The US Bankruptcy Court gave an order to Novation Companies, Inc. to obtain DIP financing on an interim basis on August 15, 2023. As per the order, the debtor has been authorized to obtain a credit facility in the amount of $0.90 million out of $1.77 million from Nighthawks Holdings I, LLC acting as lender and administrative agent. The DIP loan would either carry an interest rate of 13% p.a., along with an additional 3% p.a. interest in the event of default.

As per the terms of the DIP agreement, there is a DIP credit facility fee equal to $106,200. The DIP facility would mature either on 90 days i.e. or November? ?11?, ?2023, on the effective date of the plan or on the date of consummation of the sale of substantially all assets, whichever is earlier.

Adequate protection would be provided to the DIP lenders in the form of super-priority administrative expense claims which is subject to a carve-out of $0.05 million towards unpaid professional fees / administrative expenses and first priority lien upon and security interest in the debtor?s collateral. The final hearing is scheduled for September 13, 2023.