# EDGAR Filing Document

**Accession Number:** 0001620179
**File Stem:** 0001104659-23-038787
**Filing Date:** 2023-3
**Character Count:** 27297
**Document Hash:** b168243a2d44c3397e3512cd4b693bf0
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-23-038787.hdr.sgml**: 20230330

**ACCESSION NUMBER**: 0001104659-23-038787

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230329

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230330

**DATE AS OF CHANGE**: 20230330

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Exela Technologies, Inc.
- **CENTRAL INDEX KEY:** 0001620179
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-BUSINESS SERVICES, NEC [7389]
- **IRS NUMBER:** 471347291
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36788
- **FILM NUMBER:** 23777270

**BUSINESS ADDRESS:**
- **STREET 1:** 2701 EAST GRAUWYLER RD.
- **CITY:** IRVING
- **STATE:** TX
- **ZIP:** 75061
- **BUSINESS PHONE:** 844-935-2832

**MAIL ADDRESS:**
- **STREET 1:** 2701 EAST GRAUWYLER RD.
- **CITY:** IRVING
- **STATE:** TX
- **ZIP:** 75061

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Quinpario Acquisition Corp. 2
- **DATE OF NAME CHANGE:** 20140922

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **March 29, 2023**

**EXELA TECHNOLOGIES, INC.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-36788** | **47-1347291** |
| (State or other jurisdiction of<br> incorporation or organization) | (Commission File Number) | (I.R.S. Employer<br> Identification Number) |

---

---

| | |
|:---|:---|
| **2701 E. Grauwyler Rd.**<br> **Irving, TX** | **75061** |
| (Address of principal executive offices) | (Zip Code) |

---

Company's telephone number, including area code: **(844) 935-2832**

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol** | **Name of Each Exchange on Which Registered** |
| Common Stock, par value $0.0001 per share | XELA | The Nasdaq Stock Market LLC |
| 6.00% Series B Cumulative Convertible Perpetual Preferred Stock, par value $0.0001 per share | XELAP | The Nasdaq Stock Market LLC |

---

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

◻ Emerging growth company

◻ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

---

| | |
|:---|:---|
| **Item 8.01** | **Other Events** |

---

From time to time since January 23, 2023, Exela Technologies, Inc. (the "Company") has been engaged in discussions with certain beneficial holders, or investment advisors, sub-advisors or managers of funds or accounts that are beneficial holders, of 11.5% Secured Notes due 2026 (the "Notes") issued under the Indenture, dated as of December 9, 2021, among Exela Intermediate LLC ("Exela Intermediate"), as Issuer, Exela Finance, Inc. as Co-Issuer, and US Bank Trust Company National Association, as Trustee (as amended, supplemented or otherwise modified from time to time, the "Indenture") with respect to potential deleveraging or restructuring transactions. Exela Intermediate entered into confidentiality agreements (the "NDAs") with such parties (the "NDA Parties") in connection with those discussions.

Pursuant to the terms of the NDAs, Exela Intermediate agreed to publicly disclose certain confidential information provided to the NDA Parties (the "Cleansing Material") upon the occurrence of certain events, including if an agreement had not been reached by March 29, 2023. While the Company and the NDA Parties exchanged several communications and reached agreement on a number of terms, as outlined on Exhibit 99.1 hereto, no definitive agreement was reached on all terms. The parties are continuing their negotiations; however, the Company can offer no assurances that any transaction will be agreed or, if agreed, as to the terms of any such transaction, which may differ from the terms set forth in the term sheet referenced below.

Attached as Exhibit 99.1 hereto are forms of the latest bona fide term sheets exchanged by Exela Intermediate and the NDA Parties on March 14, 2023 and March 24, 2023, respectively, and attached as Exhibit 99.2 hereto is a copy of the Cleansing Materials.

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.** |

---

*(d) Exhibits*

---

| | |
|:---|:---|
| **Exhibit<br> Number** | **Exhibit Description** |
| [99.1](tm2310886d1_ex99-1.htm) | [Terms Sheets](tm2310886d1_ex99-1.htm) |
| [99.2](tm2310886d1_ex99-2.htm) | [Pro Forma Information Regarding Sierra and Neon](tm2310886d1_ex99-2.htm) |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |

---

**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: March 30, 2023

---

| | |
|:---|:---|
| EXELA TECHNOLOGIES, INC. | EXELA TECHNOLOGIES, INC. |
| By: | /s/ Erik Mengwall |
|  | Name: Erik Mengwall |
|  | Title: Secretary |

---

## Exhibit 99.1

**Exhibit 99.1**

**CONFIDENTIAL**

**SUBJECT TO FRE 408 AND STATE LAW EQUIVALENTS**

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**Category** | &nbsp;&nbsp;**Company Proposal (3/16/23)** | &nbsp;&nbsp;**Company Proposal (3/16/23)** | &nbsp;&nbsp;**Noteholder Proposal (3/24/23)** |
| &nbsp;&nbsp;***Conditions*** | &nbsp;&nbsp;This term sheet is expressly subject to: | &nbsp;&nbsp;This term sheet is expressly subject to: | &nbsp;&nbsp;Agreed |
|  | · | &nbsp;&nbsp;A representation that, other than Neon and XBP, no other assets have been transferred from Intermediate to ETI; |  |
|  | · | &nbsp;&nbsp;A representation that the consolidating balance sheet as of September 30, 2022 has not materially changed prior to closing of the exchange; and |  |
|  | · | &nbsp;&nbsp;Review of the 10-K when filed. |  |

---

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;***Coupon*** | &nbsp;&nbsp;Consenting holders (including ETI) agree to: | &nbsp;&nbsp;Consenting holders (including ETI) agree to: | &nbsp;&nbsp;Agreed, except liquidity threshold for determining cash interest payments set at $15 million |
|  | · | &nbsp;&nbsp;PIK 100% of coupon due July 15, 2023 |  |
|  | · | &nbsp;&nbsp;PIK 50% of coupons due January 15, 2024 and July 15, 2024; provided, however, for each 2024 coupon payment, the PIK portion of the coupon shall be paid in cash subject to liquidity at Intermediate being in excess of a to be determined pro forma for the cash payment of interest (subject to discussion of cash portion of interest payments being paid monthly or quarterly starting in August 2023) |  |
|  | · | &nbsp;&nbsp;Thereafter, 100% cash pay |  |
|  | &nbsp;&nbsp;Affiliate notes PIK 100% of coupon through January 15, 2025 | &nbsp;&nbsp;Affiliate notes PIK 100% of coupon through January 15, 2025 |  |
| &nbsp;&nbsp;***Exchange & Terms of New Notes*** | · | &nbsp;&nbsp;Consenting holders exchange existing notes for new senior secured notes (the "New Notes") at a 20% discount | &nbsp;&nbsp;Agreed |
|  | · | &nbsp;&nbsp;Terms of New Notes to be acceptable to the Steering Committee, provided, that new indenture will restrict sales or distributions of assets subject to liens and equity pledges (as well as all transactions that result in the release of liens on collateral) |  |
|  | · | &nbsp;&nbsp;Allow for asset sales to affiliates, subject to such asset sales being approved by Exela Intermediate LLC independent director, obtaining a fairness opinion, sold for no less than fair market value, on terms no less favorable than a third-party sale, and proceeds paid in full in cash |  |
|  | · | &nbsp;&nbsp;Additional changes to the indenture to prohibit, among other things, dividends, restricted payments, unrestricted subsidiaries, distributions, investments, additional indebtedness, affiliate transactions, intercompany transfers (including any transfer of cash or assets and any payments on intercompany debt), etc., until the New Notes are paid in full |  |
|  | · | &nbsp;&nbsp;New Notes Maturity: 4/15/2026 but spring to 7/12/23 if 2023 Notes or 2023 Term Loan is not repaid |  |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;***Minimum Participation*** | &nbsp;&nbsp;Subject to participation of at least 2/3rds of Existing Secured Notes not held by ETI<br>ETI held Existing Notes must participate in the exchange<br>MFN on private exchanges of Existing Secured Notes and any exchange/refinancing of non-participating Existing Secured Notes, including with respect to additional guarantees, additional collateral, or an earlier maturity than the New Secured Notes | &nbsp;&nbsp;Agreed, except Term Loans held by the Company, including up to approximately $21 million of Term Loans subject to agreed trades, and approximately $13.4 million in 2023 Notes held by the Company, must participate in the exchange at 20% discount |
| &nbsp;&nbsp;***Priority Debt Basket*** | &nbsp;&nbsp;New $50 million super senior secured debt basket to raise new capital on terms TBD; subject to ROFR to holders of New Notes | &nbsp;&nbsp;$30 million super senior debt basket |
| &nbsp;&nbsp;***New Notes*** | &nbsp;&nbsp;ETI entity to receive $15 million in New Notes as credit for $15 million in prior cash infusions and $25 million in New Notes as credit for $47mm cash infusion to make approximately $58 million 1/15/23 coupon payment (no other credit for any other cash infusions) | &nbsp;&nbsp;Agreed |

---

**CONFIDENTIAL**

**SUBJECT TO FRE 408 AND STATE LAW EQUIVALENTS**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Category** | &nbsp;&nbsp;**Company Proposal (3/16/23)** | &nbsp;&nbsp;**Noteholder Proposal (3/24/23)** |
| &nbsp;&nbsp;***Exit Consent*** | &nbsp;&nbsp;Per terms of the existing Indenture, will release collateral and remove other covenants, etc. from Existing Secured Notes | &nbsp;&nbsp;Agreed |
| &nbsp;&nbsp;***Credit Support*** | &nbsp;&nbsp;New Notes will be secured by Neon assets,<sup>1</sup> and pledge of stock in the immediate parent of XBP Europe (currently BTC International Holdings, Inc. ("<u>BTC</u>")), with customary and appropriate protections and covenants on BTC to ensure no leakage of the credit support from XBP Europe, including: (i) all asset sale proceeds by BTC (including through sale of XBP stock) applied per indenture; (ii) BTC may not, directly or indirectly, including through any other subsidiary, incur any debt or liens or make restricted payments, investments, distributions, or any intercompany transfers (including any transfer of cash or assets and any payments on intercompany debt), and (iii) BTC may not issue additional equity interests, common or preferred | &nbsp;&nbsp;Agreed |
| &nbsp;&nbsp;***New Directors*** | &nbsp;&nbsp;Immediate appointment of independent director (acceptable to the Steering Committee) at Exela Intermediate LLC on or prior to closing | &nbsp;&nbsp;Agreed |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;***Asset Sale Offers*** | &nbsp;&nbsp;Net proceeds from the sale of Neon assets up to $150 million to be used to finance asset sale offers: | &nbsp;&nbsp;Net proceeds from the sale of Neon assets up to $150 million to be used to finance asset sale offers: | &nbsp;&nbsp;Net proceeds from the sale of Neon assets up to $150 million to be used to finance asset sale offers: | &nbsp;&nbsp;Agreed |
|  | · | Through year 1: 60% | Through year 1: 60% |  |
|  | · | Through year 2: 70% | Through year 2: 70% |  |
|  | · | Year 3 and beyond: through a customary Dutch auction mechanism | Year 3 and beyond: through a customary Dutch auction mechanism |  |
|  |  | o | Any declined proceeds to be retained by ETI (free and clear of any liens) |  |
|  | &nbsp;&nbsp;First $75 million of net proceeds from the sale of XBP Europe to finance repurchases of New Notes through a customary Dutch auction mechanism | &nbsp;&nbsp;First $75 million of net proceeds from the sale of XBP Europe to finance repurchases of New Notes through a customary Dutch auction mechanism | &nbsp;&nbsp;First $75 million of net proceeds from the sale of XBP Europe to finance repurchases of New Notes through a customary Dutch auction mechanism |  |
|  | · | &nbsp;&nbsp;Any proceeds in excess of $75 million and any declined proceeds to be retained by ETI (free and clear of any credit support) | &nbsp;&nbsp;Any proceeds in excess of $75 million and any declined proceeds to be retained by ETI (free and clear of any credit support) |  |
|  | &nbsp;&nbsp;All asset sale offers must be made pro rata to New Notes, excluding any notes held by ETI and affiliates | &nbsp;&nbsp;All asset sale offers must be made pro rata to New Notes, excluding any notes held by ETI and affiliates | &nbsp;&nbsp;All asset sale offers must be made pro rata to New Notes, excluding any notes held by ETI and affiliates |  |

---

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;***2023 Maturities*** | &nbsp;&nbsp;2023 Notes, 2023 Term Loans, and [2023 amortization payments under the BRCC facility]<sup>2</sup> may be satisfied with: | &nbsp;&nbsp;2023 Notes, 2023 Term Loans, and [2023 amortization payments under the BRCC facility]<sup>2</sup> may be satisfied with: | &nbsp;&nbsp;Agreed, except baskets to be renegotiated following outreach to holders of indebtedness with 2023 maturities |
|  | · | &nbsp;&nbsp;Up to $50 million value of additional New Notes and/or cash; provided, that will only allow for additional $100mm of New Notes to refinance 2023 Notes and 2023 Term Loan |  |
|  | · | &nbsp;&nbsp;Modifications subject to the approval of the majority (by holdings) of the Steering Committee |  |
|  | &nbsp;&nbsp;Subject to confirmatory due diligence; Company to disclose terms of all ongoing discussions with holders of 2023 Notes and 2023 Term Loans | &nbsp;&nbsp;Subject to confirmatory due diligence; Company to disclose terms of all ongoing discussions with holders of 2023 Notes and 2023 Term Loans |  |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;***Releases*** | &nbsp;&nbsp;Mutual Releases solely with respect to transfer of Neon and XBP Europe assets | &nbsp;&nbsp;Agreed |
| &nbsp;&nbsp;***Ropes & Gray Fees*** | &nbsp;&nbsp;Payment of all accrued fees and expenses of Ropes & Gray | &nbsp;&nbsp;Agreed |

---

<sup>1</sup> On October 24, 2022, in a transaction known as "Project Neon" a subsidiary of Intermediate closed on the sale of its former Novitex onsite business operated by Exela Enterprise Solutions, Inc. ("EES") along with certain other assets to a subsidiary of Exela TopCo that is not a Subsidiary Guarantor. Immediately prior to this transaction EES distributed several of its other business to a subsidiary of Intermediate that remains a Subsidiary Guarantor (the distributed businesses constitute approximately 50% of the pre-existing EES business). Neon had September 30, 2022 TTM revenues of $142 million and adjusted EBITDA of $30 million.

<sup>2</sup> Subject to responses on Noteholders' diligence requests.

## Exhibit 99.2

**Exhibit 99.2**

**Pro Forma Financial Information**

Reconciliation of financial information of Exela Technologies, Inc., as "Parent" and "Reporting Entity" and pro forma financial information of Exela Intermediate LLC, as "Company", for the period ended September 30, 2022. Capitalized terms used but not defined herein shall have the meanings given in the INDENTURE, dated as of December 9, 2021 (as amended, supplemented or otherwise modified from time to time, the "Indenture"), by and among the Company, Exela Finance, Inc., the Subsidiary Guarantors party hereto from time to time and U.S. Bank National Association, as trustee.

**Notes:**

1) Refer to the form 10-Q filed with the SEC on November 14, 2022 for Exela Technologies, Inc., quarterly filing for the period ended September 30, 2022 (<u>https://www.sec.gov/ix?doc=/Archives/edgar/data/1620179/000155837022017856/xela-20220930x10q.htm</u>)<u>.</u>

2) A Consolidated Balance Sheet and Consolidated Statements of Operations are provided for the Reporting Entity and the Company to reflect the quantitative pro forma differences between the two as of September 30, 2022. These differences are caused by (i) cash held at the Reporting Entity and Subsidiaries that are not Subsidiaries of the Company (each an "Independent Subsidiary")(ii) $298 million of Notes held by Independent Subsidiaries (the amounts reflected in current portion of long-term debts for the Company also include $13.4 million of Old Notes now held by Independent Subsidiaries as of February 20, 2023, but not as of September 30, 2022), and (iii)(x) the exclusion of items relating to XBP Europe, Inc. ("XBP Europe") and (y) the exclusion on a pro forma basis of items related to Exela Enterprise Solutions, Inc. ("EES"), as further described below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Parent
 announced on October 10, 2022 that it had entered into a merger agreement relating to XBP
 Europe (<u>https://www.sec.gov/ix?doc=/Archives/edgar/data/1620179/000110465922107470/tm2227875d1_8k.htm</u>).
 Prior to entering into this agreement, during the third quarter of 2022, a subsidiary of
 the Company sold its EMEA business to an Independent Subsidiary and established XBP Europe.
 Thus XBP Europe and its subsidiaries' results are excluded from the Company's
 Balance Sheet and Consolidated Statements of Operations as shown in the attached. The enterprise
 value for the sold business was approximately $109.2 million.

&nbsp;&nbsp;&nbsp;&nbsp;b) On
 October 24, 2022, a subsidiary of the Company closed on the sale of its onsite business operated
 by EES along with certain other assets to an Independent Subsidiary. Immediately prior to
 this transaction EES distributed its business related to (1) federal, state, and local government
 customers, (2) certain finance and healthcare customers and (3) its digital assets group
 business to a Subsidiary of the Company that remains a Subsidiary Guarantor. The Company's
 Balance Sheet and Consolidated Statements of Operations as shown in the attached have been
 modified on a pro forma basis to give effect to these EES-related transactions, which occurred
 after September 30, 2022. The enterprise value for these sold assets was approximately $148.8
 million.

3) The accompanying reconciliation is extracted from the Reporting Entity's "consolidating" financials and is subject to the following notes:

&nbsp;&nbsp;&nbsp;&nbsp;a) The
 financial statements presented are unaudited results.

&nbsp;&nbsp;&nbsp;&nbsp;b) The
 financial statements presented are not consolidating financial statements. Consolidation
 and elimination entries, in particular account categories such as intercompany, investment
 in subsidiaries, equity and retained earnings and certain other items are not adjusted or
 eliminated at the levels presented for the Company, XBP Europe and EES.

&nbsp;&nbsp;&nbsp;&nbsp;c) Push
 down accounting for past mergers or acquisitions, including goodwill and intangible assets
 are recorded either at the segment level or Parent level and not at the levels presented
 for the Company XBP Europe and EES.

&nbsp;&nbsp;&nbsp;&nbsp;d) EES
 financials are preliminary and subject to change with regard to grouping and reclassification
 of account categories and/or updates for additional allocation and related changes within
 the consolidating financials.

&nbsp;&nbsp;&nbsp;&nbsp;e) Accounting
 considerations related to a carve-out entity's statement of financial position or statement
 of comprehensive income has not been applied to EES financials, instead, for the purposes
 of this reconciliation, revenue ratio-based percentage allocation was used to report the
 balance sheet and specific identification method used for statement of income.

&nbsp;&nbsp;&nbsp;&nbsp;f) Each
 of the transactions with Independent Subsidiaries described above are subject to a look back
 whereby if within six (6) months following their respective closings, (x) the buyer sells,
 transfers or otherwise exchanges one or more equity interests in a transaction where the
 price on an aggregate basis would be greater than the purchase price or (y) the Seller presents
 a report of the fair market value thereof that is greater than the purchase price, then in
 either event, Buyer shall at its option (i) pay to Seller the amount of such difference in
 cash within twelve months of the Closing, (ii) return a number of equity interests of equivalent
 value, or (iii) if the equity has been exchanged for other consideration, an equivalent portion
 of such other consideration. No accounting entries have been made to reflect these potential
 transactions.

4) Rounding: Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided.

**Consolidated Balance Sheet (Unaudited)**

As of September 30, 2022

*(in thousands of United States dollars)*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Exela <br> Technologies,<br> Inc.<br> Consolidated*<br> (Reported)*** | **Exela<br> Intermediate<br> LLC<br> ("Company")<br> Subsidiaries<br> with XBP<br> Europe & EES** | **XBP Europe and <br> Subsidiaries** | **EES and<br> Subsidiaries** | **Proforma<br> Company and<br> Subsidiaries<br> without XBP <br> Europe & EES** |
| **Assets** |  |  |  |  |  |
| Current assets |  |  |  |  |  |
| Cash and cash equivalents | $10401 | $5808 | $1506 | $376 | $3927 |
| Restricted cash | 34402 | 34402 |  |  | 34402 |
| Related party receivables | 504 | (11645) | 12149 |  | (11645) |
| Accounts receivable, net of allowance for doubtful accounts | 93600 | 105751 | 31700 |  | 74051 |
| Inventories, net | 17234 | 17234 | 4779 | 295 | 12160 |
| Prepaid expenses and other current assets | 28551 | 28551 | 9412 | 1393 | 17746 |
| **Total current assets** | **184690** | **180100** | **59546** | **2064** | **130639** |
| Property, plant and equipment, net of accumulated depreciation | 68788 | 65013 | 13716 | 1142 | 50154 |
| Operating lease right-of-use assets, net | 44943 | 44943 | 6135 | 296 | 38513 |
| Goodwill | 328071 | 328071 | 20295 | 61557 | 246220 |
| Intangible assets, net | 211659 | 211659 | 1533 | 51693 | 158433 |
| Deferred income tax assets | 1279 | 1279 | 8864 |  | (7585) |
| Other noncurrent assets | 25839 | 23812 | 619 | 1057 | 22136 |
| **Total assets** | **865270** | **854877** | **110708** | **117808** | **638510** |
| **Liabilities and Stockholders' Equity (Deficit)** |  |  |  |  |  |
| **Liabilities** |  |  |  |  |  |
| Current liabilities |  |  |  |  |  |
| Accounts payables | $80783 | $80783 | $13198 | $4272 | $63313 |
| Related party payables | 1698 | (22464) | 24162 |  | (22464) |
| Income tax payable | 1178 | 1178 |  | 72 | 1106 |
| Accrued liabilities | 52795 | 52545 | 18929 | 5753 | 27863 |
| Accrued compensation and benefits | 52925 | 52817 | 13738 | 208 | 38871 |
| Accrued interest | 29430 | 34341 |  | 179 | 34161 |
| Customer deposits | 18278 | 18278 | 929 | 2994 | 14356 |
| Obligation for claim payment | 50780 | 50780 |  |  | 50780 |
| Deferred revenue | 15681 | 15681 | 6247 | 155 | 9279 |
| Current portion of finance lease liabilities | 4902 | 4902 | 659 | 13 | 4230 |
| Current portion of operating lease liabilities | 13127 | 13127 | 2120 | 223 | 10784 |
| Current portion of long-term debts | 195043 | 122089 | 15684 | 84 | 106321 |
| **Total current liabilities** | **516620** | **424057** | **95666** | **13951** | **338602** |
| Long-term debt, net of current maturities | 909506 | 1227178 | 3516 |  | 1223662 |
| Finance lease liabilities, net of current portion | 7276 | 7276 | 709 | 10 | 6557 |
| Pension liabilities, net | 23165 | 23165 | 22087 |  | 1078 |
| Deferred income tax liabilities | 14046 | 14046 |  |  | 14046 |
| Long-term income tax liabilities | 2757 | 2757 |  |  | 2757 |
| Operating lease liabilities, net of current portion | 34573 | 34573 | 3938 | 111 | 30524 |
| Other long-term liabilities | 4888 | 4888 | 1451 | 405 | 3032 |
| Related party notes payable |  | (11164) | 11164 |  | (11164) |
| **Total liabilities** | **1512831** | **1726776** | **138531** | **14478** | **1609093** |
| **Stockholders' equity (deficit)** |  |  |  |  |  |
| **Total stockholders' deficit** | (647560) | (871899) | (27823) | 103330 | (970583) |
| **Total liabilities and stockholders' deficit** | $**865270** | $**854877** | $**110708** | $**117808** | $**638510** |

---

**Consolidated Statements of Income (Unaudited)**

Nine months ended September 30, 2022

*(in thousands of United States dollars)* 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Exela <br> Technologies,<br> Inc.<br> Consolidated*<br> (Reported)*** | **Exela<br> Intermediate<br> LLC<br> ("Company")<br> Subsidiaries<br> with XBP<br> Europe & EES** | **XBP Europe<br> and <br> Subsidiaries** | **EES and<br> Subsidiaries** | **Proforma<br> Company and<br> Subsidiaries<br> without XBP <br> Europe & EES** |
| Revenue | $810205 | $809956 | $136722 | $106060 | $567174 |
| Cost of Revenue (exclusive of depreciation and amortization | 658623 | 658623 | 103172 | 77424 | 478027 |
| Selling, general and administrative expenses | 137604 | 132557 | 22721 | 7255 | 102580 |
| Depreciation and amortization | 53942 | 53824 | 3357 | 2895 | 47572 |
| Impairment of goodwill and other intangible assets | 29565 | 29565 |  |  | 29565 |
| Related party expense, net | 6189 | 6189 | 7326 |  | (1137) |
| **Operating profit (loss)** | (75718) | (70801) | 146 | 18485 | (89433) |
| **Other expense (income), net:** |  |  |  |  |  |
| Interest expense, net | 122927 | 136336 | 2094 | 14 | 134228 |
| Other expense (income), net & Debt modification and extinguishment costs (gain), net | 16724 | 20284 | 52 |  | 20232 |
| Sundry expense (income), net | 348 | 348 | 2863 |  | (2515) |
| **Net income (loss) before income taxes** | **(215716)** | **(227769)** | **(4863)** | **18472** | **(241378)** |
| &nbsp;&nbsp;&nbsp;Income tax expense (benefit) | 5721 | 5721 | 1933 |  | 3788 |
| **Net income / (loss)** | $**(221437)** | $**(233490)** | $**(6796)** | $**18472** | $**(245166)** |

---