The US Bankruptcy Court gave an order to Allied Healthcare Products, Inc. to obtain DIP financing on a final basis on June 1, 2023. As per the order, the debtor has been authorized to obtain credit facility in the aggregate amount of $4 million from Sterling Commercial Credit, LLC. The DIP loan would either carry an interest rate of 6.5% p.a. above the Prime Rate, adjusted as of the date of any change in the Prime Rate, but in no event less than 14% p.a., along with an additional 20% p.a. interest in the event of default.

As per the terms of the DIP agreement, the loan carries a commitment fee of $0.35 million. The DIP facility would mature either on the 120th day after the Petition Date, or on the effective date of the plan or on the date of consummation of the sale of substantially all assets, or the date upon which the Bankruptcy Case shall be converted to a case under chapter 7 of the Bankruptcy Code or dismissed whichever is earlier. Adequate protection would be provided to the DIP lenders in the form of super-priority administrative expense claims which is subject to a carve-out which is paid towards unpaid professional fees / administrative expenses and priority lien upon and security interest in the debtor?s collateral.

The Court had granted the debtor an interim approval on May 9, 2023.