CPI Card Group Enters New Agreement, Terminates Old One

TL;DR

CPI Card Group just signed a new deal and ditched an old one, creating new financial obligations.

AI Summary

On July 11, 2024, CPI Card Group Inc. entered into a material definitive agreement and simultaneously terminated a prior material definitive agreement. This action also created a direct financial obligation for the registrant. The specific details of these agreements and the resulting financial obligations were not disclosed in this filing.

Why It Matters

This filing indicates a significant change in CPI Card Group's contractual relationships, which could impact its financial obligations and operational strategies.

Risk Assessment

Risk Level: medium — The entry into a new material definitive agreement and termination of another, along with the creation of new financial obligations, suggests potential shifts in the company's financial health and strategic direction.

Key Players & Entities

• CPI Card Group Inc. (company) — Registrant
• July 11, 2024 (date) — Date of Report

FAQ

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value PMTS Nasdaq Global Market
• $285 million — sidiary, CPI CG Inc. (the "issuer"), of $285 million aggregate principal amount of 10.000% s
• $75.0 million — t provides for an ABL revolver of up to $75.0 million ("Revolver Commitment") consisting of r
• $10.0 million — rs of credit outstanding at any time of $10.0 million. The New Credit Agreement also includes
• $25.0 m — nt by an aggregate amount not to exceed $25.0 million, subject to certain conditions. T
• $7.5 million — eligible inventory and a further cap of $7.5 million for each of eligible work-in-process in
• $4 million — s of the Closing Date, the borrower had $4 million of outstanding borrowings under the New

Filing Documents

• pmts-20240711x8k.htm (8-K) — 63KB
• pmts-20240711xex4d1.htm (EX-4.1) — 1810KB
• pmts-20240711xex10d1.htm (EX-10.1) — 1596KB
• pmts-20240711xex10d2.htm (EX-10.2) — 319KB
• pmts-20240711xex99d1.htm (EX-99.1) — 9KB
• pmts-20240711xex10d1001.jpg (GRAPHIC) — 4KB
• pmts-20240711xex99d1001.jpg (GRAPHIC) — 8KB
• 0001558370-24-009766.txt ( ) — 4540KB
• pmts-20240711.xsd (EX-101.SCH) — 3KB
• pmts-20240711_lab.xml (EX-101.LAB) — 15KB
• pmts-20240711_pre.xml (EX-101.PRE) — 10KB
• pmts-20240711x8k_htm.xml (XML) — 5KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. 10.000% Senior Secured Notes due 2029 On July 11, 2024 (the "Closing Date"), CPI Card Group Inc. (the "Company") completed the previously announced private offering by its wholly-owned subsidiary, CPI CG Inc. (the "issuer"), of $285 million aggregate principal amount of 10.000% senior secured notes due 2029 (the "notes") and related guarantees at an issue price of 100%. The notes and related guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States to certain non-U.S. persons in compliance with Regulation S under the Securities Act. The issuance and sale of the notes and related guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and the notes and related guarantees may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws. Net proceeds from the offering, together with cash on hand, were used to redeem all of the issuer's outstanding 8.625% senior secured notes due 2026 (the "2026 notes") and to pay related fees, premiums and expenses. Indenture The terms of the notes and related guarantees are governed by an indenture, dated as of the Closing Date (the "Indenture"), among the issuer, the Company and certain of its current and future wholly-owned domestic subsidiaries (other than the issuer), as guarantors (collectively and together with the Company, the "guarantors"), and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the "trustee") and as notes collateral agent (in such capacity, the "notes collateral agent

02 Termination of a Material Definitive Agreement

Item 1.02 Termination of a Material Definitive Agreement. In connection with the issuance of notes and entry into the New ABL Credit Agreement on the Closing Date, the Company terminated its existing credit facility evidenced by the Credit Agreement, dated as of March 15, 2021 (the "Prior ABL Credit Agreement"), among the Company, the borrower, the lenders party thereto and Wells Fargo Bank, National Association as administrative agent and collateral agent, and other agreements and documents related to the Prior ABL Credit Agreement. Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

01 Other Events

Item 8.01 Other Events. On July 11, 2024, the Company issued a press release made pursuant to Rule 135c promulgated under the Securities Act, announcing the issuance of the notes and the entry into the ABL revolver. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 4.1 Indenture, dated as of July 11, 2024, by and among CPI CG Inc., as issuer, CPI Card Group Inc., as a guarantor, the subsidiary guarantors party thereto, and U.S. Bank Trust Company, National Association, as trustee and notes collateral agent. 4.2 Form of 10.000% Senior Secured Notes due 2029 (included as Exhibit A to the Indenture filed herewith as Exhibit 4.1). 10.1 Credit Agreement, dated as of July 11, 2024, among CPI Card Group Inc., CPI CG Inc., the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. 10.2 Guaranty and Security Agreement, dated as of July 11, 2024, among CPI Card Group Inc. and certain of its subsidiaries from time to time party thereto and JPMorgan Chase Bank, N.A., as collateral agent. 99.1 CPI Card Group Inc. press release dated July 11, 2024.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CPI Card Group Inc. By: /s/ Jessica Browne Jessica Browne Acting Chief Legal and Compliance Officer Date: July 11, 2024

View Full Filing

View this 8-K filing on SEC EDGAR