Company: TISI
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0000318833-25-000070
Chunk: 94

Company: TEAM INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 94
---
Table of Contents

additional 30,000 shares of Series B Preferred Stock and 581,304 additional warrants.  Each draw must be at least $5.0 million and is subject to satisfying certain conditions, including pro forma compliance with a First Lien Net Leverage Ratio (as defined in the First Lien Term Loan Credit Agreement (as defined below)) of 6.50 to 1.00. For each $5.0 million draw, the Company will issue 5,000 shares of Series B Preferred Stock and grant an additional 65,491 Tranche A and an additional 31,393 Tranche B warrants. For draws before December 10, 2025, the applicable Tranche A warrants will have an initial exercise price of $23.00 per share. For draws on or after December 10, 2025, the applicable Tranche A warrants will have an initial exercise price equal to the lesser of $30.00 or 110% of the 30-day volume weighted average price of the Company’s common stock, subject to adjustment. Any additional Tranche B warrants will have an initial exercise price of $50.00 per share, subject to adjustment. The Stellex Holder is not required to participate in more than one draw per calendar quarter. Pursuant to the Purchase Agreement, the proceeds from the Series B Delayed Draw may be used only for the following purposes: (i) to finance permitted acquisitions and certain growth initiatives (including the costs of expansion into new markets), (ii) to repay loans outstanding under the Company’s First Lien Term Loan Agreement (as defined herein), and (iii) for up to 20% of such net proceeds, to finance the Company’s transformation plan as mutually agreed between the Company and Stellex. Any undrawn amounts under this option are subject to a 1.0% annual commitment fee. The warrants issued in connection with these transactions are exercisable for 10 years and include customary anti-dilution and participation rights.Further details regarding the terms, accounting treatment, and features of the Series B Preferred Stock and warrants are provided in Note 12 - Shareholders’ Equity and Note 13 - Redeemable Preferred Stock.In connection with the Series B Transactions, the Company entered into amendments to its First Lien Term Loan Agreement, Second A&R Second Lien Term Loan Agreement, and 2022 ABL Credit Agreement. These amendments provided the Company with increased flexibility to complete the equity issuance and related transactions, including reductions to