Unique Fabricating further extends forbearance by two weeks

By William Gullotti

Buffalo, N.Y., Oct. 11 – Unique Fabricating NA, Inc. and Unique-Intasco Canada, Inc., units of parent Unique Fabricating, Inc., extended the forbearance agreement with the lenders on their 11th amended and restated credit agreement to Nov. 7 from Oct. 24, according to an 8-K filing with the Securities and Exchange Commission.

The amended agreement, signed Oct. 4, updated the minimum liquidity covenant to $500,000, updated the minimum sales covenant for the two month period ending Sept. 30 to $2.7 million and amended the weekly cash disbursement covenant.

The amendments also permit the company to raise up to $4 million of debt financing. Said debt financing was placed by Taglich Brothers, Inc. in two parts, $3 million on Oct. 4 and $1 million on Oct. 7. The $4 million of pay-in-kind notes have a 12% interest rate.

Investors in the notes also will receive warrants for up to an aggregate of 120,000 shares at an exercise price of $0.52 per share. Investors will receive warrants to purchase an additional 280,000 shares of common stock if the notes are not repaid within 12 months. Interest on the notes through the end of 2022 will be convertible at the holders’ option into common stock at a price equal to the warrant exercise price. The notes are secured by and will be paid from the expected receipt of the company’s employee retention credits (ERC) and any proceeds from the sale of a non-operational financial asset.

Proceeds of the aforementioned financing have been used to reduce the outstanding principal amount of the company’s bank term loans by $1,978,125, of which $1,228,125 was treated as a prepayment of the company’s Dec. 31, 2022 term loan principal payment, and to reduce the outstanding borrowings on the revolver by $2,021,875, which remains available to be reborrowed.

Citizens Bank, NA is administrative agent for the lenders.

The Auburn Hills, Mich., company makes foam, rubber and plastic components.

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