Form 8-K - Current report

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported):

July 29, 2024 (July 29, 2024)

 

Rite Aid Corporation

(Exact name of registrant as specified in its charter)

 

Delaware		1-5742		23-1614034
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification Number)

 

P.O. Box 3165

Harrisburg, Pennsylvania 17105

(Address of principal executive offices, including zip code)

 

[phone]

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:: None (*)

 

(*) On October 17, 2023, Rite Aid Corporation’s common stock, which previously traded on the New York Stock Exchange under the symbol RAD, began trading exclusively on the over-the-counter market under the symbol RADCQ. On October 31, 2023, the New York Stock Exchange filed a Form 25-NSE with the U.S. Securities and Exchange Commission and Rite Aid Corporation’s common stock was subsequently delisted from the New York Stock Exchange. On January 29, 2024, Rite Aid Corporation’s common stock was deregistered under Section 12(b) of the Securities Exchange Act of 1934, as amended.

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨

 

 

 

 

 

Explanatory Note

 

This Form 8-K is being furnished solely to fulfill the obligations of Rite Aid Corporation (the “Company”), under those certain Confidentiality Agreements (as defined below) to publicly disclose certain confidential information (collectively, the “Cleansing Materials”), upon the occurrence of certain conditions.

 

Item 7.01.

Regulation FD Disclosure.

 

Cleansing Material

 

In August 2023 the Company executed confidentiality agreements (collectively, the “Confidentiality Agreements”) with certain members of an ad hoc group of holders of the Company’s (x) 7.500% senior secured notes due July 1, 2025 and (y) 8.000% senior secured notes due November 15, 2026 (collectively, the “Restricted Senior Secured Noteholders”) to continue confidential discussions and negotiations concerning a potential restructuring transaction under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court,” and such transaction, the “Restructuring Transaction”). Pursuant to the Confidentiality Agreements, the Company provided such parties under the Confidentiality Agreements with confidential information and agreed that if certain conditions were met, the Company would publicly disclose the Cleansing Materials.

 

As previously disclosed, on January 17, 2024, the Bankruptcy Court entered an order approving the Company’s sale of the Elixir business to MedImpact Healthcare Systems, Inc. (“MedImpact” and the sale, the “Elixir Sale”).  In connection with the closing of the Elixir Sale, which occurred on February 1, 2024, MedImpact issued to the Company certain term loans in the aggregate principal amount of $567.382 million under that certain Second Amended and Restated Credit Agreement, dated as of November 7, 2023, by and among MI OpCo Holdings, Inc., as borrower thereunder, MI OpCo H2, LLC, as “Holdings” thereunder, the other guarantors from time to time party thereto, Debtor Rite Aid Corporation, as a lender, each other lender from time to time party thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer (each as defined therein) (the “MedImpact Term Loan”).

 

On July 3, 2024, the Company filed a motion with the Bankruptcy Court seeking approval of the sale of certain of the Company’s interests in the MedImpact Term Loan to certain third-party purchasers and Restricted Senior Secured Noteholders (“MedImpact Term Loan Sale”).  On July 11, 2024, the Bankruptcy Court entered an order approving the MedImpact Term Loan Sale.  On July 26, 2024, the Company distributed the proceeds of certain of the Company’s interests in the MedImpact Term Loan to the Restricted Senior Secured Noteholders and certain of the Company’s lenders under its debtor-in-possession financing in accordance with the terms and conditions agreed pursuant to the Restructuring Transaction and as a result of the foregoing, the Cleansing Materials included as Exhibit 99.1 are being furnished in satisfaction of the Company’s public disclosure obligations under the Confidentiality Agreements.

 

The foregoing description of the MedImpact Term Loan is not complete and is qualified in its entirety by reference to the MedImpact Term Loan, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.

 

 

 

 

Cautionary Statement Regarding Forward-Looking Statements

 

Certain matters discussed in this current report on Form 8-K constitute forward-looking statements within the meaning of the federal securities laws. All statements and any underlying assumptions contained in this notification, other than statements of historical fact, are forward-looking statements. These forward-looking statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from expectations include, but are not limited to, the Company’s ability to improve its liquidity and long-term capital structure and to address its debt service obligations through the Restructuring Transaction; the Company’s ability to make the required payments under the agreements governing its current debt obligations; the Company’s ability to maintain relationships with suppliers, customers, employees and other third parties as a result of the Restructuring Transaction; the effects of the Restructuring Transaction and the interests of various constituents in connection therewith; risks and uncertainties associated with the Restructuring Transaction, including the Company’s ability to successfully consummate the Restructuring Transaction; and the nature, cost, impact and outcome of the Company’s pending and future litigation, other legal or regulatory proceedings, or governmental investigations and actions, including those related to opioids, “usual and customary” pricing, government payer programs, business practices, or other matters; and the risks discussed in detail in Item 1A. Risk Factors of the Company’s annual report on Form 10-K for the fiscal year ended March 4, 2023, in the Company’s subsequent quarterly reports on Form 10-Q filed with the Securities Exchange Commission (“SEC”), and in other documents that we file or furnish with the SEC. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Description
10.1*+		MedImpact Credit Agreement.
99.1		Cleansing Material.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

* In accordance with Item 601(a)(5) of Regulation S-K, certain schedules or similar attachments to this exhibit have been omitted from this filing.

 

+ Previously filed with the U.S. Securities Exchange Commission on December 27, 2023 as Exhibit 10.1 to the Company’s Current Report on Form 8-K.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

 

Date: July 29, 2024

 

	RITE AID CORPORATION
	By:	/s/ Matthew C. Schroeder
		Name: Matthew C. Schroeder
		Title:   Executive Vice President and Chief Financial Officer

 

 

 

Exhibit 99.1

Privileged & Confidential | Prepared at the Request of Counsel | Highly Preliminary and Subject to Material Revision | Subject to FRE 408 July 2024 Prepared at the Request of Counsel | Highly Preliminary and Subject to Material Revision | Subject to FRE 408 Discussion Materials

2 Prepared at the Request of Counsel | Highly Preliminary and Subject to Material Revision | Subject to FRE 408 Emergence Date Availability Sensitivity $s in MM Excess Avail @ Exit ($s MM) W/E 8/3 W/E 8/31 Comments Prior Availability $ 486 $ 482 Dated 7/12 (-) Borrowing Base - Actuals (4) (6) (-) Borrowing Base Update - Timing (9) (9) 100% timing impact of sale BB recognition (-) Transaction Expenses (2) (3) Latest est. on total shared transaction costs (inv. counts, data transfers, mailers) (-) Misc. Cash (3) (3) Trued-up Pcard acct. balance (+) Net Past-Due Rebates 2 2 One counterparty settled (+/-) All Other 1 1 Pro Forma Expected Availability $ 472 $ 465 Total ∆ $ (15) $ (17)

Disclaimers

4 Prepared at the Request of Counsel | Highly Preliminary and Subject to Material Revision | Subject to FRE 408 Disclaimer These discussion materials (the “Discussion Materials”) were prepared by Management with the assistance of Alvarez & Marsal North America LLC (“A&M”), Guggenheim Securities, LLC (“Guggenheim”), and Kirkland & Ellis LLP (“K&E”, and together with Guggenheim and A&M, “the Advisors”, "we" or "us") for informational purposes only and exclusively for the sole benefit and internal review of Rite Aid Corporation (“the Company”). Neither the Discussion Materials nor any of their content may be copied, reproduced, disseminated, quoted or referred to in any presentation, agreement or document with or without attribution to the Advisors, at any time or in any manner other than for the internal use of the Company, without the express, prior written consent of the Advisors. No person other than the Company (a “Third Party”) is authorized to have access to the Discussion Materials, unless the Third Party has received the express, prior written consent of the Advisors and has signed and returned to the Advisors an acceptable Non-Reliance Letter. The Discussion Materials are not intended to be reviewed by anyone other than the Company, or induce action or forbearance by anyone. Accordingly, no liability or responsibility whatsoever is accepted by the Advisors and their employees, partners or affiliates for any loss whatsoever arising from or in connection with any unauthorized use of the Discussion Materials. The Advisors undertake no obligation to update or provide any revisions to the Discussion Materials to reflect events, circumstances or changes that occur after the date the Discussion Materials were prepared, even in the event that information included in, or assumptions underlying, the Discussion Materials become or are shown to be incorrect. The Discussion Materials do not purport to contain all the information that may be required to evaluate all of the factors which would be relevant. Furthermore, the Discussion Materials are incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by the Advisors which forms part of the Discussion Materials. Any analyses contained herein (as well as any suggestions or recommendations contained herein and / or derived from the content of the Discussion Materials) are preliminary in nature and subject to reconsideration and modification. The Discussion Materials shall in no way be considered a solicitation or recommendation to any party to participate in or support a transaction or any other particular course of action or to purchase, sell or offer to purchase or sell securities or other instruments. The Advisors make no representation or guarantee that any alternative in general or any action item in particular is the best course of action for the Company. Further the Advisors assume no responsibility for the selection and approval of any strategic, financial or operational alternative presented to the Company. The information contained in the Discussion Materials is based upon financial and other data provided to the Advisors by the Company. In preparing the Discussion Materials, the Advisors have assumed, without any independent verification, the accuracy and completeness of all information available from public sources, from the Company or which was otherwise provided to the Advisors. The Advisors are not responsible whatsoever for any misrepresentations made to the Advisors during the course of their review. The Advisors have not subjected the information contained herein to an examination in accordance with generally accepted auditing or attestation standards. Accordingly, the Advisors cannot and do not express an opinion on the financial information and do not assume any responsibility for the accuracy or correctness of the projected financial or other data, information and assessments upon which the enclosed document is presented. The Discussion Materials include analyses of the Company’s financial projections and forward-looking statements with respect to its anticipated future performance. These projections may be based, in whole or in part, on projections or forecasts of future events. A forecast, by its nature, is speculative and includes estimates and assumptions which may prove to be wrong. Actual results may, and frequently do, differ from those projected or forecasted. Those differences may be material. No representations or warranties are made as to the accuracy or reasonableness of such assumptions, the projections or forward-looking statements. Items which could impact actual results include, but are not limited to, unforeseen micro or macro economic developments, business or industry events, personnel changes, casualty losses, the inability of the Company to implement plans or programs and other risk factors. The projections are also based upon numerous assumptions, including business, economic and other market conditions. Many of these assumptions are beyond the control of the Company and are inherently subject to substantial uncertainty. Such assumptions involve significant elements of subjective judgment, which may or may not prove to be accurate, and consequently, no assurances can be made regarding the analyses or conclusions derived from financial information based upon such assumptions. For the foregoing reasons, the Company should not place undue reliance on the information contained in the Discussion Materials. The limiting conditions, assumptions and disclaimers set forth herein are an integral part of these materials, must be reviewed in conjunction herewith, and may not be modified or distributed separately.

5 Prepared at the Request of Counsel | Highly Preliminary and Subject to Material Revision | Subject to FRE 408 This presentation (together with any related oral commentary and any supplemental materials or updates, this “Presentation” and, together with any associated information and materials provided heretofore, herewith or hereafter, whether communicated in written, electronic or oral form, collectively, the “Materials”) has been prepared by or on behalf of Rite Aid Corporation (collectively, together with its subsidiaries and controlled affiliates, the “Company”) solely to provide each recipient hereof (each, a “Recipient”) with certain information, in summary form only, relating to the Company’s proposed transaction(s) described herein (each, a “Transaction”). The summary set forth herein does not purport to be a complete description of the matters described herein. This Presentation may be furnished to the Recipient directly by the Company or, on the Company’s behalf, through any one of the Company’s legal, financial or other professional advisors (collectively, the “Advisors”). Each Advisor is appointed only to advise the Company in accordance with its applicable terms of engagement. This Presentation does not constitute an offer to sell or solicitation of an offer to purchase any securities, nor shall there be any such offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorized or would be unlawful. The information contained in this Presentation is not, and under no circumstances is to be construed as, a prospectus, a public offering or an offering memorandum as defined under applicable securities legislation. Each Recipient must comply with all legal requirements in each jurisdiction in which it purchases, offers or sells any securities or possesses this Presentation, and must independently obtain any consent, approval or permission required by it in connection with any potential transaction. None of the Company or any of the Advisors makes any representation or warranty regarding, nor shall any of the foregoing persons or entities have any responsibility for, the legality of an investment or other participation in any Transaction under any investment, securities or similar laws. Recipients of this information who are considering any form of Transaction with the Company should not rely on the information contained herein as a definitive basis for any decision regarding any Transaction. Any statement herein regarding tax matters was written in connection with the promotion or marketing of the matters described herein and was not intended or written to be used, and cannot be used by any person, for the purposes of avoiding tax-related penalties under federal, state or local tax law. Receipt of this Presentation does not create, nor is it intended to create, a contract or commitment between the Company and the Recipient or any other party with respect to consummation of any Transaction. This Presentation may not be relied upon by any party as the basis for any such contract or commitment. Consummation of any Transaction is subject to, among other things, the execution of definitive documentation in writing. Until the execution of definitive documentation for any Transaction, the Company reserves the right, in its sole discretion, to modify or amend the terms of the Transaction, to approve or disapprove any prospective participant or other counterpart, to accept or reject, in whole or in part, any request by any party to participate as investor, participant or otherwise in the Transaction, to allocate to any party a smaller portion of or participation in the Transaction than the amount sought by such party and to withdraw from any further discussions, negotiations or transaction. None of the Company or the Advisors will have any liability or obligation whatsoever to any prospective transaction counterparty in the event of any of the foregoing. Any terms or other conditions in the Materials relating to any proposed Transaction are non-binding and are being presented solely for discussion and settlement purposes. The Materials are entitled to protection from any use or disclosure pursuant to Federal Rule of Evidence 408 and any other rule of similar import. The Materials are being furnished solely for the purpose of assisting each Recipient in determining whether it wishes to proceed with any further investigation of the Company and any Transaction. The Materials are not intended to form the basis of any investment decision and do not attempt to present all the information that such Recipient may consider material or desirable in making its investment decision. Each Recipient of the Materials should take such steps as it deems necessary to assure that it has the information it considers material or desirable in making its decision to participate in any Transaction and should perform its own independent investigation and analysis of the Transaction and the Company. By accepting delivery of this Presentation, each Recipient represents that it is sophisticated and capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies involving a security or securities, as well as with regard to the economic risks and merits of any Transaction, and of assessing the suitability of such investments for its purposes Disclaimer (cont.)

6 Prepared at the Request of Counsel | Highly Preliminary and Subject to Material Revision | Subject to FRE 408 Disclaimer (cont.) The information used to prepare this Presentation and any other Materials is based upon industry, business, financial, legal, regulatory, tax, accounting, actuarial and other information (including, without limitation, financial projections, other estimates and other forward-looking information) furnished by the Company or information otherwise obtained from public sources, data suppliers and other third parties. None of the Advisors or any of their respective subsidiaries, affiliates, directors, officers, employees, representatives, consultants, legal counsel and/or agents has independently verified the accuracy and/or completeness of this Presentation and any other Materials, including without limitation any estimates or financial forecasts or projections or other forward-looking statements (or any assumptions underlying them, the Company’s future operations or the amount of any future income or loss). None of the Company, the Advisors or any of their respective subsidiaries, affiliates, directors, officers, employees, representatives, consultants, legal counsel and/or agents (i) makes any representation, guaranty or warranty (express or implied) as to the accuracy or completeness of this Presentation or any other Materials, including without limitation any estimates or financial forecasts or projections or other forward-looking statements (or any assumptions underlying them, the Company’s future operations or the amount of any future income or loss); or (ii) will have any responsibility, obligation or liability to any Recipient or its representatives relating to or arising from any information contained in, or for any omissions from, this Presentation or any other Materials or any other written or oral communication transmitted to any Recipient in the course of its investigation and evaluation of the Company and any Transaction. This Presentation is as of the date hereof. Neither the delivery of this Presentation nor any eventual consummation of any Transaction shall, under any circumstances, imply that the information contained herein is correct as of any future date or that there has been no change in the affairs of the Company after the date hereof. Nothing contained herein is, or should be relied upon as, a promise or representation as to future performance. None of the Company or any Advisor undertakes any obligation to update, correct or otherwise revise this Presentation or any other Materials. This Information shall not be deemed an indication of the state of affairs of the Company nor shall it constitute an indication that there has been no change in the business or affairs of the Company since the date hereof. By accepting delivery of this Presentation, each Recipient acknowledges and agrees (i) to undertake and rely on its own independent investigation and analysis and consult with its own attorneys, accountants and other professional advisors regarding the Company and the merits and risks of participating in any potential Transaction, including all related legal, investment, accounting, tax and other matters; and (ii) that none of the Advisors or any of their respective subsidiaries, affiliates, directors, officers, employees, representatives, consultants, legal counsel and/or agents is acting as a financial advisor, private placement agent, arranger or in any other advisory capacity for the benefit of such Recipient with respect to any potential Transaction or otherwise owes such Recipient any duty of loyalty or care (whether in contract, in tort or otherwise) with respect to this Presentation, any other Materials or any potential Transaction (and each Advisor, on behalf of itself and its affiliates and related parties, expressly disclaims any such advisory, fiduciary or similar relationship or other duty).

Cover	Jul. 29, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 29, 2024
Entity File Number	1-5742
Entity Registrant Name	Rite Aid Corporation
Entity Central Index Key	0000084129
Entity Tax Identification Number	23-1614034
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	P.O. Box 3165
Entity Address, City or Town	Harrisburg
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	17105
City Area Code	717
Local Phone Number	761-2633
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false

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