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SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2013
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS
On August 1, 2013, the Company acquired all of the outstanding membership interests of WorkflowOne, LLC (WorkflowOne) for an aggregate purchase price of one dollar. In connection with the acquisition, the Company also assumed $210,000 of WorkflowOne's existing debt under two secured credit facilities, as described below, and issued warrants that will be convertible into 2,654,952 shares of the Company's Common Stock, subject to shareholder approval. The warrants are exercisable beginning on the first business day after the date of obtaining shareholder approval and ending three months after the date of obtaining such approval. The per share exercise price of each warrant is $0.00001.
WorkflowOne provides printing, document management, distribution and marketing services to a large customer base and will initially operate as a subsidiary of Standard Register. The acquisition advances the Company's revenue position, enhances its product and solutions portfolio, broadens its customer base, improves its cost structure, and provides greater financial flexibility and stability. We expect to achieve approximately $40,000 in annual savings when the integration of the two companies is complete. We also expect to incur future material restructuring charges in conjunction with the integration; however our plan has not yet been finalized.
Debt assumed under the First Lien Credit Facility was approximately $124,000 and is secured by substantially all of the assets of the combined companies. Quarterly payments of $2,500 are due beginning September 2014 with additional mandatory payments due based on a percentage of excess cash flow and certain other events. The full unpaid principal amount is due on August 1, 2018. The debt will bear interest at an adjusted LIBOR plus 7.00%.
Debt assumed under the Second Lien Credit Facility was approximately $86,000 and is secured by substantially all of the assets of the combined companies. Upon the termination of the First Lien Credit Facility, mandatory payments are due based on a percentage of excess cash flow and certain other events. The full unpaid principal amount is due on February 1, 2020. The debt will bear interest at an adjusted LIBOR plus 8.65%.
In addition, the Company issued $10,000 of non-interest bearing “Tranche B Second Lien Term Loans.” The final working capital amount will be calculated within 40 business days of August 1, 2013 and will determine whether this debt will be cancelled for no consideration, funded with cash placed in escrow by the seller, or a combination of the two options.
Due to the timing of the acquisition, the initial accounting for the acquisition is not yet complete and as a result, certain required disclosures cannot yet be made.