued
producer activities in both WB NDB's geographies, with growth
primarily expected from the Delaware basin operations. Fitch
expects WB NDB's Eagle Ford customer volumes to remain relatively
flat. As WB NDB's system is already largely built out, capex is
expected to drop after 2024.
Limited Size and Scope: Fitch regards WB NDB's EBITDA generation to
grow to approximately $120 million in 2024. This level of EBITDA is
broadly consistent in the Fitch midstream coverage with a rating in
the 'b' rating category, rather than the 'bb' category. The ratings
recognize modest geographic diversity with operations across two
basins. WB NDB does not have business line diversity as primarily
all revenues are derived from produced water management.
Size is considered an important metric by Fitch as size and
diversity of operations and provide fewer levers to pull during
challenging economic cycles. Fitch expects the DK Boyd assets to
account for roughly 15% of EBITDA with the balance generated from
the legacy WB NDB and contributed Devon assets.
Devon Asset Contribution: As part of the formation of the joint
venture between Devon Energy Corporation (Devon; BBB+/Stable) and
NDB Holdings LLC, (NDB Holdings; not rated; a wholly owned by
private equity investee of Five Point Energy), Devon contributed
its Delaware basin water midstream assets so as to combine assets
with NDB Holdings' assets. Further, Devon agreed to a 15-year
acreage dedication in exchange for 30% equity interest in WB NDB
which WB NDB management expects will add about $45 million of
incremental EBITDA.
The majority of budgeted capex for 2023 and 2024 is being spent to
further integrate Devon's assets with WB NDB's current system in
addition to the build-out of a new header system and incremental
salt water disposal wells (SWDs). Fitch views favorably WB NDB's
relationship with its part owner and largest customer, Devon; that
said, no explicit rating linkage exists between Devon and WB NDB.
Moderate Customer Diversification: WB NDB has acreage dedications
with several large investment grade customers with modest
diversification compared to gathering and processing focused peers.
The company is exposed to customer concentration as its three
largest customers expected to account for approximately half of
revenues by 2024. M&A activity has remained active over the past
few years which is an overall positive for WB NDB's counterparty
credit profile. Nearly all of WB NDB's producer contracts are fixed
fee with CPI escalators slightly offsets rising costs due to
inflation.
DERIVATION SUMMARY
The closet peer for WB NDB is its sister company WaterBridge
Midstream Operating LLC (WATOPE) which is also a pure play water
solutions business. WATOPE is rated one-notch below WB NDB at
'B'/Stable. Both companies generate essentially 100% of revenues
from fixed-fee contracts and have similar counterparty
concentration as well as counterparty credit quality. In terms of
EBITDA generation, WATOPE is expected to generate over twice the
EBITDA as WB NDB in 2023. Fitch anticipates the EBITDA size gap
closing slightly by YE 2024 as WB NDB benefits from a full year of
the Devon contribution and the acquisition of the D.K. Boyd water
assets.
Geographically WB NDB and WATOPE both generate the majority of
their EBITDA from the Delaware basin although Fitch notes WB NDB's
northern Delaware basin operations are located in a region with
stronger production economics than WATOPE's southern Delaware basin
assets. Additionally, the Eagle Ford has superior production
economics compared to WATOPE's Arkoma asset footprint where
production is driven by natural gas prices rather than WTI. As
such, Fitch regards WB NDB as having the stronger asset base than
WATOPE. Leverage at WATOPE is expected to range near 6x at YE 2023
which is roughly over two full turns higher than WB NDB. While
WATOPE is larger in terms of size, the one notch rating difference
is justified due to WB NDB's significantly lower leverage and
stronger asset footprint.
NGL Energy Partners LP (B/Stable) is another peer which generates
the majority of EBITDA from its water solutions segment. Like WB
NDB, NGL benefits from the strategic location of its water assets
in the Permian basin. While NGL is a larger company in terms of
size generating over $500 million of EBITDA, and scale with more
business segments and geographic diversification, the company has
greater commodity price risk exposure. Approximately 20% of NGL's
Water Solutions segment revenue comes from the sale of skim oil.
Additional over 20% of NGL's FYE 2023 EBITDA is generated from
NGL's Crude Logistics and Liquids segment. These business lines
have higher commodity price risk exposure in addition to volumetric
risk, comparing less favorably to WB NDB which is primarily exposed
to volumetric risk. NGL's higher commodity price risk is partially
mitigated by the approximately 33% of pipeline contracts back by
minimum volume commitments.
NGL also has higher financial risk than WB NDB with a more complex
capital structure which includes several series of preferred
shares. In comparison WB NDB has a simple capital structure and
Fitch expects leverage to remain around 5.0x in 2024, which is
approximately a full turn below its forecast for NGL's FY24. The
one-notch difference in the IDRs of these two companies is
justified by WB NDB's lower business and financial risks.
Geographically similar to WB NDB, Medallion Midland Acquisition,
L.P (B+/Stable) is a Permian Basin focused midstream services
company. Medallion's operations focus on crude oil gathering and
transportation within Texas which differ from WB NDB's produced
water disposal activities. Like WB NDB, Medallion is also subject
to volumetric risk, although Medallion does not have any direct
commodity price exposure and has some MVCs. WB NDB also has some
exposure related to the sale of skim oil which has comparatively
higher direct commodity price exposure. Fitch regards WB NDB as
having higher business risk compared to Medallion.
Within the Permian basin Medallion operates in Midland sub-basin.
WB NDB only has operations in the Delaware basin with some
diversity to the Eagle Ford basin in east Texas. Fitch takes a more
constructive view on long-term volumes in the Midland than in the
Eagle Ford. Like WB NDB Medallion's ratings are limited by its
relatively small size with EBITDA generation below $300 million and
customer diversification is modest. In terms of leverage Fitch
expects Medallion to achieve its leverage at or below 4.0x in 2023
comparing well to WB NDB's leverage profile in 2023.
KEY ASSUMPTIONS
- Fitch price deck for West Texas intermediate oil price of $75/bbl
in 2024, $65/bbl in 2025, $60/bbl in 2026 and 2027;
- Base interest rate applicable to the revolving credit facility
and term loan reflects the Fitch Global Economic Outlook, 4.75% for
2024, and 3.50% in 2025 e.g.;
- Legacy Delaware produced water average annual single digit volume
growth by 2024 compared to 2023 following integration of Devon
operations and then tapering off in latter forecast years. Eagle
Ford volumes are not a driver of volumetric growth over the
forecast period;
- Aside from DL Boyd in 2024, no significant acquisitions assumed;
- Capex spending in line with management's expectations.
RECOVERY ANALYSIS
The recovery analysis uses assumptions that cause WB NDB to be
considered a going-concern in bankruptcy. Fitch has assumed a 10%
administrative claim (standard). The going-concern EBITDA estimate
of around $95 million, reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
valuation of the company. As per criteria, the going concern EBITDA
reflects some residual portion of the distress that caused the
default.
Fitch used a 6.0x EBITDA multiple is in line with reorganization
multiples for the energy sector. There have been limited bankruptcy
and reorganizations within the midstream space but two
bankruptcies, Azure Midstream and Southcross Holdings LP (2016) had
multiples between 5.0x and 7.0x, ascertained by Fitch's best
efforts attempts at devising estimates.
More recently, yet away from the midstream sub-sector of Energy, in
its recent Bankruptcy Case Study Report, 'Energy, Power and
Commodities Bankruptcies Enterprise Value and Creditor Recoveries'
published in September 2023, the median enterprise valuation exit
multiplies for 51 energy cases for which this data was available
was 5.3x, with a wide range of multiples observed.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- While a positive rating action is not expected in the near-term
given the small size and scale, Fitch could consider a positive
rating action if there is a meaningful increase in EBITDA along
with EBITDA leverage expected to be below 4.0x on a sustained
basis;
- Should the contribution from minimum volume commitment contracts,
as a percentage of total EBITDA, be expected to significantly
increase from current levels.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Actual or forecasted EBITDA leverage above 6.0x;
- Volume declines (trailing quarterly) in WB NDB's Delaware basin
system, except if caused by one-off events;
- A significant increase in capex, targeted towards higher business
risk projects;
- An acquisition or acquisitions that meaningfully raise the
business risk of WD NDB.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch considers WB NDB to have adequate
liquidity following the closing of this transaction. The company
will have a $100 million senior secured revolving credit facility
that matures in five years upon closing. No borrowings are expected
to be drawn on the RCF at close. In addition to the availability
under an undrawn RCF, WB NDB is anticipated to have a sizable cash
balance upon the close of this transaction. As of the quarter ended
Dec. 31, 2023, cash and cash equivalents were approximately $12.9
million. There are no near-term maturities following the proposed
transaction.
WB NDB is expected to use the remaining balance of the term loan
proceeds to prefund capex and for general corporate purposes. The
term loan requires 1% per annum mandatory amortization and requires
the company to maintain a debt service coverage ratio (DSCR), as
defined in the agreement, of above 1.1x.
ISSUER PROFILE
WaterBridge NDB Operating LLC provides water services to oil & gas
producers in the Norther Delaware and Eagle Ford basins.
DATE OF RELEVANT COMMITTEE
19 April 2024
ESG CONSIDERATIONS
WaterBridge NDB Operating LLC has an ESG Relevance Score of '4' for
Group Structure due to related party transactions with affiliate
companies, which has a negative impact on the credit profile, and
is relevant to the rating[s] in conjunction with other factors.
WaterBridge NDB Operating LLC has an ESG Relevance Score of '4' for
Financial Transparency due to private equity ownership resulting in
less structural and financial disclosure transparency than publicly
traded issuers, which has a negative impact on the credit profile,
and is relevant to the rating[s] in conjunction with other
factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
WaterBridge NDB
Operating LLC LT IDR B+ New Rating
senior secured LT BB New Rating RR2
WISCONSIN & MILWAUKEE: Hires Richman & Richman LLC as Counsel
-------------------------------------------------------------
Wisconsin & Milwaukee Hotel LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Wisconsin to employ
Richman & Richman LLC as counsel.
The firm's services include:
a. advising the Debtor with respect to its power and duties as
Debtor in possession and the continued management and operation of
its businesses and properties;
b. assisting the Debtor with the continuation of DIP
operations and monthly reporting requirements;
c. advising the Debtor and taking all necessary action to
protect and preserve the Debtor's estate;
d. preparing amendments to bankruptcy schedules, statements of
financial affairs, and all related documents as necessary;
e. assisting with the preparation of a plan of reorganization
and the related negotiations and hearings;
f. preparing pleadings in connection with the chapter 11
case;
g. analyzing executory contracts and unexpired leases, and the
potential assumptions, assignments, or rejections of such contracts
and leases;
h. advising the Debtor in connection with any potential sale
of assets;
i. appearing at and being involved in various proceedings
before this court; and
j. analyzing claims and prosecuting any meritorious claim
objections.
The firm will be paid at these rates:
Michael P. Richman, Partner $750 per hour
Claire Ann Richman, Partner $575 per hour
Eliza M. Reyes, Associate $450 per hour
David T. Fowle, Paralegal $195 per hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
The firm received from the Debtor an advance retainer of $43,000.
As disclosed in court filings, Richman & Richman is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Claire Ann Richman, Esq.
Richman & Richman LLC
122 W. Washington, Suite 850
Madison WI 53703
Tel: (608) 630-8990
Email: crichman@randr.law
About Wisconsin & Milwaukee Hotel LLC
Wisconsin & Milwaukee Hotel LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D. Wisc. Case No. 24-21743)
on April 9, 2024. In the petition signed by Mark Flaherty, as
manager, the Debtor disclosed up to $50 million in both assets and
liabilities.
Judge G. Michael Halfenger oversees the case.
Michael P. Richman, Esq., at RICHMAN & RICHMAN LLC, represents the
Debtor as legal counsel.
Y.Z.P. INC: Maria Yip Named Subchapter V Trustee
------------------------------------------------
The U.S. Trustee for Region 21 appointed Maria Yip, a certified
public accountant and managing partner at Yip Associates, as
Subchapter V trustee for Y.Z.P., Inc.
Ms. Yip will be paid an hourly fee of $450 for her services as
Subchapter V trustee and will be reimbursed for work-related
expenses incurred.
Ms. Yip declared that she is a disinterested person according to
Section 101(14) of the Bankruptcy Code.
The Subchapter V trustee can be reached at:
Maria M. Yip
2 S. Biscayne Blvd., Suite 2690
Miami, FL 33131
Tel: (305) 569-0550
Email: myip@yipcpa.com
About YZP Inc.
YZP, Inc. filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-13582) on
April 15, 2024, listing up to $50,000 in assets and up to $10
million in liabilities.
Judge Laurel M. Isicoff oversees the case.
The Bankruptcy Law Offices of James Schwitalla, PA represents the
Debtor as counsel.
[^] BOOK REVIEW: Charles F. Kettering: A Biography
--------------------------------------------------
Author: Thomas Alvin Boyd
Publisher: Beard Books
Softcover: 280 pages
List Price: $34.95
Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981335/internetbankrupt
Charles Kettering was born on a farm in northern Ohio in 1876. He
once said, "I am enthusiastic about being an American because I
came from the hills in Ohio. I was a hillbilly. I didn't know at
that time that I was an underprivileged person because I had to
drive the cows through the frosty grass and stand in a nice warm
spot where a cow had lain to warm my (bare) feet. I thought that
was wonderful. I walked three miles to the high school in a little
village and I thought that was wonderful, too. I thought of all
that as opportunity. I didn't know you had to have money. I
didn't know you had to have all these luxuries that we want
everybody to have today."
Charles Kettering is the embodiment of the American success story.
He was a farmer, schoolteacher, mechanic, engineer, scientist,
inventor and social philosopher. He faced adversity in the form of
poor eyesight that plagued him all his life. He was forced to drop
out of college twice due to his vision before completing his
electrical engineering degree.
Kettering went on to become a leading researcher for the U.S.
automotive industry. His company, Dayton Engineering Laboratories,
Delco, was eventually sold to General Motors and became the
foundation for the General Motors Research Corporation of which
Kettering became vice president in 1920. He is best remembered for
his invention of the all-electric starting, ignition and lighting
system for automobiles, which replaced the crank. It first
appeared as standard equipment on the 1912 Cadillac.
Kettering held more than 300 patents ranging from a portable
lighting system, Freon, and a World War I "aerial torpedo," to a
device for the treatment of venereal disease and an incubator for
premature infants. He conceived the ideas of Duco paint and ethyl
gasoline, pursued the development of diesel engines and solar
energy, and was a pioneer in the application of magnetism to
medical diagnostic techniques.
This book shows the wisdom and common sense of Kettering's approach
to engineering and life. It received favorable reviews when was
first published in 1957. The New York Times called it an
"old-fashioned narrative biography, written in clean, straight-line
prose-no nuances, no overtones, .but with enough of Kettering's
philosophy and aphorisms, his tang and humor, to convey his
personality." The New York Herald Tribune Book Review said,
"(t)his lively book is particularly successful in its reflection of
Kettering's restless, searching mind and tough persistence."
Kettering once showed a passing tramp the "fun" of digging holes
properly and gave him a job. The man, then promoted to foreman,
later told Kettering, "(i)f only years ago someone had taught me
how much fun it is to work, when a fellow tries to do good work, I
would never have become the bum I was." Kettering once advised,
".whenever a new idea is laid on the table it is pushed at once
into the wastebasket. (i)f your idea is right, get to that
wastebasket before the janitor. Dig your idea out and lay it back
on the table. Do that again and again and again. And after you
have persisted for three or four years, people will say 'Why, it
does begin to look as through there is something to that after
all.'"
Charles Kettering died on November 24, 1958.
Thomas Alvin Boyd was a chemical engineer and a member of Charles
Kettering's research staff for more than 30 years.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2024. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***