Subsequent Events	6 Months Ended
Jun. 30, 2023
Subsequent Events.
Subsequent Events	14. Subsequent Events The Company has evaluated all events that occurred after the balance sheet date through the date when these condensed consolidated financial statements were issued to determine if they must be reported. 2026 Notes Exchange On July 11, 2023, Exela Intermediate LLC and Exela Finance Inc. (together, the “Issuers”), wholly-owned subsidiaries of the Company, certain guarantors and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the “New Notes Trustee”), entered into an indenture (the “New Notes Indenture”) governing the Company’s new 11.500% First-Priority Senior Secured Notes due 2026 (the “New Notes”) and issued approximately $767.8 million aggregate principal amount of the New Notes (which does not take into account $314.4 million aggregate principal amount of the New Notes issued to affiliates of the Issuers, which will be eliminated for the purpose of consolidated financial statements of the Company, in exchange for 2026 Notes, 2023 Notes and 2023 Term Loans held by them and in satisfaction of amounts owed to such affiliates as a result of prior cash payments made by such affiliates to or on behalf of the Issuers), which includes (i) $764.8 million aggregate principal amount of the New Notes issued as consideration for the exchange of $956.0 million aggregate principal amount of the Issuers’ existing 2026 Notes pursuant to a public exchange offer (the “2023 Exchange Offer”), which is equivalent to $800 of the New Notes per $1,000 principal amount of the existing 2026 Notes and (ii) $3.0 million aggregate principal amount of the New Notes issued as consideration for the private exchange of certain of the Company’s 2023 Term Loans. Following this issuance and related transactions, approximately $24.0 million of 2026 Notes and no 2023 Term Loans or 2023 Notes remain outstanding. The Issuers’ obligations under the New Notes and the New Notes Indenture are irrevocably and unconditionally guaranteed, jointly and severally, by the same guarantors (the “Guarantors”) that guarantee the 2026 Notes other than certain guarantors that have ceased to have operations or assets and by certain of the Issuers’ other affiliates. The New Notes and the related guarantees are first-priority senior secured obligations of the Issuers and the Guarantors. The New Notes will mature on April 15, 2026. Interest on the New Notes will accrue at 11.500% per annum and will be paid semi-annually, in arrears, on January 15 and July 15 of each year, beginning July 15, 2023. Interest will be payable in cash or in kind by issuing additional New Notes (or increasing the principal amount of the outstanding New Notes) (“PIK Interest”); provided that (i) with respect to the New Notes held by Affiliates (as defined in the New Notes Indenture) of the Issuers, for interest payment dates through and including the January 15, 2025 interest payment date, such interest shall be paid only in kind as PIK Interest and (ii) with respect to all other New Notes, (A) for the July 15, 2023 interest payment date, such interest shall be paid in kind as PIK Interest, (B) for each interest payment date from and including the January 15, 2024 interest payment date through and including the July 15, 2024 interest payment date, such interest shall be paid in cash in an amount equal to (i) 50% of such interest plus (ii) an amount not to exceed an amount that, pro forma for such payment, would leave the issuers with Unrestricted Cash (as defined in the New Notes Indenture) of at least $15 million, with the remaining interest paid in kind as PIK Interest, and (C) for interest payment dates falling on or after January 15, 2025, such interest shall be paid in cash. The issuers may redeem the New Notes at their option, in whole at any time or in part from time to time, at a redemption price of 100%, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, the New Notes will be mandatorily redeemable in part upon the sale of certain assets that constitute additional credit support. The New Notes Indenture contains covenants that limit the Issuers’ and the Affiliated Guarantors (as defined below) and their respective subsidiaries’ ability to, among other things, (i) incur or guarantee additional indebtedness, (ii) pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments, (iii) make investments, (iv) consummate certain asset sales, (v) engage in certain transactions with affiliates, (vi) grant or assume certain liens and (vii) consolidate, merge or transfer all or substantially all of their assets. These covenants are subject to a number of important limitations and exceptions. In addition, upon the occurrence of specified change of control events, the Issuers must offer to repurchase the New Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. The New Notes Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all of the then outstanding New Notes to be due and payable immediately. On July 11, 2023, we entered into a seventh supplemental indenture to the 2026 Notes Indenture which eliminated substantially all of the restrictive covenants, eliminated certain events of default, modified covenants regarding mergers and consolidations and modified or eliminated certain other provisions, including certain provisions relating to future guarantors and defeasance, contained in the 2026 Notes Indenture and the 2026 Notes. In addition, all of the collateral securing the 2026 Notes was released pursuant to the seventh supplemental indenture. The Company expects to account for the Note Exchange as a troubled debt restructuring under ASC 470-60 in the third quarter 2023. Senior Secured Term Loan On July 11, 2023, the Company entered into a financing agreement with certain lenders and Blue Torch Finance LLC, as administrative agent, pursuant to which the lenders extended a term loan of principal amount of $40.0 million to the Company. On the same date, the Company used proceeds of this term loan and cash on hand to repay its outstanding 2023 Notes and 2023 Term Loans. Special Voting Preferred Stock On October 9, 2023, the Company entered into the Subscription, Voting and Redemption Agreement with GP-HGM LLC (“GP-HGM”), an entity controlled by our Executive Chairman, pursuant to which GP-HGM purchased 1,000,000 shares of a new class of preferred stock designated as “Special Voting Stock” for an aggregate purchase price of $100 and agreed to vote all of the shares of Special Voting Stock at the annual meeting of stockholders, scheduled for December 5, 2023 (the “Annual Meeting"), in proportion to the votes cast at the Annual Meeting. Each share of Special Voting Stock is entitled to 20,000 votes per share. The Company has further agreed to redeem the shares of Special Voting Stock for an aggregate price of $100 on the first business day following the date on which the voting on the Amendment to Series B Certificate of Designations Proposal has concluded. At the Annual Meeting, stockholders will be asked to approve an amendment to the Certificate of Designations of the Company’s Series B Preferred Stock to allow the Company to have the ability to (a) pay dividends in shares of Common Stock, (b) pay less than all of the accrued dividends, and (c) pay dividends on any date designated by the Company’s board of directors for the payment of dividends. Completion of the Merger On November 29, 2023, the Company completed the merger of its European business with CFFE. The combined company now operates as XBP Europe and, beginning on November 30, 2023, XBP Europe shares started trading on the Nasdaq Stock Market under the ticker symbol “XBP” and its warrants started trading on the Nasdaq Stock Market under the ticker symbol “XBPEW”. The business combination will be accounted for as a reverse capitalization in accordance with FASB’s ASC Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, CFFE will be treated as the “acquired” company for financial reporting purposes with XBP Europe surviving as a direct wholly-owned subsidiary of CFFE.

Subsequent Events

6 Months Ended

Jun. 30, 2023

14. Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through the date when these condensed consolidated financial statements were issued to determine if they must be reported.

2026 Notes Exchange

On July 11, 2023, Exela Intermediate LLC and Exela Finance Inc. (together, the “Issuers”), wholly-owned subsidiaries of the Company, certain guarantors and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the “New Notes Trustee”), entered into an indenture (the “New Notes Indenture”) governing the Company’s new 11.500% First-Priority Senior Secured Notes due 2026 (the “New Notes”) and issued approximately $767.8 million aggregate principal amount of the New Notes (which does not take into account $314.4 million aggregate principal amount of the New Notes issued to affiliates of the Issuers, which will be eliminated for the purpose of consolidated financial statements of the Company, in exchange for 2026 Notes, 2023 Notes and 2023 Term Loans held by them and in satisfaction of amounts owed to such affiliates as a result of prior cash payments made by such affiliates to or on behalf of the Issuers), which includes (i) $764.8 million aggregate principal amount of the New Notes issued as consideration for the exchange of $956.0 million aggregate principal amount of the Issuers’ existing 2026 Notes pursuant to a public exchange offer (the “2023 Exchange Offer”), which is equivalent to $800 of the New Notes per $1,000 principal amount of the existing 2026 Notes and (ii) $3.0 million aggregate principal amount of the New Notes issued as consideration for the private exchange of certain of the Company’s 2023 Term Loans. Following this issuance

and related transactions, approximately $24.0 million of 2026 Notes and no 2023 Term Loans or 2023 Notes remain outstanding.

The Issuers’ obligations under the New Notes and the New Notes Indenture are irrevocably and unconditionally guaranteed, jointly and severally, by the same guarantors (the “Guarantors”) that guarantee the 2026 Notes other than certain guarantors that have ceased to have operations or assets and by certain of the Issuers’ other affiliates. The New Notes and the related guarantees are first-priority senior secured obligations of the Issuers and the Guarantors.

The New Notes will mature on April 15, 2026. Interest on the New Notes will accrue at 11.500% per annum and will be paid semi-annually, in arrears, on January 15 and July 15 of each year, beginning July 15, 2023. Interest will be payable in cash or in kind by issuing additional New Notes (or increasing the principal amount of the outstanding New Notes) (“PIK Interest”); provided that (i) with respect to the New Notes held by Affiliates (as defined in the New Notes Indenture) of the Issuers, for interest payment dates through and including the January 15, 2025 interest payment date, such interest shall be paid only in kind as PIK Interest and (ii) with respect to all other New Notes, (A) for the July 15, 2023 interest payment date, such interest shall be paid in kind as PIK Interest, (B) for each interest payment date from and including the January 15, 2024 interest payment date through and including the July 15, 2024 interest payment date, such interest shall be paid in cash in an amount equal to (i) 50% of such interest plus (ii) an amount not to exceed an amount that, pro forma for such payment, would leave the issuers with Unrestricted Cash (as defined in the New Notes Indenture) of at least $15 million, with the remaining interest paid in kind as PIK Interest, and (C) for interest payment dates falling on or after January 15, 2025, such interest shall be paid in cash.

The issuers may redeem the New Notes at their option, in whole at any time or in part from time to time, at a redemption price of 100%, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, the New Notes will be mandatorily redeemable in part upon the sale of certain assets that constitute additional credit support.

The New Notes Indenture contains covenants that limit the Issuers’ and the Affiliated Guarantors (as defined below) and their respective subsidiaries’ ability to, among other things, (i) incur or guarantee additional indebtedness, (ii) pay dividends or distributions on, or redeem or repurchase, capital stock and make other restricted payments, (iii) make investments, (iv) consummate certain asset sales, (v) engage in certain transactions with affiliates, (vi) grant or assume certain liens and (vii) consolidate, merge or transfer all or substantially all of their assets. These covenants are subject to a number of important limitations and exceptions. In addition, upon the occurrence of specified change of control events, the Issuers must offer to repurchase the New Notes at 101% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date. The New Notes Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all of the then outstanding New Notes to be due and payable immediately.

On July 11, 2023, we entered into a seventh supplemental indenture to the 2026 Notes Indenture which eliminated substantially all of the restrictive covenants, eliminated certain events of default, modified covenants regarding mergers and consolidations and modified or eliminated certain other provisions, including certain provisions relating to future guarantors and defeasance, contained in the 2026 Notes Indenture and the 2026 Notes. In addition, all of the collateral securing the 2026 Notes was released pursuant to the seventh supplemental indenture.

The Company expects to account for the Note Exchange as a troubled debt restructuring under ASC 470-60 in the third quarter 2023.

Senior Secured Term Loan

On July 11, 2023, the Company entered into a financing agreement with certain lenders and Blue Torch Finance LLC, as administrative agent, pursuant to which the lenders extended a term loan of principal amount of $40.0 million to

the Company. On the same date, the Company used proceeds of this term loan and cash on hand to repay its outstanding 2023 Notes and 2023 Term Loans.

Special Voting Preferred Stock

On October 9, 2023, the Company entered into the Subscription, Voting and Redemption Agreement with GP-HGM LLC (“GP-HGM”), an entity controlled by our Executive Chairman, pursuant to which GP-HGM purchased 1,000,000 shares of a new class of preferred stock designated as “Special Voting Stock” for an aggregate purchase price of $100 and agreed to vote all of the shares of Special Voting Stock at the annual meeting of stockholders, scheduled for December 5, 2023 (the “Annual Meeting"), in proportion to the votes cast at the Annual Meeting. Each share of Special Voting Stock is entitled to 20,000 votes per share. The Company has further agreed to redeem the shares of Special Voting Stock for an aggregate price of $100 on the first business day following the date on which the voting on the Amendment to Series B Certificate of Designations Proposal has concluded.

At the Annual Meeting, stockholders will be asked to approve an amendment to the Certificate of Designations of the Company’s Series B Preferred Stock to allow the Company to have the ability to (a) pay dividends in shares of Common Stock, (b) pay less than all of the accrued dividends, and (c) pay dividends on any date designated by the Company’s board of directors for the payment of dividends.

Completion of the Merger

On November 29, 2023, the Company completed the merger of its European business with CFFE. The combined company now operates as XBP Europe and, beginning on November 30, 2023, XBP Europe shares started trading on the Nasdaq Stock Market under the ticker symbol “XBP” and its warrants started trading on the Nasdaq Stock Market under the ticker symbol “XBPEW”.

The business combination will be accounted for as a reverse capitalization in accordance with FASB’s ASC Topic 805, Business Combinations (“ASC 805”). Under this method of accounting, CFFE will be treated as the “acquired” company for financial reporting purposes with XBP Europe surviving as a direct wholly-owned subsidiary of CFFE.