Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed, on May 8, 2022 (the "Petition Date"), Armstrong Flooring, Inc., a Delaware corporation (the "Company"), and certain of its wholly owned subsidiaries, AFI Licensing LLC, a Delaware limited liability company ("AFI Licensing" and, together with the Company, the "DIP Loan Parties"), Armstrong Flooring Latin America, Inc., a Delaware corporation, and Armstrong Flooring Canada Ltd., a British Columbia corporation (collectively with the Company, the "Debtors"), filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware (the "Court"). The chapter 11 cases are being administered under the caption In re Armstrong Flooring, Inc., et al. (Case No. 22-10426) (the "Chapter 11 Cases"). The Debtors continue to operate their businesses 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 orders of the Court.

On May 17, 2022, the DIP Loan Parties entered into a Senior Secured, Super-Priority Debtor-in-Possession Credit Agreement (the "DIP ABL Credit Agreement") with the lenders from time to time party thereto (collectively, the "ABL Lenders") and Bank of America, N.A., as administrative agent, collateral agent, swingline lender and L/C issuer (in such capacities, the "ABL DIP Agent"), whereby the ABL Lenders have provided a revolving loan facility (the "DIP ABL Facility") in an aggregate principal amount of up to $90,000,000. Availability under the DIP ABL Facility is limited by a borrowing base, is subject to a minimum availability covenant of $13,000,000, and is reduced by the amount of the outstanding revolving loan obligations under the Company's Credit Agreement, dated as of December 31, 2018 (as amended or otherwise modified prior to the Petition Date, the "Prepetition ABL Credit Agreement"). Paydowns of the DIP ABL Facility will be applied to reduce the obligations under the Prepetition ABL Credit Agreement, and the resulting availability will increase, on a dollar for dollar basis, availability under the DIP ABL Facility. Letters of credit issued and outstanding under the Prepetition ABL Credit Agreement were deemed to be issued and outstanding under the $20,000,000 sublimit for letters of credit under the DIP ABL Facility.

Concurrently with the entry into the DIP ABL Credit agreement, the DIP Loan Parties entered into a Senior Secured, Super-Priority Debtor-in-Possession Term Loan Agreement (the "DIP Term Loan Credit Agreement" and, together with the DIP ABL Credit Agreement, the "DIP Credit Agreements") by and among the DIP Loan Parties, the lenders from time to time party thereto (the "Term Loan Lenders"), and Pathlight Capital LP, as administrative agent and collateral agent (in such capacities, the "Term Loan DIP Agent"), whereby the Term Loan Lenders provided the DIP Loan Parties a delayed draw term loan facility (the "DIP Term Loan Facility" and, together with the DIP ABL Facility, the "DIP Facilities") in an aggregate principal amount of $37,333,333. The DIP Term Loan Facility consists of $12,000,000 in new money loans, a $24,000,000 roll-up of term loans outstanding under that certain Term Loan Agreement, dated as of June 23, 2020 (as amended prior to the Petition Date, the "Prepetition Term Loan Credit Agreement"), and original issue discount of $1,333,333, which was added to the outstanding principal of the DIP Term Loan Facility on the effective date of the DIP Term Loan Credit Agreement.



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The obligations of the DIP Loan Parties under the DIP Credit Agreements are secured by a super-priority security interest in substantially all of the assets of the DIP Loan Parties pursuant to the DIP Credit Agreements and the interim order of the Court approving or authorizing the Company's entry into and performance under the DIP Credit Agreements (the "DIP Order"), subject to certain exceptions and having the priorities set forth in the DIP Order. The obligations of the Debtors under the DIP Credit Agreements have priority over all other allowed Chapter 11 or Chapter 7 administrative expenses under the Bankruptcy Code, subject to a carveout as specified in the DIP Order for certain fees, including statutory fees and professional fees, as specified in the DIP Order.

The proceeds of the DIP Facilities will be used by the DIP Loan Parties, as permitted by the DIP Order and the DIP Credit Agreements, for working capital and general corporate purposes, the payment of fees and expenses in connection with the transactions related thereto, the pursuit of sale transactions, and . . .

Item 2.03 Creation of a Direct Financial Obligation or Obligation under an

Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Form 8-K regarding the DIP Credit Agreements is incorporated herein by reference.



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Item 2.05 Costs Associated with Exit or Disposal Activities.

On May 20, 2022, the Company issued conditional notices (each, a "WARN Notice") under the Worker Adjustment and Retraining Notification Act ("WARN") to all of its applicable North American employees in regards to total plant closures and layoffs that may occur if the Company is unable to timely secure a sale that addresses the Company's debt and allows the Company to continue to operate as a going concern.

Each WARN Notice provides that there may be total and permanent closures of all Company facilities commencing June 17, 2022, with employment terminations occurring June 17, 2022 or within 14 days thereafter, unless the Company is able to avoid closures through a sale.

At this time, the Company is unable to make a good faith determination of an estimate or range of estimates required by paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K with respect to potential workforce reduction actions. The Company will file an amendment to this Current Report on Form 8-K within four business days after it makes a determination of such estimate or range of estimates.



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Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or

Standard; Transfer of Listing.

As previously disclosed, on May 9, 2022, the Company received a notice from the New York Stock Exchange (the "NYSE") stating that NYSE Regulation has determined to commence proceedings to delist the Company's common stock, par value $0.0001 (the "Common Stock"), from the NYSE as result of the Chapter 11 Cases.

On May 18, 2022, the Company received an additional notice from the NYSE that the Company was no longer in compliance with the continued listing standard pursuant to NYSE Listed Company Manual Section 802.01E due to the Company's failure to timely file a Form 10-Q for the quarter ended March 31, 2022.

The Company does not intend to appeal the NYSE's determination to delist the Company's Common Stock, and therefore, it is expected that the Common Stock will be delisted. This determination does not affect the Company's operations or business.



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Item 8.01 Other Information.

On May 17, 2022, the Company issued a press release announcing the entry into the DIP Credit Agreements and the Bankruptcy Court's entry of the DIP Order, as well certain other matters described therein. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.



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Cautionary Information Regarding Trading in the Company's Securities.

The Company continues to face certain risks and uncertainties that have been affecting its business and operations, and these risks and uncertainties could impact the outcome of the Chapter 11 Cases. Holders of the Company's equity securities will likely be entitled to little or no recovery on their investment following the Chapter 11 Cases, and recoveries to other stakeholders cannot be determined at this time. The Company cautions that trading in the Company's securities given the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company's securities may bear little or no relationship to the actual value realized, if any, by holders of the Company's securities in the Chapter 11 Cases. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.



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Item 9.01 Financial Statements and Exhibits




(d) Exhibits

Exhibit
  No.                                    Description

10.1          Senior Secured, Super-Priority Debtor-in-Possession Credit
            Agreement, by and among the Company, as borrower, AFI Licensing LLC,
            as guarantor, the lenders party thereto, and Bank of America, N.A. as
            administrative agent, collateral agent, swingline lender and L/C
            issuer

10.2          Senior Secured, Super-Priority Debtor-in-Possession Term Loan
            Agreement, by and among the Company, as borrower, AFI Licensing LLC,
            as guarantor, the lenders party thereto, and Pathlight Capital LP, as
            administrative agent and collateral agent

99.1          Press Release, dated May 17, 2022

104         Cover Page Interactive Data File (formatted as inline XBRL)



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