Nogin : Bankruptcy - Form 8-K

Item 1.03 Bankruptcy or Receivership.

On December 5, 2023 (the "Petition Date"), Nogin, Inc. (the "Company") and certain of its subsidiaries (collectively with the Company, the "Debtors") filed voluntary petitions to commence proceedings under Chapter 11 (the "Chapter 11 Cases") of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Debtors will continue to operate their business and manage their properties as "debtors in possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. In order to ensure their ability to continue operating in the ordinary course of business and minimize the effect of bankruptcy on the Debtors' members, employees, vendors and other stakeholders, the Debtors filed with the Bankruptcy Court certain motions seeking a variety of customary "first day" relief, including a motion seeking authority to pay employee wages and benefits, to pay certain vendors and suppliers for goods and services provided both before and after the Petition Date, and to continue honoring insurance and tax obligations as they come due. In addition, the Debtors filed with the Bankruptcy Court motions seeking approval for the consensual use of cash collateral and entry into a postpetition financing facility and other customary operational and administrative relief. The Debtors expect that the Bankruptcy Court will approve the relief sought in these motions.

Additional information about the Chapter 11 Cases, including access to Bankruptcy Court documents, is available online at www.donlinrecano.com/nogin, a website administered by Donlin, Recano & Company, Inc., a third-party bankruptcy claims and noticing agent. The documents and other information on this website are not part of this Current Report and shall not be incorporated by reference herein.

The Company previously reported that it had entered into a promissory note (the "Bridge Note") with B. Riley Securities, Inc., in its capacity as the lender (the "Lender") on November 16, 2023 pursuant to which the Company borrowed $8,530,000. Borrowings thereunder must be paid on the earliest to occur of (i) June 30, 2025 and (ii) the date on which acceleration occurs thereunder as a result of certain events of default. Interest on the amounts borrowed accrues at 15% per annum and is payable quarterly.

As previously disclosed, the Company, the Lender, B. Riley Principal Investments, LLC, as plan sponsor (the "Plan Sponsor"), and holders of 90% of the Company's 7.00 % Convertible Senior Notes due 2026 (the "Convertible Notes" ) entered into a restructuring support agreement (the "Agreement").

The Agreement provides for the sale of the Debtors. In connection therewith it is contemplated that the Plan Sponsor would provide a debtor-in-possession loan, agented by its affiliate, BRF Finance Co., LLC, which, together with the loan described above, would be equitized into 100% ownership of the Debtors or be used to acquire substantially all of the Company's assets. The parties have agreed to support the proposed restructuring including debtor-in-possession financing. The contemplated restructuring would result in a payment of $15,500,000 to the Convertible Noteholders in satisfaction of their claims together with a priority claim on the proceeds of any litigation proceeds up to the amount of their secured claim.

Nothing in the Agreement requires any Debtor or the board of directors, board of managers, or similar governing body of any Debtor to take any action or to refrain from taking any action to the extent such fiduciary determines, after consulting with counsel, that taking or failing to take such action would be inconsistent with applicable Law or its fiduciary obligations under applicable law.

On December 8, 2023, the Company entered into a Senior Secured Super-Priority Debtor-in-Possession Loan and Security Agreement (the "DIP Facility") as a Debtor and Debtor-in-Possession with certain subsidiaries as guarantors and BRF Finance Co., LLC as the Administrative Agent. Under the DIP Facility the Debtors may borrow up to $24,700,000 in order to (a) repay and refinance the obligations and liabilities owing by the Company under the Bridge Note and the related instruments, documents and agreements, (b) pay certain fees and expenses owing to the lenders and the administrative agent, (c) fund an account for payment of fees owed to professionals in the Chapter 11 Cases in accordance with the initial budget, and (d) fund ongoing working capital requirements during the pendency of the Chapter 11 Cases in accordance with the approved budget.

The contemplated restructuring is unlikely to result in any distribution to holders of the Company's common stock in their capacity as such and the Company's common stock and as a result warrants are likely to become worthless.