Exhibit 99.1
Mohawk Group Closes Previously Announced Debt Refinancing
NEW YORK, April 9, 2021 Mohawk Group Holdings, Inc. (Nasdaq: MWK) (“Mohawk” or the “Company”) today announced that it has closed the refinancing of all of its previously outstanding debt, including two senior secured notes and its revolver credit facility. The Company previously announced its intent to refinance its outstanding debt on March 8, 2021. Pursuant to the refinancing, Mohawk issued senior secured promissory notes in an aggregate principal amount of $110.0 million to two affiliated institutional lenders for a cash payment to Mohawk of $57.7 million and the exchange of two senior secured promissory notes with an aggregate principal amount of $52.3 million previously issued to the institutional lenders. $14.8 million of the net proceeds were used to repay all amounts owed under the Company’s Amended and Restated Credit and Security Agreement with MidCap Funding X Trust. The new senior secured promissory notes have an 8% annual interest rate payable in cash on a quarterly basis with a three year maturity. In connection with the refinancing, the Company issued to the institutional lenders warrants to purchase an aggregate of 2,259,166 shares of the Company’s common stock with an exercise price of $31.74 per share. The Company expects to use the remaining net proceeds of $40.8 million, after deducting fees and expenses, for potential acquisitions, working capital and general corporate purposes.
Yaniv Sarig, Co-Founder and Chief Executive Officer, commented, “This refinancing is the first step in optimizing our capital structure to execute on our accretive M&A strategy. We remain focused on advancing on our strong pipeline of potential M&A targets, including our previously announced anticipated acquisition of Photo Paper Direct.”
A.G.P. / Alliance Global Partners acted as sole placement agent on the debt transaction.
About Mohawk Group Holdings, Inc.
Mohawk Group Holdings, Inc., together with its subsidiaries (“Mohawk”), is a rapidly growing technology-enabled consumer products company that uses machine learning, natural language processing, and data analytics to design, develop, market and sell products. Mohawk predominantly operates through online retail channels such as Amazon and Walmart. Mohawk has twelve owned and operated brands and sells products in multiple categories, including home and kitchen appliances, kitchenware, environmental appliances (i.e., dehumidifiers and air conditioners), beauty-related products and, to a lesser extent, consumer electronics. Mohawk was founded on the premise that if a company selling consumer packaged goods was founded today, it would apply artificial intelligence and machine learning, the synthesis of massive quantities of data and the use of social proof to validate high caliber product offerings as opposed to over-reliance on brand value and other traditional marketing tactics.
