Current Report Filing (8-k)
November 14 2022 - 5:30PM
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 9, 2022
EXELA TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware |
|
001-36788 |
|
47-1347291 |
(State or other jurisdiction of
incorporation or organization) |
|
(Commission File Number) |
|
(I.R.S. Employer
Identification Number) |
2701 E. Grauwyler Rd.
Irving, TX |
|
75061 |
(Address of principal executive offices) |
|
(Zip Code) |
Company’s telephone number, including area
code: (844) 935-2832
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
|
Trading Symbol |
|
Name of Each Exchange on
Which Registered |
Common Stock, par value $0.0001 per share |
|
XELA |
|
The Nasdaq Stock Market LLC |
6.00% Series B Cumulative Convertible Perpetual Preferred Stock, par value $0.0001 per share |
|
XELAP |
|
The Nasdaq Stock Market LLC |
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
¨ |
Emerging growth company |
¨ | If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Item 4.02. Non-Reliance on Previously Issued Financial Statements
or a Related Audit Report or Completed Interim Review.
Subsequent
to the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Original 10-K”),
Exela Technologies, Inc. (the “Company”) re-evaluated its application of ASC Subtopic 205-40, Presentation
of Financial Statements—Going Concern (“ASC 205-40”) as of March 16, 2022, the date of the Original 10-K.
Under ASC 205-40, the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability
to meet its obligations as they become due within one year after the date that the financial statements are issued. In re-performing this
evaluation as of the date of the Original 10-K, the Company determined the need to take into account the potential impact of certain true-up
guaranties that the Company had issued in connection with the Revolving Loan Exchange and Prepayment Agreement, dated March 7, 2022,
that had not previously been taken into account in its assessment. If the Company had taken the true-up guaranties into account in addition
to other existing factors, the Company may not have had sufficient liquidity under its financial model to fund payment of this true-up
obligation in addition to its other commitments for the twelve months following the date of the Original 10-K.
Based
on this evaluation, management has determined that if that contingent liability created by the true up guaranty were
to settle within one year from March 16, 2022, there was substantial doubt about the Company’s ability to continue as
a going concern for the twelve months following the date of the Original 10-K, which determination should have been disclosed in the Company’s
previously issued audited financial statements included in the Original 10-K (the “audited financial statements”).
As
a result of the foregoing, on November 9, 2022, the audit committee of the Company’s board of directors concluded, after discussion
with the Company’s management, that the audited financial statements included within the Original 10-K should be restated and should
no longer be relied upon. As such, the Company intends to restate the audited financial statements and related notes in Amendment No. 2
to the Original 10-K, to be filed with the SEC (the “Amendment”) to restate management’s conclusion that substantial
doubt exists and to include appropriate related disclosures and to reclassify certain long-term debt from noncurrent to current, as discussed
below (the “Restatement”).
The
Amendment includes reissued audit reports from KPMG LLP (“KPMG”), the Company’s independent registered public accounting
firm, due to the Restatement and other limited related changes to Part II, Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations, and Part II, Item 9A. Controls and Procedures. As result of issuance
of an amended audit report including a going concern explanatory paragraph, the Company determined that the amount owed under a credit
facility which is no longer existing as of the date of this report would become current, and accordingly restated it from noncurrent to
current classification in the restated balance sheet as of December 31, 2021. The above changes did not have an effect on retained
earnings, or other components of equity or net assets of the Company and result
from management’s conclusion that substantial doubt exists and the amended audit reports issued by KPMG to reflect such conclusion.
The Company has discussed
with KPMG the matters described herein.
The Amendment is being filed
concurrently with this report.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 14, 2022
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Exela Technologies, Inc. |
|
|
|
|
By: |
/s/ Shrikant Sortur |
|
Name: |
Shrikant Sortur |
|
Title: |
Chief Financial Officer |
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