Item 1.03 Bankruptcy or Receivership.
On November 7, 2022, Fast Radius, Inc., a Delaware corporation ("Fast Radius" or
the "Company"), together with its wholly-owned subsidiaries (the "Debtors"),
filed voluntary petitions (collectively, the "Bankruptcy Petitions") for
bankruptcy protection under Chapter 11 of Title 11 of the United States
Bankruptcy Code. The filing was made in the United States Bankruptcy Court for
the District of Delaware (the "Court"). Joint administration has been sought
under the caption In re Fast Radius, Inc., et al., Case No. 22-11051.
The Debtors will continue their operations in the ordinary course of business as
debtors-in-possession and pursue a structured sale of their assets pursuant to a
competitive bidding and auction process. The Debtors have filed a variety of
"first day" motions seeking approval from the Court for various forms of
customary relief. including authority to: (a) continue using their existing cash
management system, (b) pay prepetition wages, compensation and employee
benefits, (c) use cash collateral, (d) maintain existing insurance policies and
pay related obligations, (e) pay certain prepetition taxes, (f) provide adequate
assurance of payment to their utility providers, and (g) pay prepetition claims
of certain critical vendors.
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Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The filing of the Bankruptcy Petitions constitutes an event of default that
accelerated the obligations of the Company and certain of its subsidiaries under
each of that certain (i) Loan and Security Agreement, dated as of December 29,
2020 (as amended or otherwise modified prior to the date hereof, the "SVB Credit
Agreement"), by and between Fast Radius Operations, Inc., a Delaware corporation
and wholly-owned subsidiary of the Company ("Fast Radius Operations"), and
Silicon Valley Bank and (ii) Loan and Security Agreement, dated as of September
10, 2021 (as amended or otherwise modified prior to the date hereof, the "SVB
Capital Credit Agreement" and, together with the SVB Credit Agreement, the
"Credit Agreements"), by and between Fast Radius Operations and SVB Innovation
Credit Fund VIII, L.P.
The Credit Agreements provide that as a result of the filing of the Bankruptcy
Petitions, the principal, accrued interest due thereunder and all other fees and
expenses required to be paid pursuant to the terms thereof shall be immediately
due and payable. Any efforts to enforce such payment obligations under the
Credit Agreements are automatically stayed as a result of the filing of the
Bankruptcy Petitions, and the creditors' rights of enforcement in respect of the
Credit Agreements are subject to the applicable provisions of the Bankruptcy
Code.
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Item 2.05 Costs Associated with Exit or Disposal Activities.
On November 3, 2022, the Company's board of directors (the "Board") approved a
reduction in force of approximately 20% of the Company's workforce in order to
reduce the Company's operating expenses. The reduction in force is part of the
Company's restructuring efforts. The Company expects the reduction in force to
be substantially complete in November 2022. In connection with the reduction in
force, the Company incurred approximately $200,000 in expenses, substantially
all of which are related to employee severance and other termination benefits.
The Company expects to recognize substantially all of these charges in the third
quarter of 2022.
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As part of a retention program approved by the Board, on November 4, 2022, the
Company entered into a Retention Agreement (collectively, the "Retention
Agreements") with each of Lou Rassey, the Company's Chief Executive Officer, Pat
McCusker, the Company's President and Interim Chief Financial Officer, and John
Nanry, the Company's Chief Operating Officer.
The Retention Agreements provide for a lump sum cash payment on November 7, 2022
equal to approximately four weeks' salary or $41,667, $31,250, and $29,167, less
applicable tax withholdings and deductions, to Messrs. Rassey, McCusker and
Nanry, respectively (each, a "Retention Payment"), provided that, each officer
must remain continuously employed with the Company through the earlier of (A)
February 1, 2023, (B) the earlier of (i) ninety days following the consummation
of a sale of all or substantially all of the Company's equity or assets and (ii)
March 14, 2023, or (C) the date on which the officer ceases to be employed by
the Company due to a Qualifying Termination (as defined below). If an officer's
employment terminates for any reason other than a Qualifying Termination, the
officer will not earn any portion of the Retention Payment and must repay the
entire amount of the Retention Payment (net of tax withholdings) to the Company
no later than thirty days following the date on which such officer's employment
is terminated. A "Qualifying Termination" for purposes of the Retention
Agreements means a termination of the officer's employment with the Company that
results from (x) a termination initiated by the Company without cause, (y) the
officer's resignation for good reason, or (z) the officer's death or disability.
The foregoing description of the Retention Agreements does not purport to be
complete and is qualified in its entirety by the terms and conditions of the
Retention Agreements, a form of which is filed as Exhibit 10.1 hereto and
incorporated by reference herein.
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Item 7.01 Bankruptcy or Receivership.
On November 8, 2022, the Company issued a press release announcing the filing of
the Bankruptcy Petitions. A copy of the press release is furnished as Exhibit
99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 7.01 and in Exhibit 99.1 attached hereto shall not
be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or otherwise subject to liabilities under
that section, and shall not be deemed to be incorporated by reference into the
filings of the Company under the Securities Act of 1933, as amended, or the
Exchange Act, regardless of any general incorporation language in such filings.
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Item 8.01 Other Events.
Cautionary Statements Regarding Trading in Fast Radius' Securities
Fast Radius anticipates that its common stock and warrants will be delisted from
the Nasdaq Stock Exchange and will be eligible to be quoted on either the OTC
Bulletin Board or Pink Sheets. No assurance, however, can be made that trading
in the Com Fast Radius' common stock and warrants on the OTC Bulletin Board or
"Pink Sheets" will commence or be maintained. Fast Radius' securityholders are
cautioned that trading in Fast Radius' securities during the pendency of the
Chapter 11 case will be highly speculative and will pose substantial risks.
Trading prices for Fast Radius' securities may bear little or no relationship to
the actual recovery, if any, by holders thereof in Fast Radius' Chapter 11 case.
Assuming Fast Radius is able to successfully complete the auction process, Fast
Radius anticipates that it will deregister its common stock and warrants under
the Exchange Act. Accordingly, Fast Radius urges extreme caution with respect to
existing and future investments in its securities.
Cautionary Note Regarding Forward-Looking Statements
This current report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws. These forward-looking
statements generally are identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future," "scales,"
"representative of," "valuation," "opportunity," "plan," "may," "should,"
"will," "would," "will be," "will continue," "will likely result," and similar
expressions. Forward-looking statements are predictions, projections and other
statements about future events that are based on current expectations and
assumptions and, as a result, are subject to risks and uncertainties. Many
factors could cause actual future events to differ materially from the
forward-looking statements in this current report on Form 8-K, including but not
limited to: (i) the Company's ability to obtain timely approval of the
Bankruptcy Court with respect to motions filed in the Chapter 11 proceedings;
(ii) objections to the pleadings filed that could protract the Chapter 11
proceedings; (iii) the Bankruptcy Court's rulings in the Chapter 11 proceedings,
including the outcome of the Chapter 11 proceedings generally; (iv) the
Company's ability to obtain a timely sale of all of its assets or approval of a
plan of reorganization; (v) the length of time that the Company will operate
under Chapter 11 protection and the continued availability of operating capital
during the pendency of the Chapter 11 proceedings; (vi) the Company's ability to
continue to operate its business during the pendency of the Chapter 11
proceedings; (vii) employee attrition and the Company's ability to retain senior
management and other key personnel due to the distractions and uncertainties;
(viii) the effectiveness of the overall restructuring activities pursuant to the
Chapter 11 proceedings and any additional strategies the Company may employ to
address its liquidity and capital resources; (ix) the actions and decisions of
creditors and other third parties that have an interest in the Chapter 11
proceedings; (x) increased legal and other professional costs necessary to
execute the Company's restructuring; (xi) the Company's ability to maintain
relationships with suppliers, customers, employees and other third parties and
regulatory authorities as a result of the Chapter 11 proceedings; (xii) the
trading price and volatility of the Company's common stock and warrants and the
effects of the expected delisting from The Nasdaq Stock Market; (xiii)
litigation and other risks inherent in a bankruptcy process; (xiv) the impact of
uncertainty regarding the Company's ability to continue as a going concern on
our liquidity and prospects; and (xv) risks related to our ability to secure
working capital. The foregoing list of factors is not exhaustive. Additionally,
the Chapter 11 proceedings may result in holders of the Company's securities
receiving no value for their interests. Because of such a possibility, the value
of these securities is highly speculative and may pose substantial risks.
Trading prices for the Company's securities may bear little or no relationship
to the actual recovery, if any, by holders thereof in the Chapter 11
proceedings. Accordingly, the Company urges extreme caution with respect to
existing and future investments in its securities. You should carefully consider
the foregoing factors and the other risks and uncertainties more fully described
in Fast Radius' filings with the Securities and Exchange Commission, including
its Form 10-K for the year ended December 31, 2021 and Forms 10-Q for the
quarters ended March 31, 2022 and June 30, 2022 and other periodic reports.
These filings identify and address other important risks and uncertainties that
could cause actual events and results to differ materially from those contained
in the forward-looking statements. Forward-looking statements speak only as of
the date they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and Fast Radius assumes no obligation and does not
intend to update or revise these forward-looking statements, whether as a result
of new information, future events, or otherwise. Fast Radius does not give any
assurance that it will achieve its expectations.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
10.1 Form of Retention Agreement
99.1 Press Release, dated November 7, 2022
104 Cover Page Interactive Data File (formatted as Inline XBRL and
contained in Exhibit 101).
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