Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Centurion Commitment Letter
On November 23, 2021, Assure Holdings Corp. (the “Company”) entered into an amending agreement (the “Amending Agreement”) to its commitment letter dated March 8, 2021 (the “Commitment Letter”), with Centurion Financial Trust, an investment trust managed by Centurion Asset Management Inc. (“Centurion”) in respect of the Company’s previously disclosed $11,000,000 credit facility (the “Credit Facility”) with Centurion comprised on a $9,000,000 senior term loan (the “Senior Term Loan”), funded in two tranches of $6,000,000 and $3,000,000, and a $2,000,000 revolving loan (the “Revolving Loan”). The first tranche of the Senior Term Loan and the Revolving Loan were previously funded in June 2021. The Credit Facility, including the Commitment Letter and the related Debenture dated June 9, 2021, Guarantee dated June 9, 2021, Security Agreement dated June 9, 2021 and Contract Assignment dated June 9, 2021, were previously described in the Company’s Current Report on Form 8-K as filed with the Commission on June 16, 2021.
The Amending Agreement amended the terms of the second tranche of the Senior Term Loan. Previously, the Commitment Letter had provided that the Company could only access the second tranche of the Senior Term Loan solely for funding certain acquisition transactions. As amended, the Company may now access the second tranche of the Senior Term Loan of up to $3,000,000 for growth initiatives and general working capital purposes. Further, the Amending Agreement clarified the Company’s reporting requirements in relation to the “Borrowing Base” which had previously been left undefined. Under the Amending Agreement, the Company will (i) continue to provide Centurion monthly financial reporting of its detailed aging account receivable balances along with supporting details, (ii) update the monthly reporting information to include any and all new subsidiaries that are to be formed for the Company’s business to ensure the reports capture all invoicing, billings and collections for the consolidated business for purposes of determining the “Borrowing Base”, and (iii) the “Borrowing Base” covenant, which was previously undefined, is defined as combined advances under the Credit Facility (both tranches combined, “Combined Advances”) are not to exceed the Borrowing Base, which is defined as 75% of accounts receivable under 240 day less priority payables. A monthly Borrowing Base covenant calculation is to be provided to Centurion within 25 days of month end. If for any reason whatsoever, the aggregate outstanding principal amount of Combined Advances shall, at any time, exceed the Borrowing Base (any such amount of the excess at any time, an "Excess Amount"), then promptly on demand from Centurion, the Company shall repay in an amount equal to or greater than the Excess Amount so as to reduce the Excess Amount at the time of repayment to zero.
The Amending Agreement also provides for certain conditions precedent, including completion of a concurrent $4,000,000 equity raise, which the Company completed on November 15, 2021 and delivery of additional documentation as requested by Centurion. The Amending Agreement contains several conditions subsequent including delivery of (i) an updated financial model, (ii) an updated accounts receivable as of November 16, 2021, (iii) an updated organizational chart, (iv) confirmation of additional security registrations and (v) such additional information as Centurion may request in its analysis of the above items.
The Amending Agreement provides that each of the Debenture, Guarantee, Security Agreement and Contract Assignment are deemed to have been amended, effective the same date as the Amending Agreement, to the extent necessary to give effects to the amendments in the Amending Agreement, with formal amendments to occur with 90 days of the date of the Amending Agreement or such longer period as the parties may agree.
The above summary of the material terms of the Amending Agreement is qualified in its entirety by the Amending Agreement which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Management Private Placement
On November 27, 2021, Assure Holdings Corp. (the “Company”) entered into binding securities purchase agreements (the “Securities Purchase Agreement”) with certain of its officers, directors, employees and consultants (the “Investors”) pursuant to which the Company sold and issued to the Investors an aggregate of