NAPERVILLE, ILLINOIS – Track Group, Inc. (OTCQB: TRCK) a global leader in offender tracking and monitoring services, today announced the successful completion of a transformational series of comprehensive recapitalization and refinancing transactions that materially strengthen its balance sheet, enhance financial flexibility, and right-size its capital structure to enable the company to grow shareholder value over the long-term.
Transaction(s) Highlights
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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%
- 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
- 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 accumen, we’ve strengthened our financial and strategic foundations and are well-positioned to grow shareholder value.”
