Transaction(s) Highlights
Net Debt* Reduced by ~$27 million (~63% decrease) through materially discounted debt settlement (~50%), reducing Net Leverage* From 7.2 to 2.6, financed through:
New Credit Facility: 5-year $21 million term loan, funded at close, and availability under a $1 million interest line and $2 million ABL revolver
Interest Rate: 13.5% fixed (11% cash, 2.5% PIK)
Mandatory Amortization: Years 1 & 2 = 0%, Thereafter = 5%
PIPE: ~$10.3 million raised at $0.35 per share, (29,471,429 shares)
Participants: TRCK Management 1.5%, Carlson Ridge Capital, LLC ("CRC") 49.25%, JCP Investment Management, LLC ("JCP") 49.25%
Debt Maturity Extended To 5-Years
Annual Cash Interest Savings of ~$200,000 anticipated over the next 12-months
Board, Management, Creditor, & Shareholder Alignment with the new Board representing ~75% of go-forward ownership, management participation in the PIPE, and creditor alignment through 2.5% equity warrant coverage
*Net Debt = (Long-Term Debt + Accrued Unpaid Interest, Cash & Equivalents); Net Leverage = (Net Debt divided by TTM Adjusted EBITDA)
The transactions were supported by the Company's new lender, Chatham Capital, CRC, JCP, and ADS Securities LLC, a subsidiary of Abu Dhabi Developmental Holding Company PJSC.
Derek Cassell, Chief Executive Officer, said: "These transactions represent a significant milestone for us. By materially reducing leverage, extending maturities, and bringing in aligned, long-term partners with proven financial and industry-specific acumen, we've strengthened our financial and strategic foundations and are well-positioned to grow shareholder value."
Leadership and Governance Updates
In connection with the Transactions, the Board has been reconstituted with new directors with deep collective experience in community corrections, capital markets, M&A, capital allocation, and corporate governance. The Company has appointed Denver Smith, CFA, as Chairman of the Board. Additional board members include Kyle Kidd, CPA, Matthew Powalski, CPA, Jacob Saour, John "Rocky" Sullivan, and Derek Cassell, current CEO. Legacy directors have stepped down as part of the transition. Current management will continue to lead day-to-day operations and execute on the Company's strategic plan.
Denver Smith, Chairman of the Board, said: "I'm grateful to all parties involved for their collaboration and commitment in completing this comprehensive recapitalization. The prior capital structure, inherited by current management, was not sustainable. This is ...
