Final Bell Holdings International Ltd. announced that it has entered into a loan agreement dated August 17, 2022 with Golden Iris International Limited, which provides for a senior secured term loan facility of USD 25 million. The Term Loan is guaranteed by Final Bell Holdings Inc., Final Bell Canada Inc. and various affiliates thereof, and will be secured by a first ranking security interest in substantially all of the Company's and the Guarantors' assets.
The proceeds of the Term Loan will be used by the Company to repay the outstanding senior secured convertible notes of the Company due 2022 plus all accrued interest, costs and expenses related thereto, including the previously announced amendment fee, finance growth initiatives, pay the cash portion of the purchase price for the acquisition of FB Canada, and provide for ongoing working capital requirements. Although all conditions precedent for the Term Loan have been satisfied, funding of the Term Loan has been delayed pending completion of certain internal administrative requirements of the Lender. The Lender has confirmed to the Company that funding in full of the Term Loan shall occur in short order, and in any case within the next two weeks. As a result of these delays, the Company has been unable to repay the amounts owing on the Secured Notes by their maturity date of August 17, 2022. While this
constitutes an event of default under the terms of the indenture governing the Secured Notes dated as of November 17, 2021, as amended and supplemented, the Company has been in close discussions with the holders of the Secured Notes and their trustee in order to provide assurances that the refinancing package is secure and the Secured Notes will be repaid shortly. While there are no assurances that the holders of the Secured Notes will refrain from seeking enforcement under the terms of the Secured Notes Indenture, the Company believes that it has made the necessary arrangements to repay all amounts owing and will provide an update when this has been completed.