Unique Fabricating, Inc. (Form: 8-K, Received: 05/26/2023 15:10:14)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 22, 2023

UNIQUE FABRICATING, INC.

(Exact name of registrant as specified in its Charter)


Delaware	001-37480	46-1846791
(State or other jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)


800 Standard Parkway
Auburn Hills,	Michigan	48326
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (248) 853-2333

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $.001 per share	UFAB	NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging growth company o

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. o

Item 1.01. Entry Into a Material Definitive Agreement.

Accommodation Agreement

On May 22, 2023, Unique Fabricating, Inc. and its subsidiaries (the “Supplier” or the “Company”) entered into an Accommodation Agreement with General Motors LLC, FCA US LLC, FCA Mexica, S.A. de CV and FCA Canada Inc. and Yanfeng Automotive Interior Systems Co., three of its principal customers (the “Customers”) and Citizens Bank, National Association, in its capacity as the Agent for the financial institutions (the “Lenders” and together with the Agent, (the “Lending Group”)) party to the Amended and Restated Credit Agreement dated November 18, 2018, as amended, including by the Forbearance Agreement described herein (the “Credit Agreement”). Pursuant to and subject to the terms of the Accommodation Agreement, the Customers agreed to provide certain financial and other accommodations to the Supplier and the Lending Group to support on-going operations of and a sale or restructuring process by Supplier.

The Accommodation Agreement will continue until the date that is the earliest of certain events including: (a) the closing of a sale of the Company to a qualified buyer, but only with respect to the Supplier location(s) that are covered by any such transaction; (b) solely as to a Customer exercising its right to terminate the term of the agreement due to the occurrence of an event of default; or (c) October 31, 2023.

The Accommodation Agreement provides for specified price increases to be paid by Customers during the term or other funding to be provided by Customers to the Company through the purchase by Customers of a junior tranche of debt to be established under the Credit Agreement of up to $15 million in the aggregate. Customers also agreed not to exercise certain rights of set off, recoupment, deduction or defense and not to resource production of component parts to other suppliers during the term. The agreement further requires that, within five business days of its execution, Supplier obtain commitments (i) from its seven largest customers (other than Customers) to provide to Supplier economic benefits equal to or greater to those arising under the Accommodation Agreement and (ii) from the remainder of Supplier’s customers to provide Supplier with economic benefits to support its business during the term of the Accommodation Agreement.

The Accommodation Agreement requires Supplier to conduct its operations and business in accordance with an agreed upon budget. The agreement also requires that Supplier commence a process for the sale of its business to a qualified buyer, in accordance with fixed milestones which contemplates completion of the sale process by no later than October 31, 2023. The agreement also requires that the Supplier deliver to each Customer and Agent a restructuring plan within 30 days, appoint a chief restructuring consultant and engage an investment banker.

The Accommodation Agreement contains further provisions to the benefit of the Customers in the event the agreement terminates without a sale or restructuring.

This summary of the Accommodation Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Accommodation Agreement to be filed by amendment as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Forbearance Agreement

On May 22, 2023, Unique Fabricating NA, Inc. and Unique-Intasco Canada, Inc. and their parent, Unique Fabricating, Inc. (the “Company”) and their subsidiaries entered into a Forbearance Agreement with respect to the Credit Agreement. The Company has defaulted under the terms and conditions of the Credit Agreement (1) by not paying the outstanding amount of the Loans on the Repayment Date, February 17, 2023, (2) by not paying the quarterly payment due on March 31, 2023, (3) by not timely providing financial statements in violation of the Credit Agreement and (4) by providing inaccurate financial statements for November 2022 (the “Third Specified Events of Default”).

The Lending Group agreed to forbear from exercising their rights to collect payment of the indebtedness until October 31, 2023, subject to earlier termination in certain events or the termination of the Accommodation Agreement, as described above. The Forbearance Agreement is conditioned on, among other things, the Customers entering into the Accommodation Agreement and payment to the Lenders by the Company of the principal reduction payment that was due March 31, 2023 in the amount of $1,228,125, interest that has been invoiced and is overdue, and attorney and advisor fees of the Lenders, all of which have been paid. The Forbearance Agreement creates a Junior Tranche of the revolving line of credit under the Credit Agreement in the amount of up to $15,010,000 to be funded by the sale of junior participation interests in the revolving line of credit to certain customers that are parties to the Accommodation Agreement.

The Forbearance Agreement provides that during the Forbearance Period, the Agent and Lenders will accept fifty percent of the quarterly amortizing loan payments due on June 30, 2023 and September 30, 2023, to be paid in monthly installments. The balance of the payments are deferred until the earlier of a Forbearance Termination Event, as defined, the Maturity Date or repayment of the loans. The agreement also increases the advance rates for Accounts Receivable, Eligible Inventory (raw materials) and Eligible Inventory (finished Goods).

The agreement requires that the Company engage a Chief Restructuring Consultant and appoint an Investment Banker. The Company is required to commence a going concern assets sale in one or more transactions to qualified buyers, as defined, in accordance with a specified schedule with the closing to occur no later than October 31, 2023.

This summary of the Forbearance Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Forbearance Agreement to be filed by amendment as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.

Item 9.01. Exhibits.

(d) Exhibits. The following exhibits are filed herewith:

EXHIBIT INDEX


Exhibit No.						Description

10.1(1)						Accommodation Agreement, dated May 22, 2023, among General Motors LLC, for itself and on behalf of its subsidiaries and affiliates, FCA US LLC, on behalf of itself and the final vehicle assembly entities FCA Mexico, S.A. de CV and FCA Canada Inc.; Yanfeng Automotive Interior Systems Co., for itself and on behalf of its subsidiaries and affiliates, Unique Fabricating, Inc., a Delaware corporation, Unique-Intasco Canada, Inc. a British Columbia corporation, Unique Fabricating NA, Inc., a Delaware corporation, Unique-Chardan, Inc., a Delaware corporation, Unique Molded Foam Technologies, Inc., a Delaware corporation, Unique Prescotech, Inc., a Delaware corporation, Unique Fabricating Realty, LLC, a Michigan limited liability company, Unique Fabricating South, Inc., a Michigan corporation, and Unique Fabricating de Mexico, S.A. de C.V., corporation with variable capital, duly incorporated pursuant to the laws of Mexico, and Citizens Bank, National Association, a national banking association, in its capacity as agent, for itself and the other financial institutions party to the Loan Documents (as defined) from time to time as lenders.
10.2(1)						Forbearance Agreement, dated May 22, 2023, by and between Unique Fabricating NA, Inc., a Delaware corporation, and Unique-Intasco Canada, Inc., a corporation organized under the laws of the province of British Columbia, the Borrowers, Unique Fabricating, Inc., a Delaware corporation, Unique-Chardan, Inc., a Delaware corporation, Unique Molded Foam Technologies, Inc., a Delaware corporation, Unique Prescotech, Inc., a Delaware corporation, Unique Fabricating Realty, LLC, a Michigan limited liability company, Unique Fabricating South, Inc., a Michigan corporation and Unique-Intasco USA, Inc., a Michigan corporation, each a Guarantor and collectively, the Guaranators, the financial institutions signatory thereto (individually a “Lender,” and collectively the “Lenders”), Citizens Bank, National Association, a national banking association, as Agent for the Lenders (in such capacity, the Agent).
99.1						Unique Fabricating, Inc. press release dated May 23, 2023
104						Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded with the Inline XBRL document).

__________________________

(1) To be filed by amendment.

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.


	UNIQUE FABRICATING, INC.
Date: May 26, 2023	By:	/s/ Brian P. Loftus
		Brian P. Loftus
		Chief Financial Officer

Investor Inquiries:

Rob Fink, FNK IR

+1(646) 809-0408

rob@fnkir.com

Unique Fabricating, Inc. Announces Accommodation Agreement and New Forbearance Agreement to Support Restructuring or Sale

Auburn Hills, MI – May 23, 2023 — Unique Fabricating, Inc. (NYSE American: UFAB), reported that it has entered into an Accommodation Agreement with three of its principal customers (“Customers’) and its lenders (“Lending Group”), and a Forbearance Agreement with the Lending Group. The Customers agreed to provide certain financial and other accommodations to Unique Fabricating and the Lending Group to support on-going operations and a sale or restructuring process by the Company. The Accommodation Agreement will continue through October 31, 2023 unless before that date, among other things, the Company is sold to a qualified buyer, or the Term ends due to the occurrence of an event of default.

The Accommodation Agreement requires that Unique Fabricating immediately commence a process for the sale of its business to a qualified buyer, in accordance with fixed milestones, which contemplates completion of the sale process by no later than October 31, 2023. The agreement also requires that Unique Fabricating deliver to each Customer and Agent for the Lending Group a restructuring plan within 30 days, appoint a chief restructuring consultant and engage an investment banker.

The Accommodation Agreement provides during its term for specified price increases to be paid by Customers or, alternatively, funding by Customers through the purchase of a junior tranche of debt to be established under the Company’s existing Credit Agreement of up to $15 million in the aggregate. Customers also agreed to limit the exercising of certain rights of set off, recoupment, deduction or defense and not to resource production of component parts to other suppliers during the term. The agreement further requires that, within five business days of its execution, Unique Fabricating will obtain commitments from its seven largest customers not initially participating in the Accommodation Agreement to agree to economic benefits equal to or greater to those arising under the Accommodation Agreement, as well as agreements from the remainder of Unique Fabricating’s customers to provide economic benefits to support its business during the term.

In addition, Unique Fabricating NA, Inc. and Unique-Intasco Canada, Inc. and their parent, Unique Fabricating, Inc. (the “Company”) and their subsidiaries entered into a Forbearance Agreement with respect to the Credit Agreement, as amended, among the Company, certain of its subsidiaries, with the Lending Group. The Lending Group agreed to forbear from exercising its rights to collect payment of the indebtedness until October 31, 2023, subject to earlier termination in certain events including the termination of the Accommodation Agreement. The Forbearance Agreement is conditioned on, among other things, the Customers entering into the Accommodation Agreement and payment to the Lenders by the Company of the principal reduction payment that was due March 31,2023 to the Lending Group in the amount of $1,228,125, interest that is overdue, and attorney and advisor fees of the Lending Group. The Forbearance Agreement provides that during the Forbearance Period, the Agent and Lenders will accept fifty percent of the quarterly amortizing loan payments due on June 30, 2023 and September 30, 2023, to be paid in monthly installments. The balance of the quarterly payments are deferred until the earlier of a Forbearance Termination Event, the maturity date of the loans or repayment of the loans.

About Unique Fabricating, Inc.

Unique Fabricating, Inc. (NYSE American: UFAB) engineers and manufactures components for customers in the transportation, appliance, medical, and consumer markets. The Company’s solutions are comprised of multi-material foam, rubber, and plastic components and utilized in noise, vibration and harshness (“NVH”) management, acoustical management, water and air sealing, decorative and other functional applications. Unique leverages proprietary manufacturing processes, including die cutting, thermoforming, compression molding, fusion

molding, and reaction injection molding to manufacture a wide range of products including air management products, heating ventilating and air conditioning (“HVAC”), seals, engine covers, fender stuffers, air ducts, acoustical insulation, door water shields, gas tank pads, light gaskets, topper pads, mirror gaskets, glove box liners, personal protection equipment, and packaging. The Company is headquartered in Auburn Hills, Michigan. For more information, visit http://www.uniquefab.com.

Safe Harbor Statement

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause the Company's or the Company's industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by this press release. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “outlook,” and similar expressions are used to identify these forward-looking statements. Such forward-looking statements include statements regarding, among other things, our expectations about net sales, and adjusted diluted earnings per share. All such forward-looking statements are based on management’s present expectations and are subject to certain factors, risks and uncertainties that may cause actual results, outcome of events, timing and performance to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission and in particular the Section entitled “Risk Factors”, as well as any updates to those risk factors included from time to time in our periodic and current reports filed with the Securities and Exchange Commission. All statements contained in this press release are made as of the date of this press release, and Unique Fabricating does not intend to update this information, unless required by law. Reference to the Company’s website above does not constitute incorporation of any of the information thereon into this press release.