BLUE BELL, PA — QualTek Services Inc. (NASDAQ: QTEK) this week announced that it has entered into a forbearance agreement with a majority of convertible noteholders of its Senior Unsecured Convertible Notes (“Convertible Notes”). This forbearance agreement follows the Company’s election to enter a 30-day grace period ending April 14, 2023, to make the interest payment on its Convertible Notes and subsequent decision to not make the payment. The Company also entered into a forbearance agreement with its administrative agent and lenders on its ABL Credit Agreement and a limited waiver agreement with required creditors of its Term Loan Credit Agreement. As detailed in the 8-K filed by the Company, the agreements will allow the Company to continue to work with its lenders to strengthen its balance sheet.
“These forbearance and waiver agreements position QualTek to deliver on the continued strong demand for our services and afford us additional runway to continue productive discussions with our lenders,” said QualTek’s Chief Executive Officer Scott Hisey. “We are working towards a holistic plan to improve our balance sheet that will enable us to better serve our customers and continue building upon our consistent track record of providing high-quality infrastructure services for our valued customer base.”
Additionally, on April 18, 2023, the Company received a notice (the “Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) stating that because the Company has not yet filed its Form 10-K, the Company is no longer in compliance with Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission (the “SEC”).
This notification has no immediate effect on the listing of the Company’s shares on Nasdaq. However, if the Company fails to timely regain compliance with the Nasdaq Listing Rule, the Company’s Class A common stock will be subject to delisting from Nasdaq.
Under Nasdaq rules, the Company has 60 calendar days to either file the Form 10-K or to submit to Nasdaq a plan to regain compliance with the Nasdaq Listing Rule. If the Company does not file the 10-K but submits a plan to regain compliance, and Nasdaq accepts the Company’s plan, then Nasdaq may grant the Company up to 180 days from the prescribed due date for filing the Form 10-K to regain compliance. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel.
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