Bankruptcy: 5E Advanced Materials, Inc.

Form Type: 8-K

Filing Date: 2025-01-14

Corporate Action: Bankruptcy

Type: New

Accession Number: 000095017025005373

Filing Summary: On January 14, 2025, 5E Advanced Materials, Inc. entered into a Restructuring Support Agreement with BEP Special Situations IV LLC, Meridian Investments Corporation, and Ascend Global Investment Fund SPC to undertake significant restructuring and recapitalization transactions regarding the company's capital structure. This includes issuing approximately 312.5 million shares of common stock and raising $5 million through a subscription agreement at a subscription price determined by market conditions. The company may pursue either an Out-of-Court Restructuring or, if conditions aren't met, an In-Court Restructuring under Chapter 11 of the Bankruptcy Code, which would lead to the extinguishment of existing equity interests. This restructuring is essential as the company received notice from Nasdaq regarding non-compliance with the stockholders’ equity rule, needing to show compliance by May 19, 2025. The company has also entered into Amendment No. 4 to a Note Purchase Agreement, issuing $5 million of new convertible notes, which may convert into around 17.1 million shares of common stock. There are risks and uncertainties regarding successful implementation and future operations, given the need for additional financing and compliance with listing rules.

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Form Type: DEFA14A

Filing Date: 2025-01-14

Corporate Action: Bankruptcy

Type: New

Accession Number: 000095017025005374

Filing Summary: On January 14, 2025, 5E Advanced Materials, Inc. entered into a Restructuring Support Agreement with BEP Special Situations IV LLC, Meridian Investments Corporation, and Ascend Global Investment Fund SPC concerning significant restructuring and recapitalization transactions related to the company's capital structure. The restructuring aims to address the company’s financial instability and includes provisions for both out-of-court and in-court restructuring processes. Under the out-of-court option, a recapitalization is planned which requires stockholder approval, involving the issuance of over 312 million shares of common stock to the investors, the sale of $5 million of equity, and warrants convertible into additional shares. If the out-of-court restructuring cannot be completed in a timely manner, the company will file for bankruptcy under Chapter 11, extinguishing existing equity interests and allocating 100% of new equity interests to Ascend and Bluescape. Additionally, the agreement includes $10 million in debtor-in-possession financing to support the company during the restructuring period. These measures are critical for the company to regain compliance with Nasdaq listing requirements and secure its financial future.

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