AUBURN HILLS, Mich.—Unique Fabricating Inc., an engineering and manufacturing firm of foam, rubber and plastic components, has secured the final $1 million of an overall $4 million loan from private investors.
The final $1 million was secured Oct. 7 and the initial $3 million was secured Oct. 4, with Taglich Brothers Inc. serving as placement agent for the financing.
The loan comes with a transaction structure that offers several layers of protection for investors, according to an Oct. 10 press release from Unique Fabricating.
Unique receives the $4 million in pay-in-kind notes at an interest rate of 12 percent per year, and the notes must be repaid in 12 months.
As part of the investment contract, investors will receive warrants for up to (aggregate) 120,000 shares at 52 cents per share, through the end of 2022.
If the loan is not repaid in the prescribed year, investors will receive warrants for another 280,000 shares (aggregate).
Interest can be converted into common stock at the same price as the investors' warrant exercise price.
Notes are secured by Unique Fabricating's Employee Retention Credits and "and any proceeds from the sale of a non-operational financial asset," according to Unique Fabricating.
Proceeds gleaned have gone toward the outstanding principal amount of Unique Fabricating's bank term loans by about $1.98 million ... "and to reduce the outstanding borrowings on the company's revolving line of credit by $2.02 million, which remains available to be reborrowed," according to the company.
Unique Fabricating works in the noise, vibration and harshness management and air/water sealing applications for the transportation, appliance, medical and consumer, and off-road markets.
Unique, founded in 1975 with several manufacturing locations in the Midwest, uses its own manufacturing processes, including die cutting, thermoforming, compression molding, fusion molding, and reaction injection molding.