The US Bankruptcy Court gave an order to Timber Pharmaceuticals, Inc. to obtain DIP financing on an interim basis on November 22, 2023. As per the order, the debtor has been authorized to obtain term loan credit facility in the amount of $13.90 million from LEO US Holding, Inc. The DIP loan would either carry an interest rate of 12% p.a., along with an additional 2% p.a. interest in the event of default. As per the terms of the DIP agreement, the loan carries a upfront fee of 2% p.a. The DIP facility would mature either on 3 months from date of the first loan under this agreement, the acquisition closing, the first business day following the consummation of an alternative transaction previously approved by an order of the bankruptcy court, the effective date as of which a Competing Transaction is consummated under the Stalking Horse APA, the earlier of the effective date or the substantial consummation, of a Plan of Reorganization that has been confirmed by an order of the Bankruptcy Court, such earlier date on which all Loans and other Obligations for the payment of money shall become due and payable in accordance with the terms of this Agreement and the other Loan Documents, including Section 7 of the DIP Credit Agreement, 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 shall be scheduled for December 15, 2023.