Table of Content Convertible Debt On July 31, 2023, $42.5 million of the $57.5 million under the Incremental Term Loan was drawn down and the proceeds thereof were used to repay in full the remaining principal and accrued interest of the outstanding Notes on their maturity date of August 1, 2023. Previously, on July 31, 2017, we had issued $230.0 million principal amount of Notes in a private offering to qualified institutional buyers (as defined in the Securities Act of 1933) pursuant to Rule 144A under the Securities Act (the "Offering”). Net proceeds received from the Offering were approximately $222.3 million after deducting discounts, commissions and expenses and were used to repay outstanding borrowings under a previous credit facility. In December 2020, we retired $136.9 million par value of our Notes, and on October 4, 2022, we had entered into an exchange agreement (the "Exchange Agreement”) with certain holders to exchange approximately $57.0 million of aggregate principal amount, plus accrued and unpaid PIK Interest, of the Notes for an equivalent increased principal amount of term loan under the Subordinated Term Loan Credit Agreement. Following the closing of the Exchange Agreement and Amendment No.8 to the Subordinated Term Loan Credit Agreement, we had approximately $41.2 million in aggregate principal amount of Notes outstanding. The Notes bore interest at a rate of 5.0% per year, payable semiannually in arrears on February 1 and August 1 of each year, beginning on February 1, 2018. The Notes were originally scheduled to mature on August 1, 2023. Effective interest rate as of December 31, 2022 was 7.84%. Amortization of discount and debt issuance cost for the years ended December 31, 2023 and 2022 amounted to $0.5 million and $2.4 million, respectively. As of December 31, 2022, the outstanding net carrying balance of the Notes was $40.7 million consisting of the principal balance of $41.2 million and unamortized discount and debt issuance cost of $0.5 million. Cash interest paid for the years ended December 31, 2023 and 2022 amounted to $2.1 million and $2.1 million, respectively. PIK interest of $4.2 million was added to principal during 2022. There was no PIK interest in 2023. Fair Value of Debt The fair value of our 2022 ABL Credit Facility, Uptiered Loan, Incremental Term Loan and ME/RE Loans are representative of the carrying value based upon the respective interest rate terms and management’s opinion that the current rates available to us with the same maturity and security structure are equivalent to that of the debt. The fair value of the Notes as of December 31, 2022 was $37.5 million, (inclusive of the fair value of the conversion option) and a "Level 2” measurement, determined based on the observed trading price of these instruments. The Notes were fully paid off on August 1, 2023. 1970 Group Substitute Insurance Reimbursement Facility On September 29, 2022, we entered into the Substitute Insurance Reimbursement Facility Agreement with 1970 Group Inc. ("1970 Group’) (as amended by that certain first amendment thereto dated August 29, 2023, the "Substitute Insurance Reimbursement Facility Agreement”). Under this agreement, the 1970 Group extended us credit in the form of a substitute reimbursement facility (the "Substitute Reimbursement Facility”) to initially provide up to approximately $21.4 million of letters of credit on our behalf in support of our workers’ compensation, commercial automotive and general liability insurance carriers for workers’ compensation, commercial automotive and/or general liability policies (the "Insurance Policies”). Such letters of credit arranged by the 1970 Group permitted the return of certain existing letters of credit for our account that were outstanding for the purpose of supporting the Insurance Policies and that are required to be collateralized, thereby providing us increased liquidity. Under the Substitute Insurance Reimbursement Facility Agreement, we are required to reimburse the 1970 Group for any draws made under the letters of credit within five business days of notice of any such draw. The Substitute Insurance Reimbursement Facility Agreement terminates upon the earlier of (i) the expiration or termination of our Insurance Policies or (ii) September 29, 2024 (as amended). The Substitute Insurance Reimbursement Facility Agreement contains certain affirmative covenants regarding our insurance contracts, and certain events of default. Our obligations under the Substitute Insurance Reimbursement Facility Agreement are not guaranteed by any of our subsidiaries, are unsecured and are subordinated to our debt obligations. As of December 31, 2023 we have $21.3 million of letters of credit outstanding under the Substitute Reimbursement Facility. According to the provisions of ASC 470 – Debt, the arrangement is a Substitute Insurance Reimbursement Facility limited to the amounts drawn under the letters of credit. Therefore, until we use or draw on the Substitute Insurance Reimbursement Facility, the letters of credit are treated as an off-balance sheet credit arrangement. Fees in the amount of $2.9 million and $2.9 million, respectively, were paid by us during the years ended December 31, 2023 and 2022 and were deferred and amortized over the term of the arrangement. As of December 31, 2023 and 2022, the unamortized balance of $1.8 million was included in other current assets. 54