Item 4. Purpose of Transaction
The responses set forth in Items 3 and 6 hereof are incorporated by reference in their entirety.
The Reporting Persons acquired the securities reported herein for investment purposes and intend to review their investments in the Issuer on a continuing basis. Depending on various factors, including but not limited to the Issuer’s financial position and strategic direction, price levels of the Common Stock, conditions in the securities markets, various laws and regulations applicable to the Issuer and companies in its industry and the Reporting Persons’ ownership in the Issuer, and general economic and industry conditions, the Reporting Persons may in the future take actions with respect to their investment in the Issuer as they deem appropriate, including changing their current intentions, with respect to any or all matters required to be disclosed in this Schedule 13D. Without limiting the foregoing, the Reporting Persons may, from time to time, acquire or cause affiliates to acquire additional shares of Common Stock or other securities of the Issuer (including any combination or derivative thereof), dispose, or cause affiliates to dispose, of some or all of their shares of Common Stock or other securities of the Issuer or continue to hold, or cause affiliates to hold, shares of Common Stock or other securities of the Issuer (or any combination or derivative thereof).
In addition, without limitation, the Reporting Persons have and intend to continue to engage from time to time in discussions with management or the board of directors of the Issuer about its business, operations, strategy, plans and prospects. In addition, without limitation, the Reporting Persons may engage in discussions with management, the board of directors of the Issuer, stockholders or other security holders of the Issuer and other relevant parties or take other actions concerning any extraordinary corporate transaction (including, but not limited to, a merger, reorganization or liquidation), a sale or transfer of a material amount of assets, a change in the board of directors or management, a material change in the capitalization or dividend policies, other material changes in the Issuer’s business or corporate structure, changes in the Issuer’s charter, bylaws or other actions that may impede the acquisition of control, de-listing or de-registration of the Issuer, or similar actions.
Except as set forth herein, or as would occur upon completion of any of the matters discussed herein, the Reporting Persons have no present plans, proposals or intentions which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Although the foregoing reflects activities presently contemplated by the Reporting Persons, the foregoing is subject to change at any time.
Item 5. Interest in Securities of the Issuer
| (a) | The information contained on the cover pages and Item 2 to this Schedule 13D is incorporated herein by reference. The percentage set forth in row 13 is based on 482,843,052 shares of Common Stock issued and outstanding as of May 4, 2023, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the SEC on May 9, 2023. |
| (b) | The information contained on the cover pages and Item 2 to this Schedule 13D is incorporated herein by reference. |
| (c) | The transactions in the shares of Common Stock on behalf of each of Mr. Moreno, SunChase and Verde during the past sixty days are set forth in Annex B and are incorporated herein by reference. |
| (d) | No person other than the Reporting Persons disclosed in this Schedule 13D is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock subject to this Schedule 13D. |
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
On July 26, 2023, the Reporting Persons entered into a Joint Filing Agreement in which the Reporting Persons agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to securities of the Issuer, to the extent required by applicable law. The Joint Filing Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Nevco Holdings, Inc. (“Nevco,” an affiliated entity of Mr. Moreno) holds $2,264,000 of the Issuer’s 5.125% Senior Secured Notes due August 15, 2027, pursuant to the terms of that Indenture dated as of August 23, 2019, by and among the Issuer and the parties thereto.
The following parties hold 7.750% Senior Notes of the Issuer due April 15, 2028 (the “2028 Notes”), pursuant to the terms of that Indenture dated as of February 17, 2021 by and among the Issuer and the parties thereto: (i) Nevco (an affiliated entity of Mr. Moreno) holds $5,000,000 in aggregate principal amount of the 2028 Notes, (ii) SunChase holds $2,650,000 in aggregate principal amount of the 2028 Notes, and (iii) VerCap LP (an affiliated entity of Mr. Garcia) holds $20,000,000 in aggregate principal amount of the 2028 Notes.
VerCap LP (an affiliated entity of Mr. Garcia) holds $32,000,000 in aggregate principal amount of the Issuer’s First Lien Loan due August 23, 2026, pursuant to the terms of the Credit Agreement dated as of August 23, 2019, and as amended June 12, 2023, by and among the Issuer and the parties thereto.
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.
