Item 1.01 Entry into a Material Definitive Agreement
On January 13, 2023, three operating subsidiaries of the Company, Damar Plastics
Manufacturing, Inc. ("Damar"), Mio-Guard LLC ("Mio-Guard"), and Simbex LLC
("Simbex") entered into a Loan and Security Agreement and related Schedule with
Pathward, National Association to increase the Company's aggregate credit line
availability by up to $5.5 million (the "Agreement"). The Agreement complements
an existing credit facility with Pathward through the Company's South Dakota
Partners subsidiary. The Agreement has a variable interest rate of the greater
of 6% or 0.75% in excess of the rate shown in the Wall Street Journal as the
prime rate, is payable on demand and is secured by all of the assets of Simbex,
Mio-Guard and Damar (the "Borrowers"). In connection with execution of the
Agreement, the Company and several of its intermediate holding company
subsidiaries entered into a Guaranty of the obligations of the Borrowers (the
"Guaranty").
The foregoing description of the Agreement and Guaranty does not purport to be
complete, is solely intended as a summary of the material terms of the Agreement
and Guaranty and qualified in its entirety by reference to the full text of the
Agreement, Schedule and Guaranty, which are attached hereto as Exhibits 1.1 and
1.2 to this Current Report on Form 8-K and incorporated herein by reference
(collectively, "Loan Documents").
The Loan Documents are being filed to provide investors with information
regarding its terms. It is not intended to provide any other factual information
about the parties to the Loan Documents and neither the copy of the Loan
Documents filed as an exhibit to this Current Report nor the description of the
Loan Documents above is intended to modify or supplement any factual disclosures
about the Company in its public reports filed with the SEC. In particular, the
representations, warranties, covenants and agreements contained in the Loan
Documents, which were made only for purposes of the Loan Documents and as of
specific dates, were solely for the benefit of the parties to the Loan
Documents, may be subject to limitations agreed upon by the parties and may be
subject to standards of materiality applicable to the contracting parties that
differ from those applicable to investors, security holders and reports and
documents filed with the SEC. Investors and security holders are not third-party
beneficiaries under the Loan Documents and should not rely on the
representations, warranties, covenants and agreements, or any descriptions
thereof, as characterizations of the actual state of facts or condition of any
party to the Loan Documents. In addition, the representations, warranties,
covenants and agreements and other terms of the Loan Documents may be subject to
subsequent waiver or modification.
The press release issued by the Company on January 17, 2023 described in Item
2.02 below and attached as Exhibit 99.1 to this Current Report on Form 8-K
includes a description of the Loan Documents.
Item 2.02. Results of Operations and Financial Condition.
On January 17, 2023, the Company issued a press release setting forth its
financial results for the quarter ended November 30, 2022. A copy of the press
release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
No.
1.1 Loan and Security Agreement, dated January 13, 2023, between Simbex,
Mio-Guard and Damar and Pathward, National Association
1.2 Guaranty, dated January 13, 2023, by the Company
99.1 Press Release of Salona Global Medical Device Corporation dated
January 17, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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* Certain schedules to this Exhibit have been omitted in accordance with Item
601(a)(5) of Regulation S-K. The Company agrees to furnish a supplemental copy
of any omitted schedule to the Securities and Exchange Commission upon request.
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