Traegar (COOK) and Red Flags from EBAY, CP, NFLX, LEU, and CTXR
Bedrock AI Red Flags - Dirty Laundry
Welcome to our weekly reports featuring impactful and usual disclosures as extracted by Bedrock AI’s algorithms.
Filings from the week of September 6 - 10.
TRAEGER INC( COOK)
10-Q | Market cap: $2.7B
Traeger has a number of atypical credit risk disclosures, including:
Credit facilities are collateralized by substantially all assets and equity holdings of a number of companies in the group. [1]
Substantially all receivables collateralize a receivable financing agreement. [2]
Many of Traeger’s products are manufactured in China. [3] Trade imbalances with China continue to cause significant increase in shipping costs.
Read the full post on our blog here.
In connection with their recent IPO, the company has granted 12 million RSU, of which 7.7M were granted to the CEO. The company anticipates dilutive effects (weighted-average units outstanding was 109M at quarter-end) and increased stock-based compensation expenses of $117M over five years.[4]
Traegar is a controlled company. [5]
“Except as noted below, the Credit Facilities are collateralized by substantially all of the assets of TGP Holdings III LLC, TGPX Holdings II LLC, Traeger Pellet Grills Holdings LLC and certain subsidiaries of Traeger Pellet Grills Holdings LLC, including intellectual property, mortgages, along with the equity interest of each of these respective entities.”
“The assets of Traeger SPE LLC, substantively consisting of our accounts receivable, collateralize the receivables financing agreement discussed below and do not collateralize the Credit Facilities.”
“Many of our primary products are manufactured by entities located in China.”
“In light of the 7,782,957 RSUs subject to the Chief Executive Officer Award and the 4,380,285 RSUs subject to the IPO RSUs granted in connection with our IPO, we anticipate that we will incur substantial stock-based compensation expenses and may expend substantial funds to satisfy tax withholding and remittance obligations related to these RSUs.”... “The grant date fair value of the PSU CEO Awards and the Time-Based RSU CEO Awards is estimated to be approximately $116.6 million, which we estimate will be recognized as compensation expense over a weighted average period of 4.94 years, though could be earlier if the stock price goals are achieved earlier than we estimated.”
“Because more than 50% of the voting power in the election of our directors will be held by an individual, group, or another company, we will be a “controlled company” within the meaning of the corporate governance standards of the New York Stock Exchange.”
From the 8-Ks
EBAY INC (EBAY) On September 7, 2021, Jae Hyun Lee, Senior Vice President, International of eBay Inc. agreed to step down from his role effective immediately.
CANADIAN PACIFIC RAILWAY LTDCN (CP) Kansas City Southern (“KCS”) is terminating their merger agreement with Canadian National Railway Company, declaring CP’s offer (to acquire all outstanding shares of KCS common stock for 2.884 CP common shares and $90 in cash for each share of KCS common stock) to be a “Company Superior Proposal”.
NETFLIX INC (NFLX) amended their severance plan to increase the minimum severance benefit from 9 to 12 months for employees at a level of VP and above.
CENTRUS ENERGY CORP (LEU) finalized their settlement arising from pension disputes with the US Department of Energy, and will receive $43.5 million ($37M principal, $6.5M interest) from the department.
CITIUS PHARMACEUTICALS INC (CTXR) entered into an agreement with Dr. Reddy’s to acquire exclusive license of a late-stage oncology drug, E777 for initial cost of $30M, and obligations to pay up to $40M for approval milestones, $70M for development milestones, and up to $300M for commercial milestones, in addition to quarterly royalties.
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