File Pursuant to Rule 424(b)(3)
Registration No. 333-236682

Prospectus

A. M. Castle & Co.

OFFER TO EXCHANGE AND CONSENT SOLICITATION
Shares of Common Stock and 3.00%/5.00% Convertible Senior PIK Toggle Notes due 2024
for
Any and All 5.00%/7.00% Convertible Senior PIK Toggle Notes due 2022
(CUSIP No. 148411AK7)

THE EXCHANGE OFFER AND THE CONSENT SOLICITATION (AS DEFINED BELOW) WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MARCH 26, 2020, UNLESS EXTENDED OR EARLIER TERMINATED BY US (SUCH DATE AND TIME, AS THE SAME MAY BE EXTENDED, THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE (SUCH DATE AND TIME, AS THE SAME MAY BE EXTENDED, THE “WITHDRAWAL DEADLINE”).

In accordance with the terms and subject to the conditions set forth in this prospectus and related letter of transmittal, as each may be amended from time to time, A. M. Castle & Co. (the “Issuer”) is offering to exchange (the “Exchange Offer”) shares of its common stock and its 3.00%/5.00% Convertible Senior PIK Toggle Notes due 2024 (the “new notes”) for any and all outstanding 5.00%/7.00% Convertible Senior PIK Toggle Notes due 2022 (the “old notes”). See the “Summary Offering Table.” Accrued and unpaid interest on the old notes will be exchanged into new notes and common stock at the Exchange Rate (as defined below) on the date on which the Exchange Offer is completed. (the “Closing Date”).

The new notes will bear interest at a rate of 3.00% per annum if paid in cash or 5.00% if paid in kind per annum, payable quarterly. The new notes will mature on August 31, 2024 and will be convertible, at the option of the holders, into shares of our common stock. See “Description of the New Notes.”

The new notes will be guaranteed on a senior basis by all current domestic restricted subsidiaries, certain current foreign subsidiaries, all future domestic subsidiaries and all future foreign subsidiaries to the extent such foreign subsidiaries have guaranteed other indebtedness (in each case, other than “Immaterial Subsidiaries” and those designated as “Unrestricted Subsidiaries”) of the Issuer (the “Guarantors”). The restrictive covenants in the indenture governing the new notes will be substantially similar to the covenants in the indenture governing the old notes. For a more detailed description of the new notes, see “Summary Description of the New Notes” and “Description of the New Notes.”

Concurrently with this Exchange Offer, we are also soliciting consents (the “Consent Solicitation”) from holders for certain amendments to the indenture governing the old notes to eliminate or amend substantially all of the restrictive covenants, release all collateral securing the Issuer’s obligations under the indenture governing the old notes (the “Existing Indenture”), and modify certain of the events of default and various other provisions, contained in the Existing Indenture (collectively, the “Proposed Amendments”). We refer to the Exchange Offer and the Consent Solicitation collectively in this prospectus as the Exchange Offer.

It is a condition to the consummation of this Exchange Offer, among other things, that (i) the aggregate principal amount of old notes that are not tendered and exchanged shall not exceed $3.0 million; (ii) PNC Bank, National Association (“PNC”) shall have approved or consented to the Exchange, to the extent required, and to the amendments to the existing intercreditor agreement with the Trustee (as defined below) of the old notes and shall have entered into a New Intercreditor Agreement (as defined below) with the Trustee of the new notes; (iii) holders of more than two-thirds of the aggregate principal amount of the old notes (noteholders representing such percentage being the “Required Consenting Noteholders”) and the Trustee shall have consented to and/or entered into, as applicable, documentation (including one or more supplemental indentures) effecting the deletion of the covenants in the Existing Indenture and release of all collateral under the Existing Indenture; (iv) all Definitive Documentation (as described in this prospectus) shall have been executed and remain in full force and effect, which Definitive Documentation shall be in form and substance acceptable to the Issuer and the Required Consenting Noteholders; (v) all requisite filings with the Securities and Exchange Commission, OTC Markets Group, Inc., and other governmental authorities and third parties shall have become effective, and all governmental authorities and third parties shall have approved or consented to the Exchange Offer, to the extent required and (vi) the shares of common stock to be issued in the Exchange Offer shall have been duly authorized and will be validly issued, fully paid and non-assessable.

We have entered into support agreements (the “Support Agreements”) with holders of the old notes who, in the aggregate, hold in excess of 96% of the outstanding principal amount of the old notes, who have agreed, among other things, to tender their old notes in the Exchange Offer and to consent to the Proposed Amendments, subject to certain conditions. See “Definitive Documentation.”

Our common stock is presently quoted on the OTCQX Best Market tier of the OTC Markets Group, Inc. (“OTCQX”) under the symbol “CTAM”. There is no market for our new notes, and we do not intend to list the new notes on any national or regional securities exchange.

You should consider the Risk Factors beginning on page 12 of this prospectus before you decide whether to participate in the Exchange Offer.

In making a decision in connection with the Exchange Offer, you must rely on your own examination of our business and the terms of the Exchange Offer, including the merits and risks involved. You should not construe the contents of this prospectus as providing any legal, business, financial or tax advice. You should consult with your own legal, business, financial and tax advisors with respect to any such matters concerning this prospectus and the Exchange Offer contemplated hereby.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES BEING OFFERED IN EXCHANGE FOR OUR OLD NOTES OR THIS TRANSACTION, PASSED UPON THE MERITS OR FAIRNESS OF THIS TRANSACTION OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is March 25, 2020.

SUMMARY OFFERING TABLE

This summary offering table indicates the new notes and common stock to be offered in the Exchange Offer per $1,000 principal amount of old notes validly tendered and not withdrawn. For the purposes of this prospectus, the term “exchange consideration” refers to the new notes and shares of common stock being offered to holders of the old notes.

The new notes will be in denominations of $1,000 and integral multiples of $1.00 in excess thereof. Only whole principal amounts or numbers of shares of common stock will be issued with the principal amounts or numbers of shares of common stock to be issued to be adjusted by rounding up or down to the nearest $1.00 or number of shares of common stock. A half amount or number of shares of common stock will be rounded up.

TABLE OF CONTENTS

NONE OF THE ISSUER, ITS SUBSIDIARIES, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR THE EXCHANGE AGENT HAS MADE ANY RECOMMENDATION AS TO WHETHER OR NOT HOLDERS SHOULD TENDER THEIR OLD NOTES FOR EXCHANGE PURSUANT TO THE EXCHANGE OFFER. YOU MUST MAKE YOUR OWN DECISION WHETHER TO EXCHANGE ANY OLD NOTES PURSUANT TO THE EXCHANGE OFFER, AND, IF YOU WISH TO EXCHANGE OLD NOTES, THE PRINCIPAL AMOUNT OF OLD NOTES TO TENDER.

This prospectus does not constitute an offer to participate in the Exchange Offer to any person in any jurisdiction where it is unlawful to make such an offer or solicitations. The Exchange Offer is being made on the basis of this prospectus and are subject to the terms described herein and those that may be set forth in any amendment or supplement thereto. Any decision to participate in the Exchange Offer should be based on the information contained in this prospectus or any amendment or supplement thereto. In making an investment decision or decisions, prospective investors must rely on their own examination of us and the terms of the Exchange Offer and the securities being offered and the terms of the amendments and mutual releases being sought, including the merits and risks involved. Prospective investors should not construe anything in this prospectus as legal, business or tax advice. Each prospective investor should consult its advisors as needed to make its investment decision and to determine whether it is legally permitted to participate in the Exchange Offer under applicable legal investment or similar laws or regulations.

Each prospective investor must comply with all applicable laws and regulations in force in any jurisdiction in which it participates in the Exchange Offer or possesses or distributes this prospectus and must obtain any consent, approval or permission required by it for participation in the Exchange Offer under the laws and regulations in force in any jurisdiction to which it is subject, and neither we nor any of our respective representatives shall have any responsibility therefor.

No action with respect to the offer of exchange consideration has been or will be taken in any jurisdiction (except the United States) that would permit a public offering of the offered securities, or the possession, circulation or distribution of this prospectus or any material relating to the Company or the offered securities where action for that purpose is required. Accordingly, the offered securities may not be offered, sold or exchanged, directly or indirectly, and neither this prospectus nor any other offering material or advertisement in connection with the Exchange Offer may be distributed or published, in or from any such jurisdiction, except in compliance with any applicable rules or regulations of any such country or jurisdiction.

This prospectus contains summaries believed to be accurate with respect to certain documents, but reference is made to the actual documents for complete information. All of those summaries are qualified in their entirety by this reference. Copies of documents referred to herein will be made available to prospective investors upon request to us at the address and telephone number set forth in “Prospectus Summary—Corporate Information.”

This prospectus and the related letter of transmittal contain important information that should be read before any decision is made with respect to participating in the Exchange Offer.

The delivery of this prospectus shall not under any circumstances create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that there has been no change in the information set forth herein or in any attachments hereto or in the affairs of the Company or affiliates since the date hereof.

No one has been authorized to give any information or to make any representations with respect to the matters described in this prospectus and the related letter of transmittal, other than those contained in this prospectus and the related letter of transmittal. If given or made, such information or representation may not be relied upon as having been authorized by us.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information provided and statements contained in this prospectus that are not purely historical are forward-looking statements. Such forward-looking statements only speak as of the date of this prospectus and the Company assumes no obligation to update the information included in this prospectus. Such forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy, and the cost savings and other benefits that we expect to achieve from our facility closures and organizational changes. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “predict,” “plan,” “should,” or similar expressions. These statements are not guarantees of performance or results, and they involve risks, uncertainties, and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors include the impact of volatility of metals prices, the cyclical and seasonal aspects of our business, our ability to effectively manage inventory levels, and the impact of our substantial level of indebtedness, as well as those risk factors contained herein in “Risk Factors”. All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future, to reflect the occurrence of unanticipated events or for any other reason.

IMPORTANT INFORMATION

Old notes tendered and not validly withdrawn prior to the Withdrawal Deadline may not be withdrawn at any time after the Withdrawal Deadline, which is 5:00 p.m., New York City time, on the Expiration Date.

Old notes tendered for exchange, along with letters of transmittal and any other required documents, should be directed to the Exchange Agent. Any requests for assistance in connection with the Exchange Offer or for additional copies of this prospectus or related materials should be directed to the Exchange Agent. Contact information for the Exchange Agent is set forth on the back cover of this prospectus and under “General Terms of the Exchange Offer and Consent Solicitation—Exchange Agent.” None of the Company, its subsidiaries, their respective boards of directors and the Exchange Agent has made any recommendation as to whether or not holders should tender their old notes for exchange pursuant to the Exchange Offer.

Wilmington Savings Fund Society, FSB is acting as the Exchange Agent for the Exchange Offer.

Subject to the terms and conditions set forth in the Exchange Offer, the exchange consideration to which an exchanging holder is entitled pursuant to the Exchange Offer will be paid on the settlement date, which is the date promptly following the applicable expiration date of the Exchange Offer, subject to satisfaction or waiver of all conditions precedent to the Exchange Offer. Under no circumstances will any interest be payable because of any delay in the transmission of the exchange consideration to holders by the Exchange Agent.

Notwithstanding any other provision of the Exchange Offer, our obligation to pay the exchange consideration for old notes validly tendered for exchange and not validly withdrawn pursuant to the Exchange Offer is subject to, and conditioned upon, the satisfaction or waiver of the conditions described under “General Terms of the Exchange Offer—Conditions to the Exchange Offer and Consent Solicitation.”

Subject to applicable securities laws and the terms of the Exchange Offer, we reserve the right:

If the Exchange Offer is withdrawn or otherwise not completed, the exchange consideration will not be paid or become payable to holders of the old notes who have validly tendered their old notes for exchange in connection with the Exchange Offer, and the old notes tendered for exchange pursuant to the Exchange Offer will be promptly returned to the tendering holders.

Only registered holders of old notes are entitled to tender old notes for exchange and give consents. Beneficial owners of old notes that are held of record by a broker, bank or other nominee or custodian must instruct such nominee or custodian to tender the old notes for exchange on the beneficial owner’s behalf. A letter of instructions is included in the materials provided along with this prospectus, which may be used by a beneficial owner in this process to affect the tender of old notes for exchange. See “General Terms of the Exchange Offer and Consent Solicitation—Procedures for Tendering Old Notes—General.”

Exchanging holders will not be obligated to pay brokerage fees or commissions to the Exchange Agent or us. If a broker, bank or other nominee or custodian tenders old notes on behalf of a tendering holder, such broker, bank or other nominee or custodian may charge a fee for doing so. Exchanging holders who own old notes through a broker, bank or other nominee or custodian should consult their broker, bank or other nominee or custodian to determine whether any fees or charges will apply.

QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER

The following are some questions and answers regarding the Exchange Offer and Consent Solicitation. It does not contain all of the information that may be important to you. You should carefully read this prospectus to fully understand the terms of the Exchange Offer and Consent Solicitation, as well as the other considerations that are important to you in making your investment decision. You should pay special attention to the information provided under the captions entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”

A. M. Castle & Co., a Maryland corporation and the issuer of the old notes, is making the Exchange Offer. The mailing address of our principal executive offices is 1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523 and our telephone number is (847) 455-7111. Our common stock is presently quoted on the OTCQX under the symbol “CTAM”. See “General Terms of the Exchange Offer and Consent Solicitation.”

We are making the Exchange Offer in order to reduce leverage on our balance sheet and increase our ability to invest in sustainable, long-term growth. See “General Terms of the Exchange Offer and Consent Solicitation—Exchange Offer.”

We have entered into Support Agreements with holders of the old notes who, in the aggregate, hold in excess of 96% of the outstanding principal amount of the old notes. Under the terms of these Support Agreements, such holders have agreed, among other things, to tender all of their old notes in the Exchange Offer and to consent to the Proposed Amendments, subject to certain conditions. See “Proposed Amendments” and “Definitive Documentation.”

The Exchange Offer will expire at 5:00 p.m., New York City time, on March 26, 2020 (unless the Exchange Offer is extended). See “General Terms of the Exchange Offer and Consent Solicitation.”

Yes, we can extend the Exchange Offer. However, the Support Agreements will terminate if the Exchange Offer is not consummated by April 30, 2020. See “General Terms of the Exchange Offer and Consent Solicitation—Extension, Termination or Amendment.”

We are offering to exchange, for new notes and shares of common stock, upon the terms and subject to the conditions described in this prospectus, any and all outstanding old notes that are validly tendered and not validly withdrawn, as permitted under the terms of the Exchange Offer, on or prior to the Expiration Date. Our acceptance of validly tendered old notes and the closing of the Exchange Offer is subject to the conditions described under “General Terms of the Exchange Offer and Consent Solicitation—Conditions of the Exchange Offer and Consent Solicitation.” As of February 25, 2020, $193.7 million in aggregate principal amount of old notes was outstanding, not including accrued and unpaid interest.

The old notes were issued pursuant to the Existing Indenture. The old notes mature on August 31, 2022 and bear interest at a rate of 5.00%, except that the Company may, in certain circumstances, pay at the rate of 7.00% in kind, payable on March 31, June 30, September 30 and December 31 of each year. On August 31, 2017, we entered into a registration rights agreement with certain holders of our common stock and old notes whereby we agreed to file a shelf registration statement with the SEC, covering resales of the shares of common stock, including shares of common stock issuable upon conversion of the old notes. We filed such shelf registration statement with the SEC and the registration statement was declared effective on December 14, 2017. The terms of the old notes as currently in effect are those stated in the Existing Indenture, and holders are referred to the Existing Indenture, filed with the SEC on September 6, 2017 as Exhibit 10.2 to our Current Report on Form 8-K, for a complete description of the terms governing the old notes.

If you validly tender and we accept your old notes in the Exchange Offer, then, subject to the terms and conditions of the Exchange Offer, you will receive, for each $1,000 in principal amount of your old notes exchanged, exchange consideration consisting of: (i) $491.8619 principal amount of new notes and (ii) 363.2585 shares of common stock of the Issuer. Accrued and unpaid interest on the old notes will be will be exchanged into new notes and common stock at the Exchange Rate on the date on which the Exchange Offer is completed.

The exchange consideration will be in full satisfaction of the principal amount of the old notes that are tendered and accepted in the Exchange Offer, and accrued and unpaid interest will be exchanged into new notes and common stock at the Exchange Rate on the date on which the Exchange Offer is completed. The new notes will be in denominations of $1,000 and integral multiples of $1.00 in excess thereof. Only whole principal amounts or numbers of shares of common stock will be issued with the principal amounts or numbers of shares of common stock to be issued to be adjusted by rounding up or down to the nearest $1.00 or number of shares of common stock. A half amount or number of shares of common stock will be rounded up.

Assuming all $193.7 million in outstanding old notes outstanding as of February 25, 2020 are validly tendered and accepted in the Exchange Offer and the Exchange is consummated on March 30, 2020, we will issue approximately 71.6 million shares of common stock pursuant to the Exchange Offer, which would represent in the aggregate approximately 95% of our outstanding common stock, immediately following the Exchange Offer (excluding shares issuable with respect to accrued and unpaid interest on the old notes). As a result, holders who participate in the Exchange Offer could, collectively, influence or control all matters affecting us, including:

Under the stockholders’ agreement (the “Stockholders Agreement”), certain stockholders shall have the right to designate nominees to comprise a majority of our Board of Directors.

Assuming all $193.7 million in old notes outstanding as of February 25, 2020 are validly tendered and accepted in the Exchange Offer and the Exchange is consummated on March 30, 2020, we will issue approximately $97 million aggregate principal amount of new notes.

All holders of the old notes may participate in the Exchange Offer.

Yes. The Exchange Offer is conditioned upon the aggregate principal amount of old notes that are not tendered and exchanged not exceeding $3.0 million.

Yes. The Exchange Offer is conditioned on the closing conditions described under “General Terms of the Exchange Offer and Consent Solicitation—Conditions of the Exchange Offer and Consent Solicitation.” We will not be required, but we reserve the right, to accept for exchange any old notes tendered (or, alternatively, we may terminate the Exchange Offer) if any of the conditions of the Exchange Offer as described under “General Terms of the Exchange Offer and Consent Solicitation—Conditions of the Exchange Offer and Consent Solicitation” remain unsatisfied. Among the conditions precedent to the consummation of the Exchange Offer is that the aggregate principal amount of old notes that are not tendered and exchanged does not exceed

$3.0 million, the Required Consenting Noteholders and the Trustee shall have consented to and/or entered into, as applicable, documentation (including one or more supplemental indentures) effecting the deletion of the covenants in the Existing Indenture and release of all collateral under the Existing Indenture, and all Definitive Documentation for the Exchange Offer shall have been executed and remain in full force and effect, which Definitive Documentation shall be in form and substance acceptable to the Company and the Required Consenting Noteholders.

Assuming completion of the Exchange Offer and the tender of all outstanding old notes as of December 31, 2019, we will have approximately 75.3 million shares of common stock outstanding, out of 200.0 million shares authorized. Approximately 212.9 million shares of common stock will be issuable upon conversion of the new notes. At the completion of the Exchange Offer, we therefore expect that we will not have sufficient authorized shares of common stock to issue upon conversion of the new notes. If the Exchange Offer is completed, we intend to call a special meeting of stockholders (or consider such matters at our upcoming annual meeting of stockholders) to be held as soon as reasonably practicable for stockholders of record as of a date occurring on or after the Closing Date (which will include holders of old notes who receive shares of common stock in the Exchange Offer) to consider the following matters: (1) a proposal to amend our charter to increase the number of authorized shares of our common stock available for issuance, in order to provide a sufficient number of authorized shares of common stock for the issuance of shares upon conversion of the new notes, (2) a proposal to amend our charter to effect a reverse stock split of shares of our common stock; and (3) any other matters properly brought before the meeting. In lieu of a special or annual meeting of stockholders, the Company may direct the actions set forth in clauses (1) and (2) above to be taken by written consent of the stockholders in accordance with applicable Maryland law and our charter and bylaws. Additionally, in lieu of seeking a vote of stockholders to effect a reverse stock split through an amendment to our charter, the Board of Directors may authorize the Company to undertake a reverse stock split of no greater than ten shares of common stock into one share of common stock, which the Board of Directors may authorize, without any action by stockholders, in accordance with Maryland law. In the indenture governing the new notes, we have agreed to use commercially reasonable efforts to cause items (1) and (2) of the preceding sentence to occur no later than August 31, 2020. Unless and until we obtain stockholder approval of the increase in the number of shares of our common stock authorized and available for issuance upon conversion of the new notes, if the new notes are converted, we may not elect physical settlement or combination settlement of any conversion of new notes if such election would result in the issuance of more than 124.7 million shares of common stock (in the aggregate for the new notes taking into account all prior or concurrent new notes conversions). In such circumstance, we would be required to pay cash to satisfy our settlement obligations. We may not have sufficient funds to satisfy such cash obligations and, in such circumstances, may not be able to arrange the necessary financing on favorable terms or at all.

If you validly tender your old notes and we accept them for exchange, you will have rights as a holder of common stock and as a holder of new notes, and will lose the rights of a holder of old notes, including higher interest rates and conversion rights for a different principal amount. For example, as a holder of new notes (as opposed to a holder of old notes), you would have rights as a creditor with respect to a different principal amount of indebtedness. In addition, as a holder of shares of common stock, your claims would rank below those of a holder of old notes in any bankruptcy proceeding involving the Company.

The old notes are not listed on any securities exchange. To the extent that old notes have traded, prices of the old notes have fluctuated depending, among other things, upon trading volume, the balance between buy and sell orders, prevailing interest rates, our operating results and financial conditions, our business prospects and the market for similar securities.

The new notes and common stock received in the Exchange Offer and the shares of common stock, issuable upon conversion of the new notes will be freely tradable in the United States, unless you are an affiliate of the Company, as that term is defined in the Securities Act, or are subject to other transfer restrictions such as the Stockholders Agreement. The Company’s common stock is presently quoted on the OTCQX under the symbol “CTAM” and we presently do not intend to list on another exchange. We do not intend to list the new notes on any national or regional securities exchange, and therefore no trading market for the new notes will exist upon consummation of the Exchange Offer, and none is likely to develop.

In deciding whether to participate in the Exchange Offer, among other things, you should carefully consider the discussion of the risks and uncertainties relating to the Exchange Offer, our Company and our industry described in the section entitled “Risk Factors,” beginning on page 12 of this prospectus.

If you currently hold old notes and do not tender them, then, following settlement of the Exchange Offer, your old notes will continue to be outstanding according to their terms (as amended pursuant to any amendments resulting from the Consent Solicitation, including substantially reduced covenant protection, event of default protection and release of collateral). Because the new notes will be secured by certain assets of the Company and the Guarantors and the old notes will be unsecured, any old notes left outstanding after the Exchange Offer will effectively be subordinated to the new notes to the extent of the assets securing the new notes. In addition, if we complete the Exchange Offer, the liquidity of any old notes that remain outstanding after settlement of the Exchange Offer may be adversely affected and the value of the old notes may otherwise be affected by the completion of the Exchange Offer. Any old notes not tendered and exchanged under the terms of the Exchange Offer will remain as unsecured debt subordinate to both the First Lien Facility (as defined below) and the new notes.

To tender your old notes, you must deliver the required documents to Wilmington Savings Fund Society, FSB, as Exchange Agent, on or prior to the Expiration Date. The Expiration Date is no later than 5:00 p.m., New York City time, Wednesday March 26, 2020, unless extended as described in this prospectus. See “General Terms of the Exchange Offer and Consent Solicitation—Extension, Termination or Amendment.”

A holder who is a DTC participant should tender its old notes electronically through DTC’s Automatic Tender Offer Program (“ATOP”), subject to the terms and procedures of that system. See “General Terms of the Exchange Offer and Consent Solicitation—Tender of Notes Through ATOP.”

HOLDERS THAT TENDER THROUGH DTC NEED NOT SUBMIT A PHYSICAL LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT IF SUCH HOLDERS COMPLY WITH THE TRANSMITTAL PROCEDURES OF DTC.

A holder whose old notes are held by a broker, dealer, commercial bank, trust company or other nominee must contact that nominee if that holder desires to tender its old notes and instruct that nominee to tender the old notes on the holder’s behalf.

A holder whose old notes are held in certificated form must properly complete and execute the Letter of Transmittal, and deliver the Letter of Transmittal and old notes in certificated form to the Exchange Agent, with any other required documents and the certificates representing the old notes to be tendered in the Exchange Offer.

Yes. You may withdraw old notes previously tendered for exchange at any time before the Expiration Date. The Expiration Date is 5:00 p.m., New York City time, on Wednesday, March 26, 2020, unless extended as described in the Offer Documents. See “General Terms of the Exchange Offer and Consent Solicitation—Withdrawal of Tenders; Revocation of Consents.”

HOLDERS THAT WITHDRAW THROUGH DTC NEED NOT SUBMIT A PHYSICAL NOTICE OF WITHDRAWAL TO THE EXCHANGE AGENT IF SUCH HOLDERS COMPLY WITH THE WITHDRAWAL PROCEDURES OF DTC.

If we decide for any reason not to accept your old notes for exchange, the old notes will be returned to you promptly after the expiration or termination of the Exchange Offer. In the case of old notes tendered by book entry transfer into the Exchange Agent’s account at DTC, any unaccepted old notes will be credited to your account at DTC. See “General Terms of the Exchange Offer and Consent Solicitation—Withdrawal of Tenders; Revocation of Consents.”

No. If you do not deliver a properly completed and duly executed Letter of Transmittal to the Exchange Agent or tender your old notes electronically through DTC’s ATOP before the Expiration Date, your old notes will remain outstanding subject to their terms (as amended pursuant to any amendments resulting from the Consent Solicitation).

No. You may tender all of your old notes, a portion of your old notes or none of your old notes for exchange. If you wish to tender a portion of your old notes for exchange, however, you must tender your old notes in a principal amount of $1,000 or integral multiple of $1.00 in excess thereof. See “General Terms of the Exchange Offer and Consent Solicitation.”

Though it is not free from doubt, we intend to take the position that, the exchange of the old notes for exchange consideration should be treated as part of a recapitalization for United States federal income tax purposes. In such case, you generally should not recognize loss for United States federal income tax purposes as a result of exchanging your old notes for exchange consideration, even if you have otherwise recognized an economic loss with respect to such exchange. If the new notes are characterized as debt, but not as “securities” for United States federal income tax purposes, then you may recognize gain equal to the lesser of (i) the excess, if any, of (A) the sum of (x) the fair market value of any common stock received and (y) the issue price of the new notes received over (B) the United States holder’s adjusted tax basis in the old notes and (ii) the issue price of the new notes received. You should consult with your own tax advisor regarding the tax consequences of exchanging your old notes. See “Material United States Federal Income Tax Considerations.”

Our board of directors, which we refer to as the “Board of Directors” or the “Board,” has approved the making of the Exchange Offer. However, our directors do not make any recommendation as to whether you should tender your old notes pursuant to the Exchange Offer. You should consult your own financial, tax, legal and other advisors and must make your own decision as to whether to tender your old notes.

We will bear all of our fees and expenses incurred in connection with consummating the Exchange Offer and certain expenses of the holders who have entered into the Definitive Documentation with us. See “Definitive Documentation.” No brokerage commissions are payable by the holders to the Exchange Agent or us. If your old notes are held through a broker or other nominee who tenders old notes on your behalf, your broker or other nominee may charge you a fee or commission for doing so. You should consult with your broker or other nominee to determine whether any fees or charges will apply. See “General Terms of the Exchange Offer and Consent Solicitation.”

We have entered into Support Agreements with holders of the old notes who, in the aggregate, hold in excess of 96% of the outstanding principal amount of the old notes. Under the terms of the Support Agreements, such holders have agreed, among other things, to tender all of their old notes in the Exchange Offer and to consent to the Proposed Amendments, subject to certain conditions. See “Definitive Documentation.”

If a holder validly tenders old notes prior to 5:00 p.m., New York City time, on the Expiration Date, such tender will be deemed to constitute the delivery of consent to the Proposed Amendments as a holder of old notes with respect to the tendered old notes. See “Proposed Amendments.”

Requests for assistance in connection with the tender of your old notes pursuant to the Exchange Offer may be directed to the Exchange Agent for the Exchange Offer, Wilmington Savings Fund Society, FSB.

PROSPECTUS SUMMARY

This summary provides an overview of selected information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in our securities. You should carefully read this prospectus and the registration statement of which this prospectus is a part in their entirety before investing in our securities, including the information discussed under “Risk Factors.” Unless otherwise indicated herein, the terms “we,” “our,” “us,” or the “Company” refer to A. M. Castle & Co. and its subsidiaries and the term the “Issuer” refers to A. M. Castle & Co.

Company Overview

A.M. Castle & Co. (the “Company”) is a global distributor of specialty metals and supply chain services, principally serving the producer durable equipment, commercial and military aircraft, heavy equipment, industrial goods, and construction equipment sectors of the global economy. Its customer base includes many Fortune 500 companies as well as thousands of medium- and smaller-sized firms spread across a variety of industries. Particular focus is placed on the aerospace and defense, power generation, mining, heavy industrial equipment, and general manufacturing industries, as well as general engineering applications.

The Company’s corporate headquarters is located in Oak Brook, Illinois. As of December 31, 2019, the Company operates out of 19 service centers located throughout North America (15), Europe (2) and Asia (2). The Company's service centers hold inventory and process and distribute products to both local and export markets.

Industry and Markets

Service centers operate as supply chain intermediaries between primary producers, which deal in bulk quantities in order to achieve economies of scale, and end-users in a variety of industries that require specialized products in significantly smaller quantities and forms. Service centers also manage the differences in lead times that exist in the supply chain. While original equipment manufacturers (“OEM”) and other customers often demand delivery within hours, the lead time required by primary producers can range from several months to over a year for certain specialty metals. Service centers provide value to customers by aggregating purchasing, providing warehousing and distribution services to meet specific customer needs, including demanding delivery times and precise metal specifications, and by providing value-added metals processing services.

The principal markets served by the Company are highly competitive. The Company is focused on two key global end markets, aerospace and industrial. Competition within these markets is based on service, quality, processing capabilities, inventory availability, timely delivery, ability to provide supply chain solutions, and price. The Company competes in a highly fragmented industry. Competition in the various markets in which the Company participates comes from a large number of value-added metals processors and service centers on a local, regional, and global basis, some of which have greater financial resources, and some of which have more established brand names in certain local, regional, and global markets served by the Company.

The Company also competes to a lesser extent with primary metals producers who typically sell to larger customers requiring shipments of large volumes of metal with limited or no value-added processing.

In order to capture scale efficiencies and remain competitive, many primary metal producers are consolidating their operations and focusing on their core production activities. These producers have increasingly outsourced metals distribution, inventory management, and value-added metals processing services to metals service centers. This process of outsourcing allows the primary metal producers to work with a relatively small number of intermediaries rather than many end customers. As a result, metals service centers, including the Company, are now providing an expanding range of services for their customers, including metal purchasing, processing, and supply chain solutions.

The Company’s marketing strategy focuses on distributing highly-engineered specialty grades and alloys of metals as well as providing specialized processing services designed to meet very precise specifications. Core products include alloy and stainless steels, nickel alloys, aluminum, titanium, and carbon. Inventories of these products may assume many forms such as plate, sheet, extrusions, round bar, hexagonal bar, square and flat bar, tubing, and coil. Depending on the size of the facility and the nature of the markets it serves, the Company's service centers are equipped as needed with bar saws, plate saws, oxygen and plasma arc flame cutting machinery, trepanning machinery, boring machinery, honing equipment, water-jet cutting equipment, stress relieving and annealing furnaces, leveling and surface grinding equipment, CNC machinery, and sheet shearing

equipment. Various specialized fabrications are also performed for customers through pre-qualified subcontractors that thermally process, turn, polish, cut-to-length, and straighten alloy and carbon bar, among other things.

Procurement

The Company purchases metals from many producers. Material is purchased in large lots and stocked at its service centers until sold, usually in smaller quantities and typically with some value-added processing services performed. The Company’s ability to provide timely delivery of a wide variety of specialty metals products, along with its processing capabilities and supply chain management solutions, allows customers to lower their own inventory investment by reducing their need to order the large quantities required by producers and their need to perform additional material processing services. Some of the Company’s purchases are covered by long-term contracts and commitments, which generally have corresponding customer sales agreements.

Thousands of customers from a wide array of industries are serviced primarily through the Company’s own sales organization. Orders are primarily filled with materials shipped from Company stock. The materials required to fill the balance of sales are obtained from other sources, such as purchases from other distributors or direct mill shipments to customers. Deliveries are made principally by third party logistics providers using their fleets, which display Company-branding. Otherwise, common carrier delivery is used in areas not serviced directly by such third party logistics providers. The Company’s broad network of locations provides same or next-day delivery to most of their markets, and two-day delivery to substantially all of the remaining target markets.

Customers

The Company’s customer base is broadly diversified and therefore, the Company does not have dependence upon any single customer, or a few customers. The customer base includes many Fortune 500 companies as well as thousands of medium- and smaller-sized firms.

Employees

As of December 31, 2019, the Company had 873 full-time employees. Of these full-time employees, 103 were represented by the United Steelworkers of America ("USW") under collective bargaining agreements. Effective May 15, 2018, we entered into a four-year collective bargaining agreement with the USW, which covers approximately 83 employees at our largest facility in Cleveland, Ohio. Approximately 20 employees at our Hammond, Indiana facility are covered by a separate collective bargaining agreement with the USW that was renegotiated effective September 1, 2016 and expires on August 31, 2020. The Company expects to begin negotiations to renew the collective bargaining agreement with the USW for employees at the Hammond, Indiana facility in early 2020. The Company believes its relationships with its employees and their representative unions are good.

Corporate Information

Our principal executive offices are located at 1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523 and our telephone number is (847) 455-7111. Our website address is www.castlemetals.com. The information contained on, or that can be accessed through, our website is not part of this prospectus.

The Exchange Offer

All of our existing 5.00%/7.00% Convertible Senior PIK Toggle Notes due 2022 are eligible to be exchanged for new notes and our common stock under the terms of this Exchange Offer. We refer to the 5.00%/7.00% Convertible Senior PIK Toggle Notes due 2022 as old notes in this prospectus.

We refer to the notes to be registered under this Exchange Offer registration statement as new notes. You may exchange your old notes for new notes and our common stock in this Exchange Offer. You should read the discussion under the headings “—Exchange Consideration,” “General Terms of the Exchange Offer and Consent Solicitation,” “Description of the New Notes” and “Description of Common Stock” for further information regarding the new notes and common stock to be received as exchange consideration.

For additional information regarding the terms of the new notes, and common stock, see “Description of the New Notes” and “Description of Common Stock” respectively.

A holder’s right to withdraw any old notes tendered will expire at the Expiration Date. See “General Terms of the Exchange Offer and Consent Solicitation—Withdrawal of Tenders; Revocation of Consents.”

The new notes will be in denominations of $1,000 and integral multiples of $1.00 in excess thereof. Only whole principal amounts or numbers of shares of common stock will be issued with the principal amounts or numbers of shares of common stock to be issued to be adjusted by rounding up or down to the nearest $1.00 or number of shares of common stock. A half amount or number of shares of common stock will be rounded up.

For additional information regarding the terms of the new notes, and common stock, see “Description of the New Notes” and “Description of Common Stock,” respectively.

indenture governing the old notes to eliminate or amend substantially all of the restrictive covenants, release all collateral securing the Issuer’s obligations under the Existing Indenture, and modify certain of the events of default and various other provisions, contained in the Existing Indenture, see “General Terms of the Exchange Offer and Consent Solicitaiton – Consent Solicitation” and “Proposed Amendments”.

On the Closing Date, PNC Bank, National Association (in its capacity as “First Lien Agent”), the Trustee (as defined below) and the Issuer and certain of its subsidiaries will execute an Intercreditor Agreement (the “New Intercreditor Agreement”) providing for the lien priority of the First Lien Facility over the new notes. The terms and conditions of the New Intercreditor Agreement will be substantially consistent with those applicable to the existing intercreditor agreement between the First Lien Agent and the trustee for the old notes (the “Existing Intercreditor Agreement”). PNC Bank, National Association and the trustee for the old notes will enter into an amendment of the Existing Intercreditor Agreement to, among other things, remove certain limitations and rights of the old notes with respect to the First Lien Facility (the “Amendment to the Existing Intercreditor Agreement”).

On the Closing Date, the Issuer and certain stockholders expect to execute an amended and restated Registration Rights Agreement (the “A&R Registration Rights Agreement”). The terms and conditions of the A&R Registration Rights Agreement will be substantially consistent with those applicable to the existing agreement. The Support Agreements, the New Intercreditor Agreement, Amendment to Existing Intercreditor Agreement and the A&R Registration Rights Agreement are referred to collectively herein as the “Definitive Documentation”.

and/or entered into, as applicable, documentation (including one or more supplemental indentures) effecting the deletion of the covenants in the Existing Indenture and release of all collateral under the Existing Indenture; (iv) all Definitive Documentation having been executed and remain in full force and effect, which Definitive Documentation shall be in form and substance acceptable to the Company and the Required Consenting Noteholders; (v) all requisite filings with the Securities and Exchange Commission, OTC Markets Group, Inc., and other governmental authorities and third parties having become effective, and all governmental authorities and third parties having approved or consented to the Exchange Offer, to the extent required and (vi) the shares of common stock to be issued in the Exchange Offer having been duly authorized and will be validly issued, fully paid and non-assessable.

Assuming completion of the Exchange Offer and the tender of all outstanding old notes as of December 31, 2019, we will have approximately 75.3 million shares of common stock outstanding, out of 200.0 million shares authorized. Approximately 212.9 million shares of common stock will be issuable upon conversion of the new notes. At the completion of the Exchange Offer, we therefore expect that we will not have sufficient authorized shares of common stock to issue upon conversion of the new notes. If the Exchange Offer is completed, we intend to call a special meeting of stockholders (or consider such matters at our upcoming annual meeting of stockholders) to be held as soon as reasonably practicable for stockholders of record as of a date occurring on or after the Closing Date (which will include holders of old notes who receive shares of common stock in the Exchange Offer) to consider the following matters: (1) a proposal to amend our charter to increase the number of authorized shares of our common stock available for issuance, in order to provide a sufficient number of authorized shares of common stock for the issuance of shares upon conversion of the new notes, (2) a proposal to amend our charter to effect a reverse stock split of shares of our common stock; and (3) any other matters properly brought before the meeting. In lieu of a special or annual meeting of stockholders, the Company may direct the actions set forth in clauses (1) and (2) above to be taken by written consent of the stockholders in accordance with applicable Maryland law and our charter and bylaws. Additionally, in lieu of seeking a vote of stockholders to effect a reverse stock split through an amendment to our charter, the Board of Directors may authorize the Company to undertake a reverse stock split of no greater than ten shares of common stock into one share of common stock, which the Board of Directors may authorize, without any action by stockholders, in accordance with Maryland law. In the indenture governing the new notes, we have agreed to use commercially reasonable efforts to cause items (1) and (2) of the preceding sentence to occur no later than August 31, 2020. Unless and until we obtain stockholder approval of the increase in the number of shares of our common stock authorized and available for issuance upon

conversion of the new notes, if the new notes are converted, we may not elect physical settlement or combination settlement of any conversion of new notes if such election would result in the issuance of more than 124.7 million shares of common stock (in the aggregate for the new notes taking into account all prior or concurrent new notes conversions). In such circumstance, we would be required to pay cash to satisfy our settlement obligations. We may not have sufficient funds to satisfy such cash obligations and, in such circumstances, may not be able to arrange the necessary financing on favorable terms or at all.

Custodial entities that are participants in The Depository Trust Company, or DTC, may tender old notes through DTC’s Automated Tender Offer Program, known as ATOP, by which the custodial entity and the beneficial owner on whose behalf the custodial entity is acting agree to be bound by the Letter of Transmittal. See “General Terms of the Exchange Offer and Consent Solicitation—Procedures for Tendering Old Notes.” Holders may also tender old notes at their option through the completion and delivery to the Exchange Agent of a Letter of Transmittal. See “General Terms of the Exchange Offer and Consent Solicitation—Procedures for Tendering Old Notes.” A Letter of Transmittal need not accompany tenders effected through ATOP.

telephone numbers set forth on the back cover of this prospectus and under “General Terms of the Exchange Offer and Consent Solicitation—Exchange Agent.”

In lieu of physically completing and signing the Letter of Transmittal and delivering it to the Exchange Agent, DTC participants may electronically transmit their acceptance of the Exchange Offer through the ATOP procedures described in “General Terms of the Exchange Offer and Consent Solicitation—Tender of Notes Through ATOP.”.

Letters of Transmittal and Consent should not be delivered directly to the Company.

SUMMARY DESCRIPTION OF THE NEW NOTES

The summary below describes the principal terms of the new notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. See the “Description of the New Notes” section of this prospectus for a more detailed description of the terms and conditions of the new notes.

The guarantees will be the senior secured obligations of the Guarantors and will:

Holders of the Notes will be deemed to have agreed and accepted the terms of the Intercreditor Agreement and to have authorized and directed the Collateral Agent (and Trustee, if applicable) to enter into and perform its obligations under the Intercreditor Agreement, binding the Holders to the terms thereof by their acceptance of the Notes.

No sinking fund, mandatory redemption or other similar provisions shall apply to the Notes.

If a Fundamental Change occurs, each Holder shall have the right to require the Company to repurchase all of such Holder’s Notes or any portion thereof in accordance with the Indenture at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest. See “Description of the New Notes—Repurchase at the Option of Holders Upon a Fundamental Change”

These covenants are subject to a number of important exceptions and qualifications as described under “Description of the New Notes—Certain Covenants.”

the common stock issued upon conversion of the Notes, of certain of our stockholders, see “Definitive Documentation – A&R Registration Rights Agreement.”

For additional information regarding the Notes, see the “Description of the New Notes” section of this prospectus.

Consequences of Not Exchanging Old Notes

If you currently hold old notes and do not tender them, then, following settlement of the Exchange Offer, your old notes will continue to be outstanding according to their terms (as amended pursuant to any amendments resulting from the Consent Solicitation). Because the new notes will be secured by certain assets of the Company and the Guarantors and the old notes will be unsecured, any old notes left outstanding after the Exchange Offer will effectively be subordinated to the new notes to the extent of the assets securing the new notes and will be subordinated to the First Lien Facility. In addition, if we complete the Exchange Offer, the liquidity of any old notes that remain outstanding after settlement of the Exchange Offer may be adversely affected and the value of the old notes may otherwise be affected by the completion of the Exchange Offer. Any old notes not tendered and exchanged under the terms of the Exchange Offer will remain as unsecured debt effectively subordinate to the new notes and subordinate to the First Lien Facility.

RISK FACTORS

You should carefully consider the risk factors set forth below as well as the other information contained in this prospectus before investing in the notes. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. In such a case, you may lose all or part of your original investment.

Risks Related to the Exchange Offer and Holding the New Notes

Risks Relating to the Exchange Offer and Consent Solicitation

We may not complete the Exchange Offer and Consent Solicitation.

The completion of the Exchange Offer and Consent Solicitation is subject to the satisfaction, or in certain cases, waiver of specified conditions. It is a condition to the completion of the Exchange Offer that, among other things, that the aggregate principal amount of old notes that are not tendered and exchanged not exceed $3.0 million and the Required Consenting Noteholders and the Trustee shall have consented to and/or entered into, as applicable, documentation (including one or more supplemental indentures) effecting the deletion of the covenants in the Existing Indenture and release of all collateral under the Existing Indenture. We have entered into Support Agreements with holders of the old notes who, in the aggregate, hold in excess of 96% of the outstanding principal amount of the old notes. Under the terms of the Support Agreements, such holders have agreed, among other things, to tender all of their old notes in the Exchange Offer and to consent to the Proposed Amendments, subject to certain conditions. If the conditions to the completion of the Exchange Offer and Consent Solicitation are not satisfied or, if permitted, waived, the Exchange Offer may not be completed.

We may recognize a significant amount of cancellation of indebtedness (“COD”) income as a result of the transactions contemplated by the Exchange Offer.

The exchange of old notes for new notes and common stock pursuant to the Exchange Offer may result in cancellation-of-indebtedness income, or COD income, to the Issuer for United States federal income tax purposes. Because the amount of COD income to be recognized by the Issuer depends in part on the fair market value and/or issue price of instruments to be issued on the Closing Date, the precise amount of COD income resulting from the exchange of old notes cannot be determined prior to the Closing Date. To the extent that the Issuer is considered insolvent from a tax perspective (i.e., the Issuer’s liabilities exceed the fair market value of its assets) immediately prior to the consummation of the Exchange Offer, any such COD income generally would be excluded from the Issuer’s taxable income. If and to the extent any COD income is excluded from taxable income pursuant to the insolvency exception, the Issuer generally will be required to reduce certain of the Issuer’s tax attributes, including, but not limited to, the Issuer’s net operating losses, loss carryforwards, credit carryforwards and tax basis in certain assets. This may result in a significant reduction in, and possible elimination of, certain of the Issuer’s tax attributes. If the Issuer is not considered insolvent from a tax perspective immediately prior to the consummation of the Exchange Offer, the Issuer may incur a cash tax liability from such COD income.

Our ability to use our NOLs to offset our future income may be limited.

For United States federal income tax purposes, it is likely that a “Section 382 ownership change” will occur as a result of our issuance of shares in the Exchange Offer. To the extent the Issuer’s NOLs, loss carryforwards and other relevant tax attributes are not reduced as described above, the Issuer expects such tax attributes will be subject to the annual limitation imposed by Section 382 following the Closing Date.

We will incur significant costs in conducting the Exchange Offer and Consent Solicitation.

The holders of the old notes who exchange those notes for new notes will receive new notes and common stock in connection with the Exchange Offer. The Exchange Offer and Consent Solicitation have also resulted, and will continue to result through and for a period of time after the Closing Date, in significant costs to us, including advisory and professional fees paid in connection with pursuing the Exchange Offer and Consent Solicitation.

We have not obtained a third-party determination that the Exchange Offer is fair to holders of the old notes.

We are not making a recommendation as to whether holders of the old notes should exchange their old notes or consent to the Proposed Amendments. We have not retained and do not intend to retain any unaffiliated representative to act solely on behalf of the holders of the old notes for purposes of negotiating the Exchange Offer or preparing a report concerning the fairness of the Exchange Offer. We cannot assure holders of the old notes that the value of the exchange consideration received in the Exchange Offer will in the future equal or exceed the value of the old notes tendered, and we do not take a position as to whether you ought to participate in the Exchange Offer and Consent Solicitation.

If the Exchange Offer is consummated, holders of old notes that do not exchange their old notes in the Exchange Offer will be subject to certain risks.

If the Exchange Offer is consummated, holders that do not validly tender their old notes in the Exchange Offer will not be entitled to receive exchange consideration. The new notes and the related guarantees will be our senior secured obligations and will rank pari passu in right of payment with all of our and the Guarantors’ existing and future senior indebtedness and secured by a second-priority lien on the Collateral (as defined below). The new notes will rank effectively senior in right of payment to the old notes to the extent of the value of the Collateral securing such obligations.

If the Exchange Offer is consummated, the Proposed Amendments to the Existing Indenture relating to the old notes will become effective, and will substantially reduce the covenant protection and event of default protection of and will release all collateral securing the Issuer’s obligations under the Existing Indenture. See “Proposed Amendments.”

In addition, consummation of the Exchange Offer and Consent Solicitation would substantially reduce the aggregate principal amount of old notes outstanding, which could adversely affect the trading market, if any, for the untendered old notes. This could adversely affect the liquidity, market price, and price volatility of any untendered old notes. If a market for untendered old notes exists, such old notes may trade at a discount to the price at which the old notes would trade if the amount outstanding had not been reduced, depending on prevailing interest rates, the market for similar securities, and other factors.

Risks Related to the New Notes

Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our debt instruments.

We have substantial debt service obligations. As of December 31, 2019, we had approximately $324.3 million of total debt outstanding, all of which is secured. The debt outstanding, in order of priority, was comprised of $127.8 million of borrowings under our Revolving Credit and Security Agreement (as amended, the “Expanded ABL Credit Agreement”), $193.7 million aggregate principal amount of old notes, and short-term borrowings of approximately $2.9 million under a local credit facility (the “Foreign Line of Credit”). Our debt instruments currently limit our ability to pay in cash the interest accruing on our old notes, so the amount of old notes outstanding continues to grow quarterly as interest is paid in kind. The Expanded ABL Credit Agreement and the old notes are secured by collateral security interests in substantially all of our assets and are guaranteed by certain of our subsidiaries. Our substantial level of indebtedness could have significant effects on our business, including the following:

The Expanded ABL Credit Agreement provides for a $125.0 million senior secured, revolving credit facility (“Revolving A Credit Facility”) and an additional $25.0 million last out Revolving B Credit Facility (the “Revolving B Credit Facility” and together with the Revolving A Credit Facility, the “First Lien Facility”). We expect to obtain the funds to pay our expenses and to satisfy our debt obligations from our operations and available resources under the First Lien Facility. The indenture governing the new notes will allow us to incur indebtedness under our First Lien Facility and incur certain other additional indebtedness, including pari passu senior secured indebtedness in certain circumstances. Our ability to meet our expenses and make these principal and interest payments as they come due, therefore, depends on our future performance, which will be affected by financial, business, economic and other factors, many of which we cannot control. Our business may not generate sufficient cash flow from operations in the future, and our anticipated revenue and cash flow may not be realized, either or both of which could result in our being unable to repay indebtedness or to fund other liquidity needs. If we do not have enough funds, we may be required to refinance all or part of our then existing debt, sell assets or borrow more funds, which we may not be able to accomplish on terms acceptable to us, or at all. In addition, the terms of existing or future debt agreements may restrict us from pursuing any of these alternatives which could have an adverse effect on our financial condition or liquidity.

Indebtedness under our First Lien Facility, and certain additional future indebtedness will be senior to the new notes to the extent of the value of the Collateral securing those obligations.

Obligations under our First Lien Facility are secured by a first-priority lien on substantially all of the assets of the Issuer and the Guarantors subject to certain exclusions as described in more detail under the heading “Description of the New Notes” below (the “Collateral”), and obligations under our new notes are secured by a second-priority lien on such Collateral. The second-priority liens on the Collateral securing the new notes and the guarantees are therefore lower in priority than the liens securing our and the Guarantors’ obligations under the First Lien Facility. In addition, under the indenture governing the new notes, we and the Guarantors may, from time to time, be permitted to incur additional indebtedness, which may be secured by liens on the Collateral that rank senior in priority to the liens securing the new notes and the guarantees. As such, holders of the indebtedness under our First Lien Facility, and any such other indebtedness will be entitled to realize proceeds from the realization of value of the Collateral to repay such indebtedness in full before the holders of the new notes and the guarantees will be entitled to any recovery from such collateral. As a result, the new notes and the guarantees are effectively junior in right of payment to indebtedness under the First Lien Facility, and any such other indebtedness, to the extent that the realizable value of the Collateral does not exceed the aggregate amount of such indebtedness.

It is possible that the realizable value of the Collateral securing the new notes and the guarantees may not be sufficient, in an insolvency or other similar proceeding, to satisfy the claims of all effectively senior creditors, along with those of the holders of the new notes and the guarantees.

We may not be able to generate sufficient cash to service all of our existing debt service obligations, and may be forced to take other actions to satisfy our obligations under our debt agreements, including the new notes, which may not be successful.

Our total outstanding debt under our First Lien Facility, the old notes, and the Foreign Line of Credit has an aggregate principal amount of $324.3 million as of December 31, 2019. Our ability to make scheduled payments on or to refinance our debt obligations depends on our future financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. Therefore, we may not be able to maintain or realize a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including the new notes.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments, capital expenditures or potentially accretive acquisitions, sell assets, seek additional capital or restructure or refinance our indebtedness, including the new notes. Our ability to restructure or

refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous borrowing covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations which could have an adverse effect on our financial condition or liquidity.

Rights of holders of new notes in the Collateral may be adversely affected by the failure to have, obtain and/or perfect liens on certain assets.

Subject to certain exceptions, the liens securing the new notes will cover substantially all of our and the Guarantors’ assets, whether now owned or acquired in the future on a second lien basis pursuant to the New Intercreditor Agreement. Applicable law requires that certain property and rights acquired after the grant of a general security interest or lien can only be perfected at the time such property and rights are acquired and identified. There can be no assurance that the Trustee or the collateral agent will monitor or be informed of the future acquisition of property and rights that constitute collateral, and that the necessary action will be taken to properly perfect the lien on such after acquired collateral. The collateral agent for the new notes has no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interests therein. Such failure may result in the loss of the lien thereon or of the second priority of the lien securing the new notes.

Despite our substantial level of indebtedness, we may still incur significantly more debt, which could exacerbate any or all of the risks described above.

We may be able to incur substantial additional indebtedness in the future. Although the First Lien Facility and indenture governing the new notes will limit our ability and the ability of our subsidiaries to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial. In addition, the indenture governing the new notes will not prevent us from incurring obligations that do not constitute indebtedness. See “Description of the New Notes.” To the extent that we incur additional indebtedness or such other obligations, the risks associated with our substantial leverage described above, including our possible inability to service our debt, would increase.

Our debt instruments, including the new notes, impose significant operating and financial restrictions, which may prevent us from pursuing certain business opportunities and taking certain actions and our failure to comply with the covenants contained in our debt instruments could result in an event of default that could adversely affect our operating results.

Our debt agreements, including the new notes, impose, and future debt agreements may impose, operating and financial restrictions on us. These restrictions limit or prohibit, among other things, our ability to:

These covenants could adversely affect our ability to finance our future operations or capital needs, withstand a future downturn in our business or the economy in general, engage in or expand business activities, including future opportunities that may be in our interest, and plan for or react to market conditions or otherwise execute our business

strategies. A breach of any of these covenants could result in a default in respect of the related indebtedness. If a default occurs, in certain circumstances, the relevant lenders or holders of such indebtedness could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness. If the maturity of our indebtedness is accelerated, we may not have sufficient cash resources to satisfy our debt obligations and may not be able to continue our operations as planned.

The new notes will be structurally subordinated to all liabilities of any of our non–guarantor subsidiaries and the enforcement of the guarantees of our foreign subsidiaries may be costly and difficult.

If any of our subsidiaries that are not guarantors of the new notes becomes insolvent, liquidates, reorganizes, dissolves or otherwise winds up, holders of its indebtedness and its trade creditors generally will be entitled to payment on their claims from the assets of such subsidiary before any of those assets would be made available to us. Consequently, your claims in respect of the new notes effectively would be subordinated to all of the existing and future liabilities of our subsidiaries that are not guarantors of the new notes, see footnote 11 to the “Consolidated Financial Statements.”

Additionally, as some of our guarantors are foreign companies, enforcing such guarantees would require an enforcement action in a foreign jurisdiction, which may raise the cost and decrease the likelihood of enforcement.

Holders of our new notes will be able to require us to repurchase their new notes following a fundamental change, which includes, among other things, the acquisition of more than 50% of our outstanding voting power by a person or group. We may not have sufficient funds to satisfy such cash obligations. Furthermore, our obligation to offer to redeem new notes upon the occurrence of a fundamental change will be triggered only by certain specified transactions, and may discourage a transaction that could be beneficial to the holders of our common stock and the new notes.

Pursuant to the terms of the new notes indenture, upon the occurrence of a fundamental change (as defined in “Description of the New Notes”), which includes the acquisition of more than 50% of our outstanding voting power by a person or group, we may be required to repurchase some or all of the new notes for cash at a repurchase price equal to 100% of the principal amount of the new notes being repurchased, plus any accrued and unpaid interest up to but excluding the relevant fundamental change repurchase date. We may not have sufficient funds to satisfy such cash obligations and, in such circumstances, may not be able to arrange the necessary financing on favorable terms or at all. In addition, our ability to satisfy such cash obligations will be restricted pursuant to covenants contained in the First Lien Facility and the indenture for the new notes and will be permitted to be paid only in limited circumstances. We may also be limited in our ability to satisfy such cash obligations by applicable law or the terms of other instruments governing our indebtedness. Our inability to make any cash payments that may be required to satisfy the obligations described above would trigger an event of default under the First Lien Facility and the new notes, which in turn could constitute an event of default under our other outstanding indebtedness, thereby potentially resulting in the acceleration of certain of such indebtedness, the prepayment of which could further restrict our ability to satisfy such cash obligations.

The term “fundamental change” is limited to certain specified transactions and may not include other events that might adversely affect our financial condition or the market value of the new notes or our common stock. Our obligation to offer to redeem the new notes upon a fundamental change would not necessarily afford holders of such notes protection in the event of a highly leveraged transaction, reorganization, merger or similar transaction involving us.

Your right to exercise remedies with respect to the Collateral will be governed, and materially limited, by the New Intercreditor Agreement.

The rights of the holders of the new notes with respect to the Collateral will be limited by the New Intercreditor Agreement (as defined herein). To the extent that we have outstanding obligations under our First Lien Facility, or other senior or pari passu obligations secured by the Collateral, any actions that may be taken in respect of any of the Collateral, including the ability to cause the commencement of enforcement proceedings against the Collateral and to control the conduct of such proceedings, are limited and controlled and directed by the lenders under the First Lien Facility or the holders of such other obligations. In those circumstances, the indenture trustee and the collateral agent on behalf of the holders of the new notes will not have the ability to control or direct such actions, even if an event of default under the indenture governing the new notes has occurred or if the rights of the holders of the new notes are or may be adversely affected.

The collateral agent and the lenders under our First Lien Facility, and the holders of such other obligations are under no obligation to take into account the interests of holders of the new notes and guarantees when determining whether and how to exercise their rights with respect to the Collateral, subject to the New Intercreditor Agreement, and their interests and rights may be significantly different from or adverse to yours.

There are circumstances other than repayment or discharge of the new notes under which the Collateral securing the new notes and guarantees would be released automatically, without your consent or the consent of the indenture trustee and the collateral agent.

Pursuant to the indenture governing the new notes, under various circumstances all or a portion of the Collateral securing the new notes and guarantees would be released automatically without your consent or the consent of the indenture trustee and the collateral agent, including:

See “Description of the New Notes—Security—Collateral” and “—Release of Collateral.”

The indenture governing the new notes will also permit us to designate one or more of our subsidiaries as Unrestricted Subsidiaries, subject to certain conditions, including that the designation of such subsidiary as unrestricted complies with the restricted payment covenant under the indenture. If we designate a subsidiary as an Unrestricted Subsidiary, all of the liens on any collateral owned by such subsidiary or any of its subsidiaries and any guarantees of the new notes by such subsidiary or any of its subsidiaries will be automatically released under the indenture. Designation of one or more of our subsidiaries as an Unrestricted Subsidiary will therefore reduce the aggregate value of the Collateral securing the notes.

The imposition of certain permitted liens may cause the assets on which such liens are imposed to be excluded from the Collateral securing the new notes and the guarantees. There are also certain other categories of property that are excluded from the Collateral.

The indenture governing the new notes will permit us and the guarantors to grant certain permitted liens in favor of third parties and, in certain cases, any assets subject to such liens will be automatically excluded from the Collateral securing the new notes and the guarantees to the extent inclusion in such collateral would be prohibited by the documents relating to such permitted liens.

Other categories of excluded assets and property include, among others, any assets owned by our non-guarantor subsidiaries, certain equipment assets, certain stock of foreign subsidiaries and the proceeds from any of the foregoing. See “Description of the New Notes—Security—Collateral—General.” Excluded assets are not available as collateral to secure our obligations and the obligations of the guarantors under the new notes. As a result, with respect to the excluded assets, the new notes and the guarantees effectively rank equally with any of our and the guarantors’ other senior indebtedness that is not itself secured by the excluded assets. In addition, some of the excluded assets will secure obligations under the First Lien Facility or may secure other additional indebtedness secured by liens that are pari passu with or higher priority than liens securing the new notes and the guarantees. As a result, the lenders under our First Lien Facility and such other indebtedness may be able to access such excluded assets to satisfy their claims prior to accessing the Collateral to satisfy the claims under the new notes and the guarantees.

The value of the Collateral securing the new notes may not be sufficient to satisfy our and the guarantors’ obligations under the new notes and the guarantees.

No appraisal of the value of the Collateral has been made in connection with this Exchange Offer, and the fair market value of the Collateral is subject to fluctuations based on factors that include general economic conditions

and similar factors. The amount to be received upon a sale of the Collateral would be dependent on numerous factors, including the actual fair market value of the Collateral at such time, the timing and the manner of the sale and the availability of buyers. By its nature, portions of the Collateral may be illiquid and may have no readily ascertainable market value. Accordingly, in the event of a foreclosure, liquidation, bankruptcy or similar proceeding, the Collateral may not be sold in a timely or orderly manner, and the proceeds from any sale or liquidation of the Collateral may not be sufficient to satisfy our and the guarantors’ obligations under the new notes and the guarantees.

To the extent that pre-existing liens, liens permitted under the indenture governing the new notes and other rights, including liens on excluded property (in addition to the holders of obligations secured by higher-priority liens), encumber any of the Collateral securing the new notes and the guarantees, those parties have or may exercise rights and remedies with respect to the Collateral that could adversely affect the value of the Collateral and the ability of the collateral agent, the indenture trustee or the holders of the new notes to realize or foreclose on the Collateral.

Your security interests in certain items of present and future collateral may not be perfected. Even if your security interests in certain items of collateral are perfected, it may not be practicable for you to enforce or economically benefit from your rights with respect to such security interests.

The security interests are not perfected with respect to certain items of collateral that cannot be perfected by the filing of financing statements in each debtor’s jurisdiction of organization, the filing of mortgages, the delivery of possession of certificated securities, the filing of a notice of security interest with the U.S. Patent and Trademark Office or the U.S. Copyright Office or certain other conventional methods to perfect security interests in the U.S. Security interests in collateral such as deposit accounts and securities accounts, which require or benefit from additional special filings or other actions or the obtaining of additional consents, may not be perfected or may not have priority with respect to the security interests of other creditors. We and the Guarantors will have limited obligations to perfect the security interest of the holders of the new notes in specified collateral. To the extent that your security interests in any items of collateral are unperfected, your rights with respect to such collateral are equal to the rights of our general unsecured creditors in the event of any bankruptcy filed by or against us under applicable United States federal bankruptcy laws.

In addition, applicable law requires that certain property and rights acquired after the grant of a general security interest can only be perfected at the time such property and rights are acquired and identified. Necessary action may not be taken to properly perfect the security interest in such after-acquired collateral. Failure to timely perfect security interests may invalidate such security interests, limit the assets included in the Collateral and block the exercise of remedies with respect to such assets. Moreover, the collateral agent may need to obtain the consent of a governmental agency to obtain or enforce a security interest in certain of the Collateral or to otherwise operate our business. We cannot assure you that the collateral agent will be able to obtain any such consent or that any such consent will not be delayed, the event of which may adversely affect your rights as holders. Moreover, the collateral agent in exercising its rights to foreclose on certain assets may need to commence governmental proceedings in order to obtain any necessary governmental approvals. As a result, there may be prolonged delays in receiving such approval, or such approval may not be granted to the collateral agent, the result of which may adversely affect your rights as holders.

A court could cancel the new notes or the related guarantees of our existing and future domestic restricted subsidiaries under fraudulent conveyance laws or certain other circumstances.

Our issuance of the new notes and the issuance of the related guarantees by our existing and future domestic restricted subsidiaries may be subject to review under federal or state fraudulent transfer or similar laws.

All of our existing and future domestic restricted subsidiaries will guarantee the new notes. If we or such subsidiary becomes a debtor in a case under the Bankruptcy Code or encounters other financial difficulty, under federal or state laws governing fraudulent conveyance, renewable transactions or preferential payments, a court in the relevant jurisdiction might avoid or cancel the guarantee. The court might do so if it found that, when the subsidiary entered into its guarantee or, in some states, when payments become due thereunder, (a) it received less than reasonably equivalent value or fair consideration for such guarantee and (b) either (i) was or was

rendered insolvent, (ii) was left with inadequate capital to conduct its business or (iii) believed or should have believed that it would incur debts beyond its ability to pay. The court might also avoid such guarantee, without regard to the above factors, if it found that the subsidiary entered into its guarantee with actual or deemed intent to hinder, delay, or defraud its creditors.

A court would likely find that a subsidiary did not receive reasonably equivalent value or fair consideration for its guarantee unless it benefited directly or indirectly from the issuance of the related notes. If a court avoided such guarantee, you would no longer have a claim against such subsidiary or the Collateral granted by such subsidiary to secure its guarantee. In addition, the court might direct you to repay any amounts already received from such subsidiary. If the court were to avoid any guarantee, we cannot assure you that funds would be available to pay the related notes from another subsidiary or from any other source.

The indenture governing the new notes will state that the liability of each Guarantor on its guarantee is limited to the maximum amount that the subsidiary can incur without risk that the guarantee will be subject to avoidance as a fraudulent conveyance. This limitation may not protect the guarantees from a fraudulent conveyance attack or, if it does, we cannot assure you that the guarantees and the Collateral granted by such subsidiary to secure its guarantee will be in amounts sufficient, if necessary, to pay obligations under the new notes when due.

Similarly, if we become a debtor in a case under the Bankruptcy Code or encounter other financial difficulty, a court might cancel our obligations under the new notes, if it found that when we issued the such notes (or in some jurisdictions, when payments become due under such notes), factors (a) and (b) above applied to us, or if it found that we issued such notes with actual intent to hinder, delay or defraud our creditors.

There may be no public trading market for the new notes, and your ability to sell such notes will be limited.

There is no existing public market for the new notes. A market for the new notes may not develop, and any market that develops may not persist. We cannot assure you as to the liquidity of any market that may develop for the new notes, your ability to sell your new notes or the price at which you would be able to sell your new notes. Future trading prices of the new notes will depend on many factors, including, among other things, prevailing interest rates, our operating results and the market for similar securities.

We do not intend, and are not obligated, to apply for listing of the new notes on any securities exchange or other market. The liquidity of any trading market and the trading price of such notes may be adversely affected by changes in our financial performance or prospects and by changes in the financial performance of or prospects for companies in our industry generally.

Even though the new notes are convertible into shares of our common stock, the terms of the new notes will not provide protection against some types of important corporate events.

The new notes are convertible into shares of our common stock. Upon the occurrence of certain events, we may be required to offer to repurchase some or all of the new notes then outstanding. However, certain important corporate events, such as leveraged recapitalizations, that would increase the level of our indebtedness, would not constitute a “fundamental change” under the new notes. See “Description of the New Notes.”

The market price of the new notes could be significantly affected by the market price of our common stock, which may fluctuate significantly.

We expect that the market price of the new notes will be significantly affected by the market price of our common stock. This may result in greater volatility in the trading value for the new notes than would be expected for nonconvertible debt securities. Factors that could affect our common stock price include the following:

In recent years, stock markets have experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to the operating performance of these companies. These broad market fluctuations may adversely affect the market prices of our common stock and the new notes.

The conversion rate of the new notes may not be adjusted for all dilutive events that may occur.

The conversion rate of the new notes is subject to adjustment for certain events including, but not limited to, the issuance of stock dividends on our common stock, the issuance of certain rights, options or warrants; subdivisions or combinations of our common stock; certain distributions of capital stock, evidences of our indebtedness, other assets or property; or rights, options or warrants entitling a holder of common stock to acquire our capital stock of the Company or cash to holders of our common stock; and certain tender or exchange offers as described under “Description of the New Notes—Adjustment of the Conversion Rate.” The conversion rate will not be adjusted for other events, such as certain stock issuances for cash that may adversely affect the trading price of the new notes.

You may be subject to tax if we make or fail make certain adjustments to the conversion price of the new notes even though you do not receive a corresponding cash distribution.

The conversion price of the new notes is subject to adjustment in certain circumstances, including the payment of cash dividends and upon certain fundamental changes. If the conversion rate is adjusted as a result of a distribution that is taxable to our common stockholders, such as a cash dividend, you may be deemed to have received a dividend subject to United States federal income tax without the receipt of any cash. In addition, a failure to adjust (or to adjust adequately) the conversion price after an event that increases your proportionate interest in us could be treated as a deemed taxable dividend to you. If a make-whole fundamental change occurs on or prior to the maturity date of the new notes, under some circumstances, we will increase the conversion rate for new notes converted in connection with the make-whole fundamental change. Such increase may also be treated as a distribution subject to United States federal income tax as a dividend. See “Material United States Federal Income Tax Considerations.” If you are a non-United States Holder (as defined in “Material United States Federal Income Tax Considerations”), any deemed dividend would be subject to United States federal withholding tax at a 30% rate, or such lower rate as may be specified by an applicable treaty, which may be set off against subsequent payments on the new notes. See “Material United States Federal Income Tax Considerations.”

As a holder of the new notes, you will not be entitled to any rights with respect to our common stock, but you will be subject to all changes made with respect to our common stock.

If you hold any of our new notes, you will not be entitled to any rights with respect to our common stock (including, without limitation, voting rights and rights to receive any dividends or other distributions, if any, on our common stock), but you will be subject to all changes affecting our common stock. You will have rights with respect to our common stock only when we deliver shares of common stock to you upon conversion of your new notes and, in limited cases, under the conversion rate adjustments applicable to the new notes. For example, if an amendment is proposed to our charter or amended and restated bylaws requiring stockholder approval and the record date for determining the stockholders of record entitled to vote on the amendment occurs prior to the delivery of common stock, if any, to you, you will not be entitled to vote on the amendment, although you will nevertheless be subject to any changes in the powers, preferences or other rights of our common stock.

We have various mechanisms in place that may prevent a change in control that stockholders may otherwise consider favorable.

We are subject to the takeover defense provisions of the Maryland General Corporation Law (the “MGCL”) that prohibit us from engaging in a “business combination” with an “interested stockholder” for a period of five

years after the date of the transaction in which the person first becomes an “interested stockholder,” unless the business combination or stockholder interest is approved in a prescribed manner. The application of these and certain other provisions of our charter or the MGCL could have the effect of delaying or preventing a change of control, which could adversely affect the market price of our common stock.

The provisions of our debt instruments also contain limitations on our ability to enter into change of control transactions. In addition, the repurchase rights in our new notes triggered by the occurrence of a fundamental change (as described under “Description of the New Notes—Repurchase at Option of Holders Upon a Fundamental Change”), and the additional shares of our common stock by which the conversion rate is increased in connection with certain fundamental change transactions, as described in the indenture for the new notes, could discourage a potential acquirer.

We may not have the ability to purchase the new notes upon a fundamental change or to pay the cash payment due upon conversion or at maturity.

If a fundamental change, as described under the heading “Description of the New Notes— Repurchase at Option of Holders Upon a Fundamental Change,” occurs, holders of the new notes may require us to repurchase, for cash, all or a portion of their new notes. In addition, upon conversion of the new notes, we must pay the principal portion in cash, common stock or a combination thereof at our election. We may not have sufficient funds to pay the interest, repurchase price or principal portion when due. In addition, our current and future debt or other agreements may restrict our ability to make cash payments upon conversion of the new notes or in connection with the repurchase of the new notes upon a fundamental change. For example, the First Lien Facility does not permit cash payments upon conversion of the notes or in connection with the repurchase of the notes upon a fundamental change if an event of default under the First Lien Facility then exists or would result from such payment. If we fail to pay interest on the new notes, repurchase the new notes or pay the cash payment due upon conversion when required, we will be in default under the indenture governing the new notes.

Risks Related to Our Common Stock

Our stockholders may be diluted by conversions of outstanding new notes and untendered old notes.

Assuming that all old notes are tendered and accepted and the Exchange Offer is consummated on March 30, 2020, the new notes will initially be convertible into 212.9 shares of common stock. The initial conversion rate of 2.1939631 shares of common stock per $1.00 principal amount of new notes is subject to adjustment from time to time pursuant to the terms of the indenture governing the new notes. Because the conversion price of the new notes is subject to downward adjustment, the new notes may be convertible, including in connection with a fundamental change, as described under the heading “Description of the New Notes—Repurchase at Option of Holders Upon a Fundamental Change,” into a greater number of shares in the future. In addition, the Company may, in certain circumstances, pay interest on the new notes (and any untendered old notes) in kind, which would result in additional new notes (and any untendered old notes) outstanding and available for conversion. The conversion of the new notes (and any untendered old notes), including any new notes (and any untendered old notes) issued as payment of interest in kind, may result in substantial dilution for our stockholders.

The sale of a substantial amount of our common stock, including shares of common stock issuable upon the conversion of the new notes, in the public market could adversely affect the prevailing market price of our common stock.

Sales of substantial amounts of shares of our common stock in the public market, or the perception that such sales might occur, could adversely affect the market price of our common stock, and the market value of our other securities.

A substantial number of shares of common stock are being offered by this prospectus, including shares issuable upon the conversion of the new notes, and we cannot predict if and when such shares may be sold in the public markets. Furthermore, in the future, we may issue additional shares of common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition, litigation settlement, employee arrangements, or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause our stock price to decline.

The market price of our common stock may decline.

Fluctuations in the price of our common stock could contribute to the loss of all or part of your investment. The trading price of our common stock could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our common stock, and our common stock may trade at prices significantly below the price that you paid for them. In such circumstances, the trading price of our common stock may not recover and may experience a further decline.

Factors affecting the trading price of our securities may include:

Broad market and industry factors may materially harm the market price of our common stock irrespective of our operating performance. The stock market in general and OTCQX have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our common stock, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to us could depress the price of our common stock, regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our common stock also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Risks Related to Our Business

Our future operating results are impacted by the volatility of the prices and supply of metals, which could cause our results to be adversely affected.

The availability and prices we pay for metal raw materials and the prices we charge for products may fluctuate depending on many factors, including general economic conditions (both domestic and international), competition, production levels, import tariffs, duties, and other trade restrictions, geo-political health and safety issues, and currency fluctuations. To the extent metal prices decline, we would generally expect lower sales, pricing and possibly lower operating income. Depending on the timing of the price changes and to the extent we are not able to pass on to our customers any increases in our metal raw materials prices, our operating results may be adversely affected. In addition, because we maintain substantial inventories of metals in order to meet

short lead-times and the just-in-time delivery requirements of our customers, a reduction in our selling prices could result in lower profitability or, in some cases, losses, either of which could adversely impact our ability to remain in compliance with certain provisions of our debt instruments, as well as result in us incurring impairment charges.

Our business and operations, and the operations of our suppliers and customers, may be adversely affected by the recent coronavirus (or COVID-19) outbreak.

We may face risks related to the recent outbreak of the Coronavirus Disease 2019 (COVID-19), which has been declared a “pandemic” by the World Health Organization as the disease has spread across the globe to many countries in which the Company does business and is impacting worldwide economic activity. The full impact of COVID-19 is unknown and rapidly evolving. Health epidemics or outbreaks of communicable diseases such as COVID-19 could result in widespread or localized health crises that could adversely affect general commercial activity and the economies and financial markets of many countries or localities in which the Company operates, sells, or purchases good and services. A public health epidemic, including COVID-19, poses the risk that we or our employees, contractors, suppliers, customers, transportation providers, and other business partners may be prevented or impaired from conducting ordinary course business activities for an indefinite period of time, either at specific branches or on a broader scale, including due to shutdowns necessitated for the health and wellbeing of our employees, the employees of our business partners, or shutdowns that may be requested or mandated by governmental authorities. For example, in January and February 2020, our operations in China, along with most other businesses in the country, were required by local authorities to take an extended Lunar New Year holiday in an effort to mitigate the effects of the COVID-19 outbreak. The shutdown of our Chinese facility caused a delay in commercial operations of that operation, but did not otherwise have a material impact on results. Similar shutdowns or similar directives to “de-densify” worksites are being implemented, considered, and/or proposed by government authorities in Europe, cities and states in the United States, and other locations throughout the world. There can be no assurance that COVID-19 will not impact any of our branches or our business generally as a result of the virus' potential impact on delays in supply chain, production and/or our customers. While each of our operations has prepared customized business continuity plans to address COVID-19 concerns, in an effort to ensure that we are protecting our employees, continuing to operate our business and service our customers' needs, and mitigating the potential impacts of COVID-19 or other similar epidemics, there is no guarantee that such plans will anticipate or fully mitigate the various impacts the pandemic or epidemic may have, much of which is still entirely uncertain. While it is not possible at this time to estimate the scope and severity of the impact that COVID-19 could have on our branches, the continued spread of COVID-19, the measures taken by the governments of countries affected, actions taken to protect employees, actions taken to continue operations, and the impact of the pandemic on various business activities in affected countries could adversely affect our financial condition, results of operations and cash flows. The extent to which COVID-19 impacts our business will depend on the severity, location and duration of the spread of COVID-19, and the actions undertaken by local and world governments and health officials to contain the virus or treat its effects, and the actions undertaken by the leadership and employees of our Company as well as those of our suppliers, customers and other business partners.

Our common stock is traded on the OTCQX® Best Market (the “OTCQX”), which could have an adverse impact on the market price and liquidity of our common stock and could involve additional risks compared to being listed on a national securities exchange.

Our common stock is traded on the OTCQX under the ticker “CTAM”. The trading of our common stock in the OTC market rather than a national securities exchange may negatively impact the trading price of our common stock and the levels of liquidity available to our stockholders. Securities traded in the OTC market generally have less liquidity due to factors such as the reduced number of investors that will consider investing in the securities, the reduced number of market makers in the securities, and the reduced number of securities analysts that follow such securities. As a result, holders of shares of our common stock may find it difficult to resell their shares at prices quoted in the market or at all.

Furthermore, because of the limited market and generally low volume of trading in our common stock that could occur, the share price of our common stock could be more likely to be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the markets perception of our business, and announcements made by us, our competitors, or parties with whom we have business relationships.

Because our common stock trades on the OTCQX, in some cases, we may be subject to additional compliance requirements under applicable state laws in the issuance of our securities. The lack of liquidity in our common stock may also make it difficult for us to issue additional securities for financing or other purposes, or to otherwise arrange for any financing we may need in the future. Accordingly, we urge that extreme caution be exercised with respect to existing and future investments in our common stock.

Ownership of our stock is concentrated, which may limit stockholders’ ability to influence corporate matters.

The Company’s ownership is concentrated among a small group of institutional investors and the Company’s management team. Certain directors, their affiliates, and/or any other concentrated ownership interests may have the voting power to substantially affect or control the outcome of matters requiring a stockholder vote, including the election of directors and the approval of significant corporate matters. Such a concentration of control could adversely affect the market price of our common stock or prevent a change in control or other business combinations that might be beneficial to us.

The lender under our First Lien Facility and/or the holders of our old notes can require us to repay our debt obligations following a change of control. We may not have sufficient funds to satisfy such cash obligations.

As of December 31, 2019, we had $127.8 million of borrowings under our First Lien Facility and $193.7 million of aggregate principal amount outstanding under the old notes. Upon the occurrence of a change in control (as defined in the Expanded ABL Credit Agreement) or a fundamental change (as defined in the indenture for the old notes), which in either case includes the acquisition of more than 50% of our outstanding voting power by a person or group, we may be required to repay all borrowings under the First Lien Facility and/or repurchase some or all of the old notes for cash at a repurchase price equal to 100% of the principal amount of the old notes being repurchased, plus any accrued and unpaid interest. We may not have sufficient funds to satisfy such cash obligations and, in such circumstances, may not be able to arrange the necessary financing on favorable terms or at all. In addition, our ability to satisfy such cash obligations will be restricted pursuant to covenants contained in the indenture for the old notes and will be permitted to be paid only in limited circumstances. We may also be limited in our ability to satisfy such cash obligations by applicable law or the terms of other instruments governing our indebtedness. Our inability to make any cash payments that may be required to satisfy the obligations described above would trigger an event of default under the old notes, which in turn could constitute an event of default under our other outstanding indebtedness, thereby potentially resulting in the acceleration of certain of such indebtedness, the prepayment of which could further restrict our ability to satisfy such cash obligations.

Holders of our old notes may convert their old notes into common stock at any time or in connection with a fundamental change. The conversion of our old notes into common stock will dilute the ownership interest of our existing stockholders.

Pursuant to the terms of the Existing Indenture, we may elect to settle any election to convert old notes in cash, common stock or a combination of both, however, our debt instruments currently limit our ability to pay cash in respect of the old notes. Any issuance by us of our common stock upon conversion of our old notes will dilute the ownership interest of our existing stockholders. In addition, any such issuance of common stock could have a dilutive effect on our net income per share to the extent that the average stock price during the period is greater than the conversion prices and exercise prices of the old notes. Furthermore, any sales in the public market of our common stock issuable upon conversion of the old notes could adversely affect prevailing market prices of our common stock.

We service industries that are highly cyclical and impacted by international regulatory concerns, and any downturn in our customers’ industries could reduce our revenue and profitability.

Many of our products are sold to customers in industries that experience significant fluctuations in demand based on economic conditions, energy prices, consumer demand, availability of adequate credit and financing, customer inventory levels, changes in governmental policies and/or regulations and other factors beyond our control, such as acts of war or terrorism, natural disasters or public health issues or pandemics. As a result of this volatility in the industries we serve, when one or more of our customers’ industries experiences a decline, we may have difficulty increasing or maintaining our level of sales or profitability if we are not able to divert sales of our products to customers in other industries. Historically, we have made a strategic decision to focus sales resources

on certain industries, specifically the aerospace, heavy equipment, machine tools and general industrial equipment industries. A downturn in these industries has had, and may in the future continue to have, an adverse effect on our operating results. We are also particularly sensitive to market trends in the manufacturing sectors of the North American economy and the two primary global markets which we serve, aerospace and industrial.

For example, two recent commercial aircraft accidents led to the grounding of the Boeing 737 Max aircraft in March 2019 by the Federal Aviation Administration and other international regulatory bodies. While our overall participation on the 737 MAX program is relatively limited both through direct sales and through our customer base, certain of our aerospace customers have significant content on the aircraft. The grounding of the aircraft has caused deliveries of that aircraft to be lower than expected in fiscal year 2019, and has therefore impacted our customers, in some cases significantly. Based on information currently available, we believe when the aircraft returns to service these missed deliveries will be fulfilled in future periods. Additionally, because Boeing sources large quantities of metal directly from mills for certain of its programs, including the 737 MAX, there could be impacts on our suppliers and market availability of certain products as a result of excesses or shortages. In 2019, we do not believe the grounding had a negative impact on our sales demand or pricing. Further, as stated above, our direct exposure to the 737 MAX is relatively limited, and therefore, we do not expect it to have a significant direct impact on sales demand or pricing of our products in 2020. However, we cannot exclude the possibility that these impacts could affect our aerospace end markets more broadly than the specific 737 MAX program, and thus could negatively impact our profitability and/or cash flow.

Our industry is highly competitive, which may force us to lower our prices and may have an adverse effect on our operating results.

The principal markets that we serve, aerospace and industrial, are highly competitive. Competition is based principally on price, service, quality, processing capabilities, inventory availability and timely delivery. We compete in a highly fragmented industry. Competition in the various markets in which we participate comes from a large number of value-added metals processors and service centers on a regional and local basis, some of which have greater financial resources than we do and some of which have more established brand names in the local markets we serve. We also compete to a lesser extent with primary metals producers who typically sell to very large customers requiring shipments of large volumes of metal. Increased competition could force us to lower our prices or to offer increased services at a higher cost to us, which could have an adverse effect on our operating results.

Our operating results are subject to the seasonal nature of our customers’ businesses.

A portion of our customers experience seasonal slowdowns. Historically, our revenues in the months of July, November, and December have been lower than in other months because of a reduced number of shipping days and holiday or vacation closures for some customers. Dependent on market and economic conditions, our sales in the first two quarters of the year, therefore, can be higher than in the third and fourth quarters due to this seasonality. As a result, analysts and investors may inaccurately estimate the effects of seasonality on our operating results in one or more future quarters and, consequently, our operating results may fall below expectations.

An impairment or additional restructuring charge could have an adverse effect on our operating results.

We continue to evaluate opportunities to reduce costs and improve operating performance. These actions could result in restructuring and related charges, including but not limited to asset impairments, employee termination costs, charges for pension benefits, and pension settlement and/or curtailments, which could be significant and could adversely affect our financial condition and results of operations.

We have a significant amount of long-lived assets. We review the recoverability of long-lived assets whenever significant events or changes occur which might impair the recovery of recorded costs, making certain assumptions regarding future operating performance. The results of these calculations may be affected by the current demand and any decline in market conditions for our products, as well as interest rates and general economic conditions. If impairment is determined to exist, we will incur impairment losses, which may have an adverse effect on our operating results.

Disruptions or shortages in the supply of raw materials could adversely affect our operating results and our ability to meet our customers’ demands.

Our business requires materials that are sourced from third party suppliers. If, for any reason, our primary suppliers of metals should curtail or discontinue their delivery of raw materials to us at competitive prices and in a timely manner, our operating results could suffer. Unforeseen disruptions in our supply bases, including those resulting from competition, political instability, acts of war or terrorism, natural disasters, and public health issues or pandemics, among other things, could materially impact our ability to deliver products to customers. The sourcing of certain metals may be highly competitive due to limited supplies and availability. The number of available suppliers could be reduced by factors such as industry consolidation and bankruptcies affecting metals producers, or suppliers may be unwilling or unable to meet our demand due to industry supply conditions. If we are unable to obtain sufficient amounts of raw materials from our traditional suppliers, we may not be able to obtain such raw materials from alternative sources at competitive prices to meet our delivery schedules, which could have an adverse impact on our operating results. To the extent we have quoted prices to customers and accepted orders for products prior to purchasing necessary raw materials, or have existing contracts, we may be unable to raise the price of products to cover all or part of the increased cost of the raw materials to our customers.

In some cases the availability of raw materials requires long lead times. As a result, we may experience delays or shortages in the supply of raw materials. If we are unable to obtain adequate and timely deliveries of required raw materials, we may be unable to timely supply customers with sufficient quantities of products. This could cause us to lose sales, incur additional costs, or suffer harm to our reputation, all of which may adversely affect our operating results.

Changes in United States tax laws could have a material adverse effect on our business, cash flow, results of operations or financial condition.

Legislative or regulatory measures by the U.S or non-U.S. governments, rules and interpretations under the current tax law, further changes in corporate tax rates, the realizability of the deferred tax assets and/or liabilities relating to our U.S. operations, the taxation of foreign earnings, and the deductibility of expenses (such as executive compensation) contained in tax legislation could have a material impact on the value of our deferred tax assets and/or liabilities, could result in significant charges in the current or future taxable years, and could increase our future U.S. tax expense. Furthermore, changes to the taxation of undistributed foreign earnings could change our future intentions regarding the reinvestment of such earnings. The foregoing items could have a material adverse effect on our business, cash flow, results of operations or financial condition.

Increases in freight and energy prices would increase our operating costs and we may be unable to pass these increases on to our customers in the form of higher prices, which may adversely affect our operating results.

We use energy to process and transport our products. The prices for and availability of energy resources are subject to volatile market conditions, which are affected by political, economic and regulatory factors beyond our control. Our operating costs increase if energy costs, including electricity, diesel fuel and natural gas, rise. During periods of higher freight and energy costs, we may not be able to recover our operating cost increases through price increases without reducing demand for our products. In addition, we typically do not hedge our exposure to higher freight or energy prices.

We operate in international markets, which expose us to a number of risks.

Although a majority of our business activity takes place in the United States, we serve and operate in certain international markets, which exposes us to political, economic and currency related risks, including the following:

In addition to the United States, we operate in Canada, Mexico, France, Singapore, and China. An act of war, terrorism, public health issues or a major pandemic event could disrupt international shipping schedules, cause additional delays in importing or exporting products into or out of any of these countries, including the United States, or increase the costs required to do so. In addition, acts of crime or violence in these international markets could adversely affect our operating results. Fluctuations in the value of the U.S. dollar versus foreign currencies could reduce the value of these assets as reported in our consolidated financial statements, which could reduce our stockholders’ equity. If we do not adequately anticipate and respond to these risks and the other risks inherent in international operations, it could have a material adverse impact on our operating results.

The imposition of tariffs or duties on imported metals could significantly increase the price of the metals we purchase from international suppliers and/or result in shortages in the supply of raw materials.

Though we source the majority of our products domestically in the countries in which we operate, we do source some products from international suppliers. The imposition of tariffs or duties on imported metals, other similar measures imposed by the U.S. government, and retaliatory/corresponding measure by other countries, has a pervasive impact on the metals market in which we operate. For example, we may be unable to pass through the higher costs to our customers for the metals we buy internationally, which could adversely impact our competitiveness, financial condition and operating results. Similarly, further decreases in imports could cause a disruption or shortage in the availability of the raw materials that we buy, which could limit our ability to meet customer's demand or to purchase material at competitive prices. This could cause us to lose sales, incur additional costs, or suffer harm to our reputation, all of which may adversely affect our operating results.

A portion of our workforce is represented by collective bargaining units, which may lead to work stoppages.

As of December 31, 2019, approximately 18% of our U.S. employees were represented by the USW under collective bargaining agreements, including hourly warehouse employees at our distribution centers in Cleveland, Ohio and Hammond, Indiana. As these agreements expire, there can be no assurance that we will succeed in concluding collective bargaining agreements with the USW to replace those that expire. Although we believe that our labor relations have generally been satisfactory, we cannot predict how stable our relationships with the USW will be or whether we will be able to meet the USW requirements without impacting our operating results and financial condition. The USW may also limit our flexibility in dealing with our workforce. Work stoppages and instability in our relationship with the USW could negatively impact the timely processing and shipment of our products, which could strain relationships with customers or suppliers and adversely affect our operating results. Effective May 15, 2018, we entered into a four-year collective bargaining agreement with the USW, which covers approximately 83 employees at our largest facility in Cleveland, Ohio. Approximately 20 employees at our Hammond, Indiana facility are covered by a separate collective bargaining agreement with the USW that was renegotiated effective September 1, 2016 and expires on August 31, 2020. We plan to begin negotiations in to renew the collective bargaining agreement with the USW for employees at the Hammond, Indiana facility in early 2020.

We rely upon our suppliers as to the specifications of the metals we purchase from them.

We rely on mill or supplier certifications that attest to the physical and chemical specifications of the metals received from our suppliers for resale and generally, consistent with industry practice, do not undertake independent testing of such metals. We rely on our customers to notify us of any product that does not conform to the specifications certified by the supplier or ordered by the customer. Although our primary sources of products have been domestic suppliers, we have and will continue to purchase product from foreign suppliers when we believe it is appropriate. In the event that metal purchased from domestic suppliers is deemed to not meet quality specifications as set forth in the mill or supplier certifications or customer specifications, we generally have recourse against these suppliers for both the cost of the products purchased and possible claims from our customers. However, such recourse will not compensate us for the damage to our reputation that may

arise from sub-standard products and possible losses of customers. Moreover, there is a greater level of risk that similar recourse will not be available to us in the event of claims by our customers related to products from foreign suppliers that do not meet the specifications set forth in the mill or supplier certifications. In such circumstances, we may be at greater risk of loss for claims for which we do not carry, or do not carry sufficient, insurance.

Our business could be adversely affected by a disruption to our primary distribution hubs.

Our largest facilities, in Cleveland (Ohio), Hammond (Indiana), and Janesville (Wisconsin) serve as primary distribution centers that ship product to our other facilities as well as external customers. Our business could be adversely impacted by a major disruption at any of these facilities due to unforeseen developments occurring in or around the facility, such as:

A prolonged disruption of the services and capabilities of these or other of our facilities could adversely impact our operating results.

Damage to or a disruption in our information technology systems could impact our ability to conduct business and could subject us to liability for failure to comply with privacy and information security laws.

Difficulties associated with the design and implementation of our enterprise resource planning (“ERP”) or other information technology systems could adversely affect our business, our customer service and our operating results.

We rely primarily on one information technology system to provide inventory availability to our sales and operating personnel, improve customer service through better order and product reference data and monitor operating results. Difficulties associated with upgrades or integration with new systems could lead to business interruption that could harm our reputation, increase our operating costs and decrease profitability. In addition, any significant disruption relating to our current information technology systems, whether resulting from such things as fire, flood, tornado and other natural disasters, power loss, network failures, loss of data, security breaches and computer viruses, or otherwise, may have an adverse effect on our business, our operating results and our ability to report our financial performance in a timely manner.

We could be vulnerable to interest rate fluctuations on our indebtedness, which could hurt our operating results.

We are exposed to various interest rate risks that arise in the normal course of business. Market risk arises from changes in interest rates. We currently finance our operations with both fixed rate and variable rate borrowings, and the fair market value of our $219.4 million of fixed rate borrowings may be impacted by changes in interest rates. In addition, if in the future interest rates subsequently increase significantly, it could significantly increase the interest expense on our variable rate borrowings which could have an adverse effect on our operating results and liquidity.

We may face risks associated with current or future litigation and claims.

From time to time, we are involved in a variety of lawsuits, claims and other proceedings relating to the conduct of our business. These suits concern issues including contract disputes, employment actions, employee benefits, taxes, environmental, health and safety, personal injury and product liability matters. Due to the uncertainties of litigation, we can give no assurance that we will prevail on all claims made against us in the lawsuits that we currently face or that additional claims will not be made against us in the future. While it is not feasible to predict the outcome of all pending lawsuits and claims, we do not believe that the disposition of any such pending matters is likely to have a materially adverse effect on our financial condition or liquidity, although the resolution in any reporting period of one of more of these matters could have an adverse effect on our operating results for that period. Also, we can give no assurance that any other lawsuits or claims brought in the future will not have an adverse effect on our financial condition, liquidity or operating results.

We could incur substantial costs in order to comply with, or to address any violations under, environmental and employee health and safety laws, which could adversely affect our operating results.

Our operations are subject to various environmental statutes and regulations, including laws and regulations governing materials we use and our facilities. In addition, certain of our operations are subject to international, federal, state and local environmental laws and regulations that impose limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage and disposal of solid and hazardous wastes. Our operations are also subject to various employee safety and health laws and regulations, including those concerning occupational injury and illness, employee exposure to hazardous materials and employee complaints. Certain of our facilities are located in industrial areas, have a history of heavy industrial use and have been in operation for many years and, over time, we and other predecessor operators of these facilities have generated, used, handled and disposed of hazardous and other regulated wastes. Currently unknown cleanup obligations at these facilities, or at off-site locations at which materials from our operations were disposed, could result in future expenditures that cannot be currently quantified, but which could have a material adverse effect on our financial condition, liquidity or operating results.

Potential environmental legislative and regulatory actions could impose significant costs on the operations of our customers and suppliers, which could have a material adverse impact on our results of operations, financial condition and cash flows.

As a metals distributor, our operations do not emit significant amounts of greenhouse gas (“GHG”). However, the manufacturing processes of many of our suppliers and customers are energy intensive and generate carbon dioxide and other GHG emissions. Any adopted future climate change and GHG legislative or regulatory measures may impose significant costs on the operations of our customers and suppliers and indirectly impact our operations. Until the timing, scope and extent of any future legislation and regulation becomes known, we cannot predict the effect on our results of operations, financial condition and cash flows.

Our business could be negatively impacted by cyber and other security threats or disruptions.

We face various cyber and other security threats, including attempts to gain unauthorized access to our sensitive information and computer networks. Unauthorized or inappropriate access to, or use of, our computer networks or systems may be intentional, unintentional or a result of criminal activity. Such unauthorized or inappropriate access may lead to the corruption of data, which could cause interruption in our operations or damage our computer systems or those of our customers or vendors. A party that is able to circumvent our security measures could also gain unauthorized access to confidential, proprietary, personal or other sensitive information or capabilities, which may belong to third parties, our employees or us.

The occurrence of such threats, attacks or incidents exposes us to risk of loss and possible claims brought by our customers, employees or other parties with whom we have commercial relationships, as well as actions by government regulators. In addition to potential legal liability, these activities may interfere with our ability to provide our products and services. Further, a perception that our security measures are ineffective against security incidents could damage our reputation, and we could lose employees, customers or vendors. Any of these occurrences could have an adverse impact on our financial condition and results of operations.

Thus, the success of our business depends on the security of our computer networks and systems and, in part, on the security of the computer networks and systems of our third-party vendors. Although we utilize various procedures and controls to monitor and mitigate the risk of these threats, there can be no assurance that these procedures and controls will be sufficient. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, we may be unable to anticipate these techniques or to implement adequate preventative measures. We also cannot give assurance that the security measures of our third-party vendors, including network and system providers, providers of customer and vendor support services and other vendors will be adequate. Thus, we may need to expend significant resources to protect against security breaches or to address problems caused by such breaches.

PROPERTIES

The Company’s corporate headquarters are located in Oak Brook, Illinois. All properties and equipment are sufficient for the Company’s current level of activities. As of December 31, 2019, distribution centers and sales offices are maintained at each of the following locations, most of which are leased, except as indicated:

LEGAL PROCEEDINGS

From time to time, the Company is party to a variety of legal proceedings, claims, and inquiries, including proceedings or inquiries by governmental authorities, which arise from the operation of its business. These proceedings, claims, and inquiries are incidental to and occur in the normal course of the Company's business affairs. The majority of these proceedings, claims, and inquiries relate to commercial disputes with customers, suppliers, and others; employment and employee benefits-related disputes; product quality disputes with vendors and/or customers; and environmental, health and safety claims. Although the outcome of these proceedings is inherently difficult to predict, management believes that the amount of any judgment, settlement or other outcome of these proceedings, claims and inquiries, after taking into account recorded accruals and the availability and limits of our insurance coverage, will not have a material adverse effect on the Company’s consolidated results of operations, financial condition or cash flows.

MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company's common stock is traded on the OTCQX tier of the OTC Markets Group, Inc. (“OTCQX”) under the symbol “CTAM”.

As of December 31, 2019, there were approximately 335 stockholders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers.

See “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation” for information regarding common stock authorized for issuance under equity compensation plans.

USE OF PROCEEDS

We will not receive any cash proceeds from the Exchange Offer. In consideration for the exchange consideration, we will receive the old notes. Old notes acquired by us pursuant to the Exchange Offer will be cancelled upon consummation of the exchange offer.

ACCOUNTING TREATMENT

Assuming all holders tender without withdrawing all of their old notes and we satisfy all conditions to the completion of this Exchange Offer, we will recognize common stock and paid-in-capital for the shares of common stock issued in connection with this Exchange Offer. Also, we expect that we will incur expenses of approximately $2.5 million based on estimated legal, trustee, printing and other expenses associated with this Exchange Offer.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2019 on:

You should read the following table in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company’s consolidated financial statements and related notes thereto included herein. The following discussion and analysis of our financial condition and results of operations contain forward-looking statements and includes numerous risks and uncertainties, including those described in “Risk Factors”. Actual results may differ materially from those contained in any forward-looking statements.

EXECUTIVE OVERVIEW

Financial Results Summary

The Company’s strategy is to become a leading global provider of specialty metals products and services and supply chain solutions to targeted global industries.

During the year ended December 31, 2019:

Recent Market and Pricing Trends

Although metals prices declined more than expected in the second half of the year, particularly in the North American industrial end markets, overall pricing within the metals market continued to have a positive impact on the Company's selling prices throughout 2019. To the extent that the Company can pass through higher material costs to its contractual customers, we expect higher selling prices within the metals market to continue to have an overall favorable impact on the Company's operating results. If higher material costs are not passed through to its contractual customers, the Company fails to avoid an overstocked position relative to the market and restock at lower replacement costs, or if prices begin to decrease within the metals market, the Company's operating results will be adversely impacted.

In many cases, the pricing of its products can have a more significant impact on the Company's operating results than demand because of the following reasons, among others:

In total, demand for the Company's products softened considerably in 2019, compared to the prior year, as tons sold per day decreased compared to the prior year for the majority of the products the Company sells, with the exception of aluminum. The increase in aluminum demand was primarily the result of strength in the aerospace market, a trend the Company expects to continue despite uncertainties around the return to service of the Boeing 737 MAX. The Company expects demand for its other core products, namely alloy bar, carbon and alloy flat products and SBQ bar, to remain soft in the near term, primarily due to continued weakness in the Industrial end markets. The Company believes that its disciplined focus on highly-accretive sales, particularly those including its value-added service offerings, will allow it to maintain relatively stable gross material margins despite the softening of demand, particularly in the North American industrial end markets.

The demand for the Company's products may change from time to time based on, among other things, general economic conditions, industry capacity, and the cyclical nature of the industries in which the Company's customers operate. The pricing environment, leading to increased competitiveness within the market, can also have a significant impact on demand. An increase or decrease in the demand for the Company's products has a significant impact on the Company's operating results. When volume increases, the Company's sales dollars generally increase, which leads to more dollars earned from normal operations. Similarly, a decrease in demand results in lower sales dollars which, once costs and expenses are factored in, leads to less dollars earned from normal operations. Although the lower demand also decreases the cost of materials and operating costs, including warehouse, delivery, selling, general and administrative expenses, the decrease in these costs and expenses is often less than the decrease in sales dollars due to fixed costs, resulting in lower operating margins. Management believes that with the Company's new global supply organization, which is focused on reducing aged inventories, improving overall stock levels throughout the Company, and providing real-time facilitation of the Company's branches in selling higher cost inventory, as well as its focus to excel in its highly accretive core product lines to the exclusion of low-margin, working capital intensive opportunities, it is in a better position to react quickly to variability in end-market demand and to manage the impact that demand variability might have on operating margins.

Industry data provided by the Metals Service Center Institute (“MSCI”) indicates that overall 2019 U.S. steel service center shipment volumes decreased 7% compared to 2018 levels. According to MSCI data, industry sales volumes of products consistent with the Company's product mix decreased 11% in 2019 compared to 2018. Of the U.S. steel service center products tracked by the MSCI, shipment volumes for all of the products decreased in 2019 compared to 2018 with carbon bars, carbon plate, and carbon pipe and tube having the most significant decreases.

Despite the decrease in sales volume due to the softening of the industrial end market, the Company's gross material margin, calculated as net sales less cost of materials (exclusive of depreciation) divided by net sales, was 25.2% in the year ended December 31, 2019, compared to a gross material margin of 24.9% in the prior year. The Company believes the slight improvement in gross material margin while in challenging market conditions is a result of a focus on highly accretive sales, particularly sales including higher margin value added service offerings. The Company expects its margins will remain stable in 2020 as its improved inventory management offsets the headwinds produced by reduced demand and a downward pricing environment.

Current Business Outlook

The Company is principally focused on two key global markets, aerospace and industrial.

The aerospace market continues to be strong with defense and commercial spending driving the demand for the Company's aluminum, stainless, and titanium products. The Company expects the aerospace market to remain robust, particularly where the Company has long-term contracts with subcontractors who support platforms that are anticipated to grow. However, the Company does anticipate continued pressure on transactional pricing resulting from competition in the market.

The industrial end markets the Company serves are expected to remain extremely competitive in the near term with some demand and pricing headwinds from the second half of 2019 continuing into 2020. Given the Company's lower cost structure, which is the result of its restructuring activities, it does see an opportunity to continue to grow market share by continuing to improve its conversion rate on transactional business on a competitive basis at still accretive net margins.

Uncertainty around the imposition of tariffs or duties on the import of steel or aluminum, as well as the ongoing negotiation of trade deals between the U.S. government and foreign nations, is expected to contribute to a competitive pricing environment in 2020. Particular to the aerospace end market, uncertainty regarding the return to service of the Boeing 737 MAX could lead to additional competition in the pricing of aluminum. Largely favorable commodity pricing is expected to continue in the near-term, although the Company also expects U.S. mill pricing to increase, resulting in higher material costs. However, given its long-standing relationships with domestic steel mills, the Company also believes it is currently well-positioned to take advantage of an increasing pricing environment expected to result from the tariffs and may have a competitive price advantage relative to other U.S.-based steel service centers that are more reliant on imported steel and aluminum products.

RESULTS OF OPERATIONS

Our discussion of comparative period results is based upon the following components of the Company’s Consolidated Statements of Operations and Comprehensive Loss.

Net Sales — The Company derives its sales from the processing and delivery of metals. Pricing is established with each customer order and includes charges for the material, processing activities and delivery. The pricing varies by product line and type of processing. From time to time, the Company may enter into fixed price arrangements with customers while simultaneously obtaining similar agreements with its suppliers.

Cost of Materials — Cost of materials consists of the costs that the Company pays suppliers for metals and related inbound and transfer freight charges, excluding depreciation, which is included in operating costs and expenses discussed below.

Operating Costs and Expenses — Operating costs and expenses primarily consist of:

Year ended December 31, 2019 compared to the year ended December 31, 2018

The following table sets forth certain statement of operations data in each year indicated:

Net Sales

Net sales of $559.6 million in the year ended December 31, 2019 were a decrease of $22.4 million, or 3.8%, compared to $582.0 million in the year ended December 31, 2018. The decrease in net sales in the current year compared to the prior year was driven primarily by a decrease in tons sold per day, partially offset by an increase in selling prices and a favorable sales mix. Tons sold per day decreased 19.1% in the year ended December 31, 2019 compared to the prior year driven primarily by decreased sales volumes of carbon flat roll, alloy bar, SBQ bar, and stainless, partially offset by an increase in told sold per day of aluminum products. In the third quarter of 2019, the Company made the strategic decision to exit a portion of the carbon flat-roll market served by one of its Mexican operations.

Although metals prices declined more than expected in the second half of the year, particularly in the North American industrial end markets, overall pricing within the metals market continued to have a positive impact on the Company's selling prices throughout 2019. Overall, average selling prices of the Company's product mix sold increased 19.3% in the year ended December 31, 2019, compared to the prior year with favorable selling prices realized on the majority of the commodities that the Company sells. The most favorable selling prices were realized on the Company's highest selling commodities, including carbon and alloy plate, alloy bar, stainless, SBQ bar, and aluminum.

Cost of Materials

Cost of materials (exclusive of depreciation) was $418.8 million in the year ended December 31, 2019 compared to $437.1 million in the year ended December 31, 2018. The year ended December 31, 2019 included a one-time

$1.3 million noncash charge for the write-down of inventory recorded in the third quarter of 2019 in conjunction with the Company's decision to exit a portion of the carbon flat-roll market served by one of its Mexican operations (“Mexican inventory write-down”). The $18.3 million, or 4.2%, decrease in the year ended December 31, 2019 compared to the year ended December 31, 2018 was primarily due to the decrease in net sales volume compared to the prior year, partially offset by the Mexican inventory write-down.

Cost of materials (exclusive of depreciation) was 74.8% of net sales in the year ended December 31, 2019, compared to 75.1% of net sales in the year ended December 31, 2018. Ongoing strength in commodity pricing and the Company's focus on selectively pursuing higher margin sales that are accretive to the business, particularly those including the Company's value added service offerings, resulted in favorable product mix towards sales of products with higher gross material margins (calculated as net sales less cost of materials divided by net sales) in the year ended December 31, 2019, compared to the year ended December 31, 2018.

Operating Costs and Expenses and Operating Loss

Operating costs and expenses in the year ended December 31, 2019 and in the year ended December 31, 2018 were as follows:

Total operating costs and expenses decreased by $10.8 million to $150.9 million in the year ended December 31, 2019 from $161.7 million in the year ended December 31, 2018:

Operating loss in the year ended December 31, 2019 was $10.1 million, compared to $16.7 million in the year ended December 31, 2018.

Other Income and Expense, Income Taxes and Net Loss

Interest expense, net was $39.9 million in the year ended December 31, 2019, compared to $33.2 million in the year ended December 31, 2018. Interest expense includes the interest cost component of the net periodic benefit cost of the Company's pension and post-retirement benefits of $5.3 million in the year ended December 31, 2019 and $4.9 million in the year ended December 31, 2018. The increase in interest expense in year ended December 31, 2019, compared to the prior year is primarily due to an increase in non-cash amortization of the Convertible Senior Secured Paid-in-Kind (“PIK”) Toggle Notes due 2022 (the “Second Lien Notes”) discount. Also contributing to the increase in interest expense in the year ended December 31, 2019 is a full 12-months of non-cash interest expense on the Company's $25.0 million revolving credit facility entered into in June 2018 (see Note 2 - Debt, in the Notes to the Consolidated Financial Statements).

Other income, net, was $6.6 million in the year ended December 31, 2019, compared to $8.0 million in the year ended December 31, 2018. Included in other income, net in the year ended December 31, 2019 and December 31, 2018 was net pension benefit of $6.1 million and $7.9 million, respectively. The remaining other

income, net for the comparative periods is comprised of foreign currency transaction gains. The Company recorded a foreign currency transaction gain of $0.5 million in the year ended December 31, 2019, compared to a foreign currency transaction gain of $0.1 million in the year ended December 31, 2018.

The Company recorded an income tax benefit of $4.9 million in the year ended December 31, 2019, compared to an income tax benefit of $4.8 million in the year ended December 31, 2018. The Company’s effective tax rate is expressed as income tax expense benefit as a percentage of loss before income taxes. The effective tax rate was 11.3% in the year ended December 31, 2019 and 11.4% in the year ended December 31, 2018. The change in the effective tax rate between periods resulted from changes in the geographic mix and timing of income (losses) and the inability to benefit from current year losses due to valuation allowance positions in the U.S.

Net loss was $38.5 million in the year ended December 31, 2019, compared to $37.1 million in the year ended December 31, 2018.

Liquidity and Capital Resources

Cash and cash equivalents increased (decreased) as follows:

The Company’s principal sources of liquidity are cash provided by operations and proceeds from borrowings under its revolving credit facilities.

Specific components of the change in working capital (defined as current assets less current liabilities) are highlighted below:

Net cash used in investing activities of $3.6 million and $5.6 million in the year ended December 31, 2019 and December 31, 2018, respectively, was almost entirely the result of cash paid for capital expenditures in each period.

Net cash used in financing activities of $9.6 million in the year ended December 31, 2019 was mainly attributable to repayments of borrowings under the Company's ABL Credit Agreement (defined below) as well as repayments of short-term borrowings under the Company's local credit facilities. Net cash from financing

activities of $27.3 million in the year ended December 31, 2018 was attributable to net proceeds from borrowings under the Company's ABL Credit Agreement (defined below), partially offset by payments of $0.9 million made in connection with the Company's build-to-suit liability associated with its warehouse in Janesville, WI.

Capital Resources

On August 31, 2017, the Company entered into the Revolving Credit and Security Agreement with PNC Bank, National Association (“PNC”) as lender and as administrative and collateral agent (the “Agent”), and other lenders party thereto (the “Original ABL Credit Agreement”). The Original ABL Credit Agreement provided for a $125.0 million senior secured, revolving credit facility (the “Revolving A Credit Facility”), under which the Company and four of its subsidiaries each are borrowers (collectively, in such capacity, the “Borrowers”). The obligations of the Borrowers have been guaranteed by the subsidiaries of the Company named therein as guarantors. On June 1, 2018, the Company entered into an Amendment No. 1 to ABL Credit Agreement (the “Credit Agreement Amendment”) by and among the Company, the Borrowers and guarantors party thereto and the Agent and the other lenders party thereto, which amended the Original ABL Credit Agreement (as amended by the Credit Agreement Amendment, the “ABL Credit Agreement”) to provide for additional borrowing capacity. The ABL Credit Agreement provides for an additional $25.0 million last out Revolving B Credit Facility (the “Revolving B Credit Facility” and together with the Revolving A Credit Facility, the “Credit Facility”) made available in part by way of a participation in the Revolving B Credit Facility by certain of the Company’s stockholders. Borrowings under the Credit Facility will mature on February 28, 2022.

Subject to certain exceptions and permitted encumbrances, the obligations under the ABL Credit Agreement are secured by a first priority security interest in substantially all of the assets of each of the Borrowers and certain subsidiaries of the Company that are named as guarantors. The proceeds of the advances under the ABL Credit Agreement may only be used to (i) pay certain fees and expenses to the Agent and the lenders under the ABL Credit Agreement, (ii) provide for the Borrowers' working capital needs and reimburse drawings under letters of credit, (iii) repay the obligations under the Debtor-in-Possession Revolving Credit and Security Agreement dated as of July 10, 2017, by and among the Company, the lenders party thereto, and PNC, and certain other existing indebtedness, and (iv) provide for the Borrowers' capital expenditure needs, in accordance with the ABL Credit Agreement.

The Company may prepay its obligations under the ABL Credit Agreement at any time without premium or penalty, and must apply the net proceeds of material sales of collateral in prepayment of such obligations. Payments made must be applied to the Company's obligations under the Revolving A Credit Facility, if any, prior to its obligations under the Revolving B Credit Facility. In connection with an early termination or permanent reduction of the Revolving A Credit Facility prior to June 1, 2020, a 0.25% fee shall be due for the period from June 1, 2019 through May 31, 2020, in the amount of such commitment reduction, subject to reduction as set forth in the ABL Credit Agreement. Indebtedness for borrowings under the ABL Credit Agreement is subject to acceleration upon the occurrence of specified defaults or events of default, including (i) failure to pay principal or interest, (ii) the inaccuracy of any representation or warranty of a loan party, (iii) failure by a loan party to perform certain covenants, (iv) defaults under indebtedness owed to third parties, (v) certain liability producing events relating to ERISA, (vi) the invalidity or impairment of the Agent’s lien on its collateral or of any applicable guarantee, and certain adverse bankruptcy-related and (vii) certain adverse bankruptcy-related and other events.

Interest on indebtedness under the Revolving A Credit Facility accrues at a variable rate based on a grid with the highest interest rate being the applicable LIBOR-based rate plus a margin of 3.0%, as set forth in the ABL Credit Agreement. Interest on indebtedness under the Revolving B Credit Facility accrues at a rate of 12.0% per annum, which will be paid-in-kind unless the Company elects to pay such interest in cash and the Revolving B payment conditions specified in the ABL Credit Agreement are satisfied. Additionally, the Company must pay a monthly facility fee equal to the product of (i) 0.25% per annum (or, if the average daily revolving facility usage is less than 50% of the maximum revolving advance amount of the Credit Facility, 0.375% per annum) multiplied by (ii) the amount by which the maximum advance amount of the Credit Facility exceeds such average daily Credit Facility usage for such month.

Under the ABL Credit Agreement, the maximum borrowing capacity of the Revolving A Credit Facility is based on the Company's borrowing base calculation. As of December 31, 2019, the weighted average advance rates used in the borrowing base calculation are 85.0% on eligible accounts receivable and 70.4% on eligible inventory.

The Company's ABL Credit Agreement contains certain covenants and restrictions customary to an asset-based revolving loan.

The Company's ABL Credit Agreement contains a springing financial maintenance covenant requiring the Company to maintain a Fixed Charge Coverage Ratio of 1.0 to 1.0 in any Covenant Testing Period (as defined in the ABL Credit Agreement) when the Company's cash liquidity (as defined in the ABL Credit Agreement) is less than $12.5 million for five consecutive days. The Company was not in a Covenant Testing Period as of and for the year ended December 31, 2019.

Additionally, upon the occurrence and during the continuation of an event of default or upon the failure of the Company to maintain cash liquidity (as defined in the ABL Credit Agreement, inclusive of certain cash balances and the additional unrestricted borrowing capacity shown below) in excess of $12.5 million, the lender has the right to take full dominion of the Company’s cash collections and apply these proceeds to outstanding loans under the ABL Credit Agreement (“Cash Dominion”). Based on the Company's cash projections, it does not anticipate that Cash Dominion will occur, or that it will be in a Covenant Testing Period during the next 12 months.

Our ability to borrow funds is dependent on our ability to maintain an adequate borrowing base. Accordingly, if we do not generate sufficient cash flow from operations to fund our working capital needs and planned capital expenditures, and our availability is depleted, we may need to take further actions, such as reducing or delaying capital investments, strategic investments or other actions. We believe that our existing cash balances, together with our availability under the ABL Credit Agreement, will be sufficient to fund our normal business operations over the next twelve months from the issuance of this report. However, there can be no assurance that we will be able to achieve our strategic initiatives or obtain additional funding on favorable terms in the future which could have a significant adverse effect on our operations.

Additional unrestricted borrowing capacity under the Revolving A Credit Facility at December 31, 2019 was as follows (in millions):

Also on August 31, 2017, the Company entered into an indenture (the “Second Lien Notes Indenture”) with Wilmington Savings Fund Society, FSB, as trustee and collateral agent (“Indenture Agent”) and, pursuant thereto, issued approximately $164,902 in aggregate principal amount of Second Lien Notes, including $2,400 of restricted Second Lien Notes issued to certain members of the Company's management. The Second Lien Notes are five-year senior obligations of the Company and certain of its subsidiaries, secured by a lien on all or substantially all of the assets of the Company, its domestic subsidiaries and certain of its foreign subsidiaries, which lien the Indenture Agent has agreed will be junior to the lien of the Agent under the ABL Credit Agreement.

The Second Lien Notes are convertible into shares of the Company’s common stock at any time at the initial conversion price of $3.77 per share, which rate is subject to adjustment as set forth in the Second Lien Notes Indenture. Under the Second Lien Notes Indenture, upon the conversion of the Second Lien Notes in connection with a Fundamental Change (as defined in the Second Lien Notes Indenture), for each $1.00 principal amount of the Second Lien Notes, that number of shares of the Company’s common stock issuable upon conversion shall equal the greater of (a) $1.00 divided by the then applicable conversion price or (b) $1.00 divided by the price paid per share of the Company's common stock in connection with such Fundamental Change calculated in accordance with the Second Lien Notes Indenture, subject to other provisions of the Second Lien Notes

Indenture. Subject to certain exceptions, under the Second Lien Notes Indenture a “Fundamental Change” includes, but is not limited to, the following: (i) the acquisition of more than 50% of the voting power of the Company’s common equity by a “person” or “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended; (ii) the consummation of any recapitalization, reclassification, share exchange, consolidation or merger of the Company pursuant to which the Company’s common stock will be converted into cash, securities or other property; (iii) the “Continuing Directors” (as defined in the Second Lien Notes Indenture) cease to constitute at least a majority of the board of directors; and (iv) the approval of any plan or proposal for the liquidation or dissolution of the Company by the Company’s stockholders.

Upon conversion, the Company will pay and/or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election, together with cash in lieu of fractional shares. The value of shares of the Company’s common stock for purposes of the settlement of the conversion right, if the Company elects to settle in cash, will be calculated as provided in the Second Lien Notes Indenture, using a 20 trading day observation period.

The terms of the Second Lien Notes contain numerous covenants imposing financial and operating restrictions on the Company’s business. These covenants place restrictions on the Company’s ability and the ability of its subsidiaries to, among other things, pay dividends, redeem stock or make other distributions or restricted payments; incur indebtedness or issue certain stock; make certain investments; create liens; agree to certain payment restrictions affecting certain subsidiaries; sell or otherwise transfer or dispose assets; enter into transactions with affiliates; and enter into sale and leaseback transactions.

The Second Lien Notes may not be redeemed by the Company in whole or in part at any time, except the Company may be required to make an offer to purchase Second Lien Notes using the proceeds of certain material asset sales involving the Company or one of its restricted subsidiaries, as described more particularly in the Second Lien Notes Indenture. In addition, if a Fundamental Change occurs at any time, each holder of any Second Lien Notes has the right to require the Company to repurchase such holder’s Second Lien Notes for cash at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest thereon, subject to certain exceptions.

Indebtedness for borrowings under the Second Lien Notes Indenture is subject to acceleration upon the occurrence of specified defaults or events of default, including failure to pay principal or interest, the inaccuracy of any representation or warranty of any obligor under the Second Lien Notes, failure by an obligor under the Second Lien Notes to perform certain covenants, the invalidity or impairment of the Indenture Agent’s lien on its collateral or of any applicable guarantee, and certain adverse bankruptcy-related and other events.

Upon satisfaction of certain conditions more particularly described in the Second Lien Notes Indenture, including the deposit in trust of cash or securities sufficient to pay the principal of and interest and any premium on the Second Lien Notes, the Company may effect a covenant defeasance of certain of the covenants imposing financial and operating restrictions on the Company’s business. In addition, and subject to certain exceptions as more particularly described in the Second Lien Notes Indenture, the Company may amend, supplement or waive provisions of the Second Lien Notes Indenture with the consent of holders representing a majority in aggregate principal amount of the Second Lien Notes, and may in effect release collateral from the liens securing the Second Lien Notes with the consent of holders representing 66-2/3% in aggregate principal amount of the Second Lien Notes.

Interest on the Second Lien Notes accrues at the rate of 5.00% if paid in cash and at the rate of 7.00% if paid in kind. Pursuant to the terms of the Second Lien Note Indenture, the Company is currently paying interest on the Second Lien Notes in kind.

In July 2017, the Company's French subsidiary entered into a local credit facility under which it may borrow against 100% of the eligible accounts receivable factored, with recourse, up to €6.50 million, subject to factoring fees and floating Euribor or LIBOR interest rates, plus a 1.0% margin. The French subsidiary utilizes the local credit facility to support its operating cash needs. As of December 31, 2019, the French subsidiary has borrowings of $2.9 million under its credit facility, which is recorded as short-term borrowings at the Consolidated Balance Sheets.

Interest expense, net was $39.9 million in the year ended December 31, 2019, of which $27.9 million was non-cash interest related to long term debt and $5.3 million was non-cash interest related to the pension plan.

As of December 31, 2019, the Company had $2.4 million of irrevocable letters of credit outstanding.

The Company's debt agreements impose significant operating and financial restrictions which may prevent the Company from executing certain business opportunities, such as making acquisitions or paying dividends, among other things.

The Company is committed to achieving a strong financial position while maintaining sufficient levels of available liquidity, managing working capital and monitoring the Company’s overall capitalization. Cash and cash equivalents at December 31, 2019 were $6.4 million, with approximately $1.2 million of the Company’s consolidated cash and cash equivalents balance residing in the United States.

Working capital, defined as current assets less current liabilities, and the balances of its significant components were as follows:

The Company currently plans that it will have sufficient cash flows from its operations to continue as a going concern.

Capital Expenditures

Cash paid for capital expenditures was $4.0 million in the year ended December 31, 2019 and $5.7 million in the year ended December 31, 2018. Expenditures in 2019 include $1.3 million related to IT equipment upgrades and software licenses. The balance of the capital expenditures in 2019 is the result of normal equipment purchases, building improvements, and furniture and fixture upgrades throughout the year. Management believes that capital expenditures will be approximately $6.0 million to $7.5 million in 2020.

Pension Funding

The Company’s funding policy on its defined benefit pension plans is to satisfy the minimum funding requirements of the Employee Retirement Income Security Act (“ERISA”). Future funding requirements are dependent upon various factors outside the Company’s control including, but not limited to, fund asset performance and changes in regulatory or accounting requirements. Based upon factors known and considered as of December 31, 2019, including the funding requirements under ERISA, the Company does not anticipate making significant cash contributions to the pension plans in 2020.

The investment target portfolio allocation for the Company-sponsored pension plans and supplemental pension plan focuses primarily on corporate fixed income securities that match the overall duration and term of the Company’s pension liability structure. Refer to “Retirement Plans” within Critical Accounting Policies and Note 7 — Employee Benefit Plans to the consolidated financial statements for additional details regarding other plan assumptions.

Off-Balance Sheet Arrangements

As of December 31, 2019, the Company does not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures, or capital resources, that are material to investors.

Critical Accounting Policies

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, and include amounts that are based on management’s estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The following is a description of the Company’s accounting policies that management believes require the most significant judgments and estimates when preparing the Company’s consolidated financial statements:

Income Taxes — The Company accounts for income taxes using the asset and liability method, under which deferred income tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company regularly reviews deferred tax assets to assess whether it is more-likely-than-not that the deferred tax assets will be realized and, if necessary, establish a valuation allowance for portions of such assets to reduce the carrying value.

For purposes of assessing whether it is more-likely-than-not that deferred tax assets will be realized, the Company considers the following four sources of taxable income for each tax jurisdiction: (a) future reversals of existing taxable temporary differences, (b) projected future earnings, (c) taxable income in carryback years, to the extent that carrybacks are permitted under the tax laws of the applicable jurisdiction, and (d) tax planning strategies, which represent prudent and feasible actions that a company ordinarily might not take, but would take to prevent an operating loss or tax credit carryforward from expiring unused. To the extent that evidence about one or more of these sources of taxable income is sufficient to support a conclusion that a valuation allowance is not necessary, other sources need not be considered. Otherwise, evidence about each of the sources of taxable income is considered in arriving at a conclusion about the need for and amount of a valuation allowance. See Note 8 - Income Taxes in the Notes to the Consolidated Financial Statements, for further information about the Company's valuation allowance assessments.

The Company has incurred significant losses in recent years. The Company’s operations in the United States, Canada and the United Kingdom (prior to ceasing operations in 2019) have generated pre-tax losses for the three-year period ended December 31, 2019. The Company has determined that an ownership shift of greater than fifty percent occurred in 2015, 2016 and 2017 and as such, a significant portion of the pre-ownership shift net operating losses in these jurisdictions are subject to an annual utilization limitation under the Internal Revenue Code section 382 that will act to prevent the Company from utilizing most of its losses against future taxable income. As a result of the Company having recorded deferred tax assets in these jurisdictions as December 31, 2019 and December 31, 2018, coupled with the negative evidence of significant cumulative three-year pre-tax losses, the Company has provided a valuation allowance against the full net deferred tax asset balances recorded in Canada and the United Kingdom and certain of the deferred income tax assets recorded by the United States operations at December 31, 2019.

The Company is subject to taxation in the United States, various states and foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related income tax assets and liabilities. It is possible that actual results could differ from the estimates that management has used to determine its consolidated income tax expense.

The Company accounts for uncertainty in income taxes by recognizing the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not criteria, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Retirement Plans — The Company values retirement plan liabilities based on assumptions and valuations established by management. Future valuations are subject to market changes, which are not in the control of the Company and could differ materially from the amounts currently reported. The Company evaluates the discount rate and expected return on assets at least annually and evaluates other assumptions involving demographic factors, such as retirement age, mortality and turnover periodically, and updates them to reflect actual experience and expectations for the future. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors.

Accumulated and projected benefit obligations are expressed as the present value of future cash payments which are discounted using the weighted average of market-observed yields for high quality fixed income securities with maturities that correspond to the payment of benefits. Lower discount rates increase present values and

subsequent-year net periodic pension cost; higher discount rates decrease present values and subsequent-year net periodic pension cost. Discount rates used for determining the Company’s projected benefit obligation for its pension plans were 2.99% - 3.11% at December 31, 2019 and 4.00% - 4.06% at December 31, 2018.

The Company’s pension plan asset portfolio as of December 31, 2019 is primarily invested in fixed income securities with a duration of approximately 11 years. The assets generally fall within Level 2 of the fair value hierarchy. In 2019, the pension plan assets realized an investment gain of approximately 17%. The target investment asset allocation for the pension plans’ funds focuses primarily on corporate fixed income securities that match the overall duration and term of the Company’s pension liability structure. There was a funding surplus of less than 0.2% at December 31, 2019 compared to a funding deficit of 2.3% at December 31, 2018.

To determine the expected long-term rate of return on the pension plans’ assets, current and expected asset allocations are considered, as well as historical and expected returns on various categories of plan assets.

The Company used the following weighted average discount rates and expected return on plan assets to determine the net periodic pension cost:

Holding all other assumptions constant, the following table illustrates the sensitivity of changes to the discount rate and long-term rate of return assumptions on the Company’s net periodic pension cost:

Inventories — Inventories are stated at the lower of cost or net realizable value. The net realizable value of metals is subject to volatility. During periods when open-market prices decline below net book value, we may need to record a provision to reduce the carrying value of our inventory. We analyze the carrying value of inventory for impairment if circumstances indicate impairment may have occurred. If impairment occurs, the amount of impairment loss is determined by measuring the excess of the carrying value of inventory over the net realizable value of inventory.

The Company maintains an allowance for excess and obsolete inventory. The excess and obsolete inventory allowance is determined through the specific identification of material, adjusted for expected scrap value to be received, based upon product knowledge, estimated future demand, market conditions and an aging analysis of the inventory on hand. Inventory in excess of our estimated usage requirements is written down to its estimated net realizable value. Although the Company believes its estimates of the inventory allowance are reasonable, actual financial results could differ from those estimates due to inherent uncertainty involved in making such estimates. Changes in assumptions around the estimated future demand, selling price, scrap value, a decision to reduce inventories to increase liquidity, or other underlying assumptions could have a significant impact on the carrying value of inventory, future inventory impairment charges, or both.

New Accounting Standards

See Note 1 - Basis of Presentation and Significant Accounting Policies to the Notes to the Consolidated Financial Statements for detailed information on recently issued guidance, whether adopted or to be adopted.

CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Stock Ownership

The definitions of any terms defined in this section shall only apply herein.

Directors, Director Nominees and Management

The following table sets forth the number of shares and percentage of the Company’s common stock that was owned beneficially as of February 24, 2020, by each of the Company’s directors and director nominees, each current member of Executive Management, and by all directors, director nominees and executive management as a group, with each person having sole voting and dispositive power except as indicated:

Principal Stockholders

The only persons who held of record or, to the Company’s knowledge (based on the review of Schedules 13D, 13F and 13G, and amendments thereto), owned beneficially more than 5% of the outstanding shares of the Company’s common stock as of February 24, 2020, are set forth below, with each person having sole voting and dispositive power except as indicated:

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Information About Our Executive Officers

The following selected information for each of our current executive officers (as defined by regulations of the SEC) was prepared as of March 16, 2020.

Information About Our Directors

The following selected information for each of our current directors was prepared as of March 16, 2020.

Director Independence; Financial Expert

While the Company’s stock is currently traded on the OTCQX market, which requires the Company to establish and maintain fundamental corporate governance standards, the Company has elected to adopt more exacting governance standards that are substantially similar to the NASDAQ listing standards. The Board has affirmatively determined that each current Board member, except for Mr. Edgar, is “independent” within the definitions contained in the current NASDAQ listing standards and the standards set by the Board in the Company’s Corporate Governance Guidelines. Furthermore, the Board has determined that all members of the Company’s Audit Committee meet the financial sophistication requirements of the NASDAQ listing standards. The Board has determined that Mr. Brodsky qualifies as an “audit committee financial expert” for purposes of the SEC rules.

Non Employee Director Compensation

Cash Compensation

The Company’s director compensation program provides that the cash compensation paid to, or earned by, its non-employee directors will be comprised of the following components:

Equity-Based Compensation

No equity-based compensation was paid to the Company’s non-employee directors in 2019.

Other Compensation

Reimbursement is made for travel and accommodation expenses incurred to attend meetings and participate in other corporate functions and for the cost of attending one director continuing education program annually. For each director, the Company pays and maintains coverage for personal excess liability, business travel and accident, and director and officer liability insurance policies.

Director Compensation Table – Fiscal Year 2019

The following table summarizes the compensation paid to or earned by the non-employee directors for 2019. Any employee of the Company who serves as a director receive no additional compensation for service as a director.

EXECUTIVE COMPENSATION

Executive Compensation

In this section, the Company describes its compensation programs and policies and the material elements of compensation for the year ended December 31, 2019, for its Chief Executive Officer, the principal executive officer (“PEO”), and its two most highly compensated executive officers (other than the PEO) serving as executive officers at the end of 2019 whose total compensation was in excess of $100,000. Compensation information is reported as of December 31, 2019, but the Company notes that subsequently, effective as of January 1, 2020, Mr. Scheinkman retired as Chief Executive Officer and Mr. Edgar was appointed President and Chief Executive Officer of the Company. The Company refers to all individuals whose executive compensation is disclosed in this section as its Named Executive Officers (collectively, the “Named Executive Officers”).

Compensation Consultant

The Human Resources Committee has periodically engaged Willis Towers Watson (“Willis”) to consult regarding executive officer and director compensation. The Human Resouces Committee conducted an independence review in 2019 regarding its engagement of Willis and concluded that Willis is independent.

The Company’s compensation consultant provides advice to the Human Resources Committee on an as-request basis as follows:

Summary Compensation Table

The table below includes the total compensation paid to or earned by each of the Named Executive Officers for the fiscal years ended December 31, 2019, and 2018.

All Other Compensation Table – Fiscal Year 2019

The table below provides additional information about the amounts that appear in the “All Other Compensation” column in the Summary Compensation Table above:

Elements of Compensation

The Company has three elements of total direct compensation: base salary, annual incentives, and long-term incentives, which are described in the following table. The Company also provides the Named Executive Officers with limited perquisites and standard retirement and benefit plans (see the sections below entitled “Retirement Benefits” and “Perquisites and Other Personal Benefits”).

Base Salary

With the exception of the CEO, whose compensation was reviewed and recommended by the Human Resources Committee and approved by the independent members of the Board, the Human Resources Committee reviewed and approved the base salaries of the Named Executive Officers in 2019. In each case, the Human Resources Committee took into account the CEO’s recommendation, as well as experience, internal equity, the performance of each Named Executive Officer during the year, and external competitive compensation data, among other factors. Fixed compensation recognizes individual performance, seniority, scope of responsibilities, leadership skills, experience, and succession planning considerations.

Annual Incentives

Annual incentives are awarded under the Company’s Short-Term Incentive Program (“STIP”) and are subject to the terms of the A. M. Castle & Co. 2017 Management Incentive Plan (“MIP”). The purpose of the STIP is to provide variable compensation based on Company performance against annually established key operational and financial measures, as well as individual performance. Metrics and targets under the STIP are evaluated each year for alignment with business strategy.

STIP and One-Time Award Payouts

For the 2019 STIP, the Board approved a plan for the Named Executive Officers that focused on management’s performance in relation to the Company’s operating plan for 2019, as approved and revised throughout the year, with key achievement criteria to include, among other things, top-line revenue performance, margin expansion, growth in highly-accretive product lines and value-added services, improved cash generation and working capital management, and overall EBITDA performance. For the 2018 STIP, the Board approved a plan for the Named Executive Officers that focused on three metrics: (1) top-line revenue performance; (2) EBITDA performance; and (3) net working capital improvement performance. Based on the Company’s overall performance in 2018, the Human Resources Committee and full Board previously exercised their discretion, in accordance with the STIP plan, to adjust the 2018 STIP payouts downward.

In 2019 the Human Resources Committee and full Board exercised its discretion under the 2017 Management Incentive Plan, to make one-time discretionary cash incentive awards to management in light of sustained and material improvements in the Company’s working capital management beginning in late 2018 and continuing into 2019. Based on the Company’s overall performance in 2019, the Human Resources Committee and full Board exercised their discretion, in accordance with the STIP plan, to award 2019 STIP payouts at approximately 50% of target, subject to discretionary adjustments.

2017 Management Incentive Plan

At the Company’s emergence from restructuring proceedings on August 31, 2017, the MIP became effective. The Human Resources Committee administers the MIP and has broad authority under the MIP, among other things, to: (i) select participants; (ii) determine the terms and conditions, not inconsistent with the MIP, of any award granted under the MIP; (iii) determine the number of shares of the Company’s common stock to be covered by each award granted under the MIP; and (iv) to determine the fair market value of awards granted under the MIP. Persons eligible to receive awards under the MIP include officers and employees of the Company and its subsidiaries. The types of awards that may be granted under the MIP include stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares, and other forms of cash or stock based awards.

The Company grants long-term incentive awards under the MIP to the Named Executive Officers to reward performance over a multi-year time period. Equity-based compensation remains an important component of the Company’s overall compensation strategy to align the interests of the Named Executive Officers with the interests of its stockholders and serves as an important tool for the Company with respect to attracting and retaining executive talent.

Retirement Benefits

The following retirement plans are generally available to all non-union, salaried employees, including the Named Executive Officers:

The Company also maintains the following plan that is available to a limited number of senior management employees, including the Named Executive Officers:

Perquisites and Other Personal Benefits

The Company provides the following limited perquisites to the Named Executive Officers: automobile usage or stipends; phone allowances; personal excess liability coverage policy; reimbursement of spousal travel expenses on Company business in certain limited instances; and medical, dental, life insurance, short-term, and long-term disability coverage (standard benefits available to most of its employees). In 2018 and 2019, Mr. Scheinkman, who is required to maintain a residence in Chicago as CEO of the Company, was provided a monthly living allowance towards living expenses.

Employment-Related Agreements

To assure stability and continuity of management, the Company has entered into Amended and Restated Employment Agreements with each of the Named Executive Officers (each, an “Employment Agreement”). Mr. Scheinkman’s Employment Agreement had been dated May 15, 2017, but terminated upon Mr. Scheinkman’s

retirement as CEO effective as of January 1, 2020 pursuant to the terms of the Retirement Agreement and Release, dated January 7, 2020, between the Company and Mr. Scheinkman. Mr. Edgar’s Employment Agreement, previously dated as of December 14, 2018 in connection with his appointment to the office of President, was subsequently amended and restated on January 7, 2020 in connection with his appointment to the office of President and CEO effective as of January 1, 2020. Mr. Anderson’s Employment Agreements was entered into on May 15, 2017.

Executive Compensation Philosophy

Each year, the Human Resources Committee reviews and approves the Company's overall Compensation Philosophy and Strategy. Pay for performance is an essential element of the Company's executive compensation philosophy. The Company’s executive compensation programs are designed so that a significant portion of an executive’s compensation is dependent upon the performance of the Company. Measures of financial performance for short-term and long-term incentive programs, and the use of equity, are intended to align compensation with the creation of stockholder value. Target and maximum performance goals under incentive programs are selected so as to generate target or maximum payouts, commensurate with performance, respectively.

These programs are designed to provide a total compensation opportunity for the Named Executive Officers that is competitive with the total compensation opportunity offered to executives with similar responsibilities at comparable companies, also known as the “market median guideline.” Actual compensation will differ from the targeted opportunity based on actual Company performance. Total compensation is the aggregate of the following categories: (i) base salary; (ii) short-term incentive compensation; and (iii) long-term incentive compensation. In reviewing the Named Executive Officers’ target total cash compensation and total direct compensation opportunities, the Human Resources Committee generally uses the fiftieth percentile of the competitive market data (“market median,” as described below) as a guideline. Other factors considered by the Human Resources Committee in setting each Named Executive Officer’s opportunity are experience, internal equity (rational linkage between job responsibilities and total compensation opportunities across all jobs within the Company), individual executive performance, and the alignment between Company performance and executive pay.

Executive Compensation Process

Oversight of the Executive Compensation Programs

The Human Resources Committee oversees the Company’s executive compensation programs, operating under a charter that is reviewed annually and approved by the Board. All members of the Human Resources Committee are required to be independent under the NASDAQ listing standards definitions of “Independence”. The Human Resources Committee seeks the assistance of an executive compensation consultant, who is engaged periodically and is also independent of the Company and management.

Process for the CEO

Early each year, the Board meets in executive session with the CEO to discuss the CEO's prior year performance, and to identify tentative goals for the upcoming year.

As with the process for the other Named Executive Officers, the Human Resources Committee considers individual performance, Company performance, and the analysis of its compensation consultant, as requested, when setting the CEO’s compensation. The Human Resources Committee develops recommendations for CEO compensation for the upcoming year for consideration by the Board.

The Board meets annually, without the CEO present, to consider the recommendations of the Human Resources Committee, determine any compensation adjustments applicable to the CEO, and finalize the CEO's goals and objectives for the upcoming year. The independent members of the Board then meet with the CEO.

Process for Executives other than the CEO

The Company utilizes a formal performance management process to establish goals for its executive officers, including the Named Executive Officers, and to evaluate management performance. The Human Resources Committee annually reviews the performance of the executive officers with the CEO and the CEO’s recommendation for any changes in the executive officers’ compensation.

The CEO's performance review of the executive officers addresses each executive's performance relative to established financial and personal objectives and specific project assignments, and includes a review of the following leadership competencies:

In addition to the reviews of individual executive performance, the Human Resources Committee takes into account the overall performance of the Company (as related to the short term and long term incentive plans), as well as the analysis and findings of its executive compensation consultant, as requested, regarding market pay levels and practices.

The Human Resources Committee also reviews and approves the material terms of any employment, severance, and change-in-control agreements with the Named Executive Officers, with a view to approving terms that are competitive in the marketplace and that serve to attract, motivate and retain executives.

Benchmarking

In order to establish the market median guideline, the Human Resources Committee reviews competitive market compensation data periodically, including industry compensation data provided by its executive compensation consultant as requested. In 2019 and 2018, the Human Resources Committee’s executive compensation consultant assembled market pay data from published executive compensation surveys including Willis Towers Watson 2017 CBD Executive Compensation Survey, Willis Towers Watson 2017 CSR Executive Compensation Survey and Mercer 2017 MBD Executive Compensation Survey. The survey data was scoped to reflect practices of organizations in the manufacturing industry and were regressed to reflect the Company’s annual revenue.

Additional Executive Compensation Information and Policies

Severance and Change in Control Benefits

In order to attract and retain an appropriate caliber of talent, the Company provides the Named Executive Officers with severance and change in control protections pursuant to the terms of their Employment Agreements.

In the event a Named Executive Officer’s employment with the Company terminates for any reason, he will be entitled to certain unpaid and accrued payments and benefits. However, if the Named Executive Officer’s employment is terminated by the Company for “good cause” or if the Named Executive Officer terminates his employment without “good reason”, then he will be entitled only to limited payments and benefits consisting primarily of earned but unpaid salary and those benefits as required by applicable law or the terms of the Company’s benefit programs.

In the event of termination of Named Executive Officer’s employment with the Company at the end of the initial term of his Employment Agreement or any renewal term, and if such termination is solely due to non-renewal of the Employment Agreement by the Company, then the Named Executive Officer will receive (i) all salary earned but not yet paid through the date of termination and (ii) (x) any prior-year STIP compensation earned but not yet paid and the prorated portion of any current year STIP compensation, and (y) any and all options, rights or awards granted to the Named Executive Officer under the MIP prior to the termination date, that will vest on a prorated basis to reflect the portion of the applicable vesting period lapsed as of the date of termination. In the event of termination of the Employment Agreement due to non-renewal of the Employment Agreement by the Named Executive Officer, then the Named Executive Officer is entitled only to the salary earned but not yet paid through the date of termination.

In the event of termination of the Named Executive Officer’s employment by the Company due to his death or permanent disability, the Named Executive Officer or his beneficiaries will be entitled to (i) any compensation owed to the Named Executive Officer through the date of his death or determination of permanent disability (including salary), (ii) any prior-year STIP compensation earned but not yet paid, plus the prorated portion of any current year STIP compensation and (iii) pro-rata vesting of each of his then outstanding and non-vested options, rights or awards under any of the Company’s incentive compensation plans. The Company will provide medical insurance and other benefits to the Named Executive Officer and his dependents, as applicable, for ninety (90) days following his death or determination of permanent disability.

If the Named Executive Officer’s employment is terminated by the Named Executive Officer without “good reason” upon thirty (30) days’ prior written notice to the Company, then the Named Executive Officer is entitled to payment of compensation and all other benefits through the date of termination; provided, however, that if the Company waives the required notice period and terminates his employment early, the Named Executive Officer will be entitled to payment of compensation and all other benefits that he would have been entitled to during such thirty-day notice period.

If the Named Executive Officer’s employment is terminated either involuntarily by the Company and not due to “good cause” or by the Named Executive Officer for “good reason”, then, in addition to payment of compensation and benefits earned through the date of termination, the Named Executive Officer will be entitled to (i) a cash severance amount, which shall be equal to a “severance multiple” of the sum of his base salary and the amount of his target STIP in the year the termination occurs; (ii) the prorated portion of any current year STIP; (iii) pro-rata vesting of each of his then outstanding and non-vested options, rights or awards under any of the Company’s incentive compensation plans; (iv) a monthly cash reimbursement for a period of time following termination for the portion of the Named Executive Officer’s cost of COBRA premiums that are in excess of the active-employee cost of such coverage; and (v) the benefit of the auto allowance, mobile telephone allowance and other perquisites for one (1) year following termination. The “severance multiple” for Messrs. Scheinkman and Edgar is two times (2x) the sum of his base salary and the amount of his target STIP in the year the termination occurs; the “severance multiple” for Mr. Anderson is one and one-half times (1.5x) the sum of his base salary and the amount of his target STIP in the year the termination occurs. The period of COBRA premium reimbursement is two (2) years for Messrs. Scheinkman and Edgar and one and one-half (1.5) year for Mr. Anderson.

The Employment Agreements provide for compensation due to termination of employment following a change in control. A “change in control” will be generally defined to include the acquisition of 40% or more of the Company’s voting power, specified changes in a majority of the Board, and the sale or liquidation of the Company. If the Named Executive Officer’s employment is terminated in connection with a change in control either involuntarily by the Company and not due to “good cause” or by the Named Executive Officer for “good reason”, then, in addition to payment of compensation and benefits earned through the date of termination, the Named Executive Officer will receive (i) a “severance multiple” of the sum of his base salary and the amount of his target STIP in the year the termination occurs; (ii) the prorated portion of any current year STIP; (iii) pro-rata vesting of each of his then outstanding and non-vested options, rights or awards under any of the Company’s incentive compensation plans; (iv) a monthly cash reimbursement for a period of time following termination for the portion of the Named Executive Officer’s cost of COBRA premiums that are in excess of the active-employee cost of such coverage; and (v) the benefit of the auto allowance, mobile telephone allowance and other perquisites for one (1) year following termination. The Named Executive Officer will be eligible to receive any remaining ungranted and unallocated portion of the MIP the Board is required to award in the event of a change in control, subject to the Board’s sole discretion to determine the recipients thereof and the allocation to such recipients. The change in control “severance multiple” for Messrs. Scheinkman and Edgar is two and one-half times (2.5x) the sum of his base salary and the amount of his target STIP in the year the termination occurs; the change in control “severance multiple” for Mr. Anderson is two times (2x) the sum of his base salary and the amount of his target STIP in the year the termination occurs. The period of COBRA premium reimbursement after a change in control is two and one-half (2.5) years for Messrs. Scheinkman and Edgar and two (2) years for Mr. Anderson.

Compensation Recovery Policy

The Company has adopted a compensation recovery (or “clawback”) policy that requires paid incentive compensation to be recovered by the Company to the extent such compensation would have been lower due to

restated financial results. The Human Resources Committee has the authority to calculate the amount of any overpayment and, in its sole discretion, to seek to recover amounts determined to have been inappropriately received by any current or former executive of the Company. The clawback policy provides that overpayments of compensation should be recovered within twelve months after an applicable restatement of financial results.

Anti-Hedging and Anti-Pledging Policy

Under the Company’s Insider Trading Policy, directors, executive officers and employees are prohibited from (i) hedging the economic interest in the Company’s securities, and (ii) purchasing securities on margin, holding Company securities in a margin account, or pledging Company securities as collateral for a loan.

Outstanding Equity Awards at 2019 Fiscal Year-End

The following table sets forth information on the holdings of stock options and stock awards by the Named Executive Officers as of December 31, 2019.

Equity Compensation Plan Information

This table provides information regarding the equity authorized for issuance under the Company’s equity compensation plans as of December 31, 2019.

RELATED PARTIES

The Company’s Related-Party Transactions Policy governs the review, approval and ratification of transactions involving the Company and related persons where the amount involved exceeds $120,000. Related persons include:

Potential related-party transactions are reviewed by the Company’s Legal Department. If the Company’s Legal Department determines that the proposed transaction is a related-party transaction for such purposes, the proposed transaction is then submitted to the Governance Committee for review.

The Governance Committee considers all of the relevant facts and circumstances available, including but not limited to:

In the event that the Company becomes aware of a related-party transaction that has not been previously approved or ratified by the Governance Committee, a similar process will be undertaken by the Governance Committee in order to determine if the existing transaction should continue or be terminated.

A copy of the Company’s Related-Party Transactions Policy can be found on the “Corporate Governance” section of its website at https://castlemetals.com/investors/corporate-governance.

Related-Party Transactions and Relationships

Convertible Notes

On June 18, 2017, the Company and four of its subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware in Wilmington, Delaware (the “Bankruptcy Court”). Also on June 18, 2017, the Debtors filed their Prepackaged Joint Chapter 11 Plan of Reorganization with the Bankruptcy Court and on July 25, 2017, the Debtors filed their Amended Prepackaged Joint Chapter 11 Plan of Reorganization (the “Plan”) with the Bankruptcy Court. On August 2, 2017, the Bankruptcy Court entered an order confirming the Plan. On August 31, 2017 (the “Effective Date”), the Plan became effective pursuant to its terms and the Debtors emerged from their Chapter 11 cases. On February 6, 2018, the Bankruptcy Court entered a final order closing the Chapter 11 cases of the Debtors.

Pursuant to the Plan, on the Effective Date, the Bankruptcy Court discharged and canceled certain senior secured indebtedness and, in exchange, the Company issued new common stock in the Company and entered into an Indenture with Wilmington Savings Fund Society, FSB, as trustee and collateral agent and, pursuant thereto, issued approximately $164.9 million in aggregate original principal amount of its 5.00%/7.00% Convertible Senior Secured PIK Toggle Notes due 2022 (the “Old Notes”). As noted below, in addition to certain members of management, certain stockholders and (including stockholders with whom members of the Board of Directors are affiliated) received and continue to hold Old Notes.

The Old Notes are five year senior obligations of the Company and certain of its subsidiaries, secured by a lien on all or substantially all of the assets of the Company, its domestic subsidiaries, and certain of its foreign

subsidiaries. The Old Notes are convertible into shares of the Company’s common stock at any time at the initial conversion price of $3.77 per share, which rate is subject to adjustment as set forth in the Indenture governing the Old Notes. Interest on the Old Notes accrues at the rate of 5.00%, except that the Company may, in certain circumstances, pay at the rate of 7.00% in kind.

On February 27, 2020, the Company filed a Registration Statement on Form S-4 (the “S-4 Registration Statement”) and Schedule TO with respect to a registered exchange offer (the “Exchange Offer”) pursuant to which the Company will issue its 3.00%/5.00% Convertible Senior PIK Toggle Notes due 2024 (the “New Notes”) and shares of its common stock in exchange for any and all Old Notes tendered. The New Notes will be guaranteed on a senior basis by all current and future domestic subsidiaries (other than those designated as “Unrestricted Subsidiaries”) of the Issuer (the “Guarantors”). The restrictive covenants in the indenture governing the New Notes will be substantially similar to the covenants in the indenture governing the Old Notes. The New Notes will bear interest at a rate of 3.00% per annum if paid in cash or 5.00% if paid in kind per annum, payable quarterly. The New Notes will mature four years after issuance and will be convertible, at the option of the holders, into shares of the Company's common stock.

Concurrently with the Exchange Offer, the Company is soliciting consents from holders of the Old Notes for certain amendments (the “Proposed Amendments”) to the indenture governing the Old Notes to eliminate or amend substantially all of the restrictive covenants, release all collateral securing the Company’s obligations under the indenture governing the Old Notes, and modify certain of the events of default and various other provisions, contained in such indenture.

On February 27, 2020, the Company announced that it entered into support agreements with holders who, in the aggregate, hold in excess of 96% of the Old Notes, who have agreed, among other things, to tender their old notes in the Exchange Offer and to consent to the Proposed Amendments, subject to certain conditions.

Additional information regarding the Exchange Offer may be found in the Company’s S-4 Registration Statement filed with the SEC on February 27, 2020.

Stockholders Agreement

Pursuant to the Plan, on August 31, 2017, the Company entered into a Stockholders Agreement (the “Stockholders Agreement”) with Highbridge Capital Management, LLC and its affiliates (“Highbridge”), Whitebox Advisors LLC and its affiliates (“Whitebox”), SGF, Inc. (“SGF”), Corre Partners Management, LLC and its affiliates (“Corre”), Wolverine Flagship Fund Trading Limited and its affiliates (“WFF”), and certain members of the Company’s management. The Stockholders Agreement includes certain customary board designation rights, preemptive rights, transfer restrictions, and tag-along and drag-along rights. For additional information on the terms of the Stockholders Agreement, see the Company’s Registration Statement on Form 8-A filed with the SEC on August 31, 2017.

Registration Rights Agreement

Pursuant to the Plan, on the Effective Date, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Highbridge, Whitebox, SGF, Corre and WFF. Under the Registration Rights Agreement, the Company has granted registration rights to those recipients who are party to the Registration Rights Agreement with respect to certain securities of the Company. For additional information on the terms of the Registration Rights Agreement, see the Company’s Registration Statement on Form 8-A filed with the SEC on August 31, 2017. As reported in the S-4 Registration Statement, upon closing of the Exchange Offer, an amended and restated Registration Rights Agreement, with terms substantially consistent with those applicable to the existing agreement, will be executed.

Highbridge Capital Management, LLC

One of the Company’s current directors, Jonathan Segal, serves as a managing director of, and portfolio manager for, Highbridge. Pursuant to the Plan and the Stockholders Agreement, Highbridge and/or the its affiliates have the right to designate one member of the Board. Mr. Segal was selected by Highbridge. Furthermore, on the Effective Date, in connection with the transactions described above, Highbridge and/or one or more of its affiliates received approximately $49.7 million in aggregate principal amount of the Second Lien Notes, 509,105 shares of the Company’s new common stock and a cash payment of $4.0 million.

Highbridge has received PIK interest payments, in the amounts of $4,087,013 (in 2019), $3,773,825 (in 2018) and 1,163,787 (in 2017) with respect to its Second Lien Notes, in each case commensurate with other holders thereof.

Whitebox Advisors LLC

One of the Company’s directors, Jacob Mercer, is the Head of Restructuring and Special Situations at Whitebox. Pursuant to the Plan and the Stockholders Agreement, Whitebox and/or its affiliates and/or the its affiliates have the right to designate one member of the New Board. Mr. Mercer was selected by Whitebox. Furthermore, on the Effective Date, in connection with the transactions described above, Whitebox and/or one or more of its affiliates received approximately $46.0 million in aggregate principal amount of Second Lien Notes, 400,876 shares of the Company’s new common stock and a cash payment of $3.6 million.

Whitebox has received PIK interest payments, in the amounts of $3,801,382 (in 2019), $3,507,348 (in 2018) and $1,078,876 (in 2017) with respect to its Second Lien Notes, in each case commensurate with other holders thereof.

Simpson Estates / SGF, Inc.

One of the Company’s current directors, Mr. Mellin, serves as the President, Chief Executive Officer and Chief Investment Officer of Simpson Estates, Inc., an affiliate of SGF. Pursuant to the Plan and the Stockholders Agreement, SGF and/or its affiliates have the right to designate one member of the Board. SGF selected Mr. Mellin. Furthermore, on the Effective Date, in connection with the transactions described above, SGF and/or one or more of its affiliates received approximately $24.9 million in aggregate principal amount of the Second Lien Notes, 206,557 shares of the Company’s new common stock and a cash payment of $2.0 million.

SGF received PIK interest payments, in the amounts of $1,962,899 (in 2019), $1,831,304 (in 2018) and $583,568 (in 2017) with respect to its Second Lien Notes, in each case commensurate with other holders thereof.

Corre Partners Management, LLC

On the Effective Date and in connection with the transactions described above Corre, and/or one or more of its affiliates received approximately $24.2 million in aggregate principal amount of the Second Lien Notes, 234,554 shares of the Company’s new common stock and a cash payment of $3.1 million.

Corre received PIK interest payments, in the amounts of $1,899,993 (in 2019), $1,772,614 (in 2018) and $565,620 (in 2017) with respect to its Second Lien Notes, in each case commensurate with other holders thereof.

Wolverine Flagship Fund Trading Limited

On the Effective Date and in connection with the transactions described above, WFF and/or one or more of its affiliates received approximately $8.5 million in aggregate principal amount of the Second Lien Notes, 70,905 shares of the Company’s new common stock and a cash payment of $.7 million.

WFF received PIK interest payments, in the amounts of $668,228 (in 2019), $623,429 (in 2018) and $198,664 (in 2017) with respect to its Second Lien Notes, in each case commensurate with other holders thereof.

Pursuant to the Plan and Stockholders Agreement, Corre and WFF have the right by mutual agreement to designate one member of the Board; provided that such designated individual who qualifies as an “independent director” under NASDAQ Marketplace Rule 5605(a)(2). Mr. Brodsky was selected by Corre and WFF.

Revolving Credit and Security Agreement

On June 1, 2018, the Company entered into an Amendment No. 1 to Revolving Credit and Security Agreement (the “Credit Agreement Amendment”) by and among the Company, the other borrowers and guarantors party thereto and PNC Bank, National Association as the agent and the lenders, which amends that certain Revolving Credit and Security Agreement dated as of August 31, 2017 (as amended by the Credit Agreement Amendment, the “Expanded Credit Facility”) to provide for additional borrowing capacity. The Expanded Credit Facility provides for an additional $25 million last out Revolving B credit facility made available in part by way of a participation in the Revolving B credit facility by each of Highbridge in the aggregate amount of approximately $7.6 million, Whitebox in the aggregate amount of approximately $7.1 million, SGF in the aggregate amount of

$3.8 million, and Corre in the aggregate amount of approximately $3.0 million. The Revolving B credit facility accrues interest at 12.0% per annum and will be paid-in-kind unless the Company elects to pay such interest in cash and the Revolving B payment conditions specified in the Expanded Credit Facility are satisfied. Borrowings under the existing Revolving B credit facility will mature on February 28, 2022. The Expanded Credit Facility continues to be secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors.

DESCRIPTION OF OTHER INDEBTEDNESS

The following descriptions are only summaries of certain of the material provisions of the agreements summarized and do not purport to be complete and are qualified in their entirety by reference to provisions of the agreements being summarized. We urge you to read the agreements governing each of the facilities and notes described below. Copies of the agreements will be contained in our filings with the SEC and can be obtained as described under the heading “Where You Can Find More Information.” You may also request a copy of these agreements at our address set forth under the heading “Questions and Answers About the Exchange Offer—Who is making the Exchange Offer?”

First Lien Facility

The First Lien Facility provides for two tranches of revolving debt for the borrowers named therein; a $125.0 million senior secured, revolving credit facility and an additional $25.0 million last-out revolving credit facility. Subject to certain exceptions and permitted encumbrances, the obligations under the First Lien Facility are secured by a first priority security interest in substantially all of the assets of each of the borrowers and certain of their foreign subsidiaries. The proceeds of the advances under the First Lien Facility may only be used to (i) pay certain fees and expenses to the Agent and the lenders under the First Lien Facility, (ii) provide for borrowers’ working capital needs and reimburse drawings under letters of credit, (iii) repay the obligations under the Debtor-in-Possession Revolving Credit and Security Agreement dated as of June 10, 2017, by and among the Company, the lenders party thereto, and PNC Bank, National Association, and certain other existing indebtedness, and (iv) provide for the borrowers’ capital expenditure needs, in accordance with the First Lien Facility.

The Company may prepay its obligations under the First Lien Facility at any time without premium or penalty, and must apply the net proceeds of material sales of collateral in prepayment of such obligations. Interest on indebtedness accrues based on the applicable Prime or LIBOR-based rate plus a margin, as set forth in the First Lien Facility. Additionally, the Company must pay a monthly Facility Fee equal to the product of (i) 0.25% per annum (or, if the average daily revolving facility usage is less than 50% of the maximum revolving advance amount, 0.375% per annum) multiplied by (ii) the amount by which the maximum revolving advance amount exceeds such average daily revolving facility usage for such month.

Under the First Lien Facility, the maximum borrowing capacity of the facility is based on the Company's borrowing base calculation. The advance rates used in the borrowing base calculation are 85% on eligible accounts receivable, 90% on eligible insured accounts receivable and the lesser of 75% of value or 90% appraised net orderly liquidation value of on eligible inventory.

The Company's First Lien Facility contains certain covenants and restrictions customary to an asset-based revolving loan. Indebtedness for borrowings under the First Lien Facility is subject to acceleration upon the occurrence of specified defaults or events of default, including failure to pay principal or interest, the inaccuracy of any representation or warranty of a loan party, failure by a loan party to perform certain covenants, defaults under indebtedness owed to third parties, certain liability producing events relating to ERISA, the invalidity or impairment of the Agent’s lien on its collateral or of any applicable guarantee, and certain adverse bankruptcy-related and other events.

The Company's First Lien Facility contains a springing financial maintenance covenant requiring the Company to maintain a Fixed Charge Coverage Ratio of 1.0 to 1.0 in any covenant testing period when the Company's cash liquidity (as defined in the First Lien Facility Agreement) is less than $12.5 million. The Company is not in a covenant testing period as of and for the year ended December 31, 2019.

Additionally, upon the occurrence and during the continuation of an event of default or upon the failure of the Company to maintain cash liquidity (as defined in the First Lien Facility Agreement) in excess of $12.5 million, the lender has the right to take full dominion of the Company’s cash collections and apply these proceeds to outstanding loans under the First Lien Facility Agreement (“Cash Dominion”).

Additional unrestricted borrowing capacity under the first tranche of the First Lien Facility at December 31, 2019 was as follows (in millions):

The First Lien Facility matures on February 28, 2022.

The Old Notes

The old notes are five-year senior obligations of the Company and certain of its subsidiaries, secured by a second priority lien junior to the lien of the agent under the First Lien Facility on all or substantially all of the assets of the Company, its current domestic subsidiaries and certain of its foreign subsidiaries.

The old notes are convertible into shares of the Issuer’s common stock at any time at the initial conversion price of $3.77 per share, which rate is subject to adjustment as set forth in the old notes indenture. The value of shares of the Issuer’s common stock for purposes of the settlement of the conversion right will be calculated as provided in the old notes indenture, using a 20 trading day observation period. Upon conversion, the Issuer will pay and/or deliver, as the case may be, cash, shares of the Issuer’s common stock or a combination of cash and shares of the Issuer’s common stock, at the Issuer’s election, together with cash in lieu of fractional shares.

The terms of the old notes contain numerous covenants imposing financial and operating restrictions on the Company’s business. These covenants place restrictions on the Issuer’s ability and the ability of its subsidiaries to, among other things, pay dividends, redeem stock or make other distributions or restricted payments; incur indebtedness or issue certain stock; make certain investments; create liens; agree to certain payment restrictions affecting certain subsidiaries; sell or otherwise transfer or dispose assets; enter into transactions with affiliates; and enter into sale and leaseback transactions.

The old notes may not be redeemed by the Issuer in whole or in part at any time, subject to certain exceptions provided under the old notes indenture. In addition, if a Fundamental Change occurs at any time, each holder of any old notes has the right to require the Issuer to repurchase such holder’s old notes for cash at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest thereon, subject to certain exceptions.

Subject to the Existing Intercreditor Agreement, the Company must use the net proceeds of material sales of collateral, which proceeds are not used for other permissible purposes, to make an offer of repurchase to holders of the old notes. Indebtedness for borrowings under the old notes indenture is subject to acceleration upon the occurrence of specified defaults or events of default, including failure to pay principal or interest, the inaccuracy of any representation or warranty of any obligor under the old notes, failure by an obligor under the old notes to perform certain covenants, the invalidity or impairment of the Indenture Agent’s lien on its collateral or of any applicable guarantee, and certain adverse bankruptcy-related and other events.

Interest on the old notes accrues at the rate of 5.00%, except that the Issuer may, in circumstances where the payment on interest in cash would cause a condition of default under the First Lien Facility, pay at the rate of 7.00% in kind. Currently, the Issuer is paying interest on the old notes in kind.

Local Credit Facility

In July 2017, the Company's French subsidiary entered into a local credit facility under which it may borrow against 100% of the eligible accounts receivable factored, with recourse, up to 6.5 million euros, subject to factoring fees and floating Euribor or LIBOR interest rates, plus a 1.0% margin. The French subsidiary utilizes the local credit facility to support its operating cash needs. As of December 31, 2019, the French subsidiary has borrowings of $2.9 million under the credit facility, which is recorded as short-term borrowings at the Consolidated Balance Sheets.

Letters of Credit

As of December 31, 2019, the Company had $2.4 million of irrevocable letters of credit outstanding.

The Company's debt agreements impose significant operating and financial restrictions which may prevent the Company from executing certain business opportunities, such as making acquisitions or paying dividends, among other things.

GENERAL TERMS OF THE EXCHANGE OFFER AND CONSENT SOLICITATION

Exchange Offer

We are offering, upon the terms and subject to the conditions set forth in this prospectus, to exchange new notes and common stock for any and all outstanding old notes validly tendered to the Exchange Agent, and not validly withdrawn, on or prior to the Expiration Date. The exchange consideration will be in full satisfaction of the principal amount of the old notes that are tendered and accepted in the Exchange Offer, and any accrued and unpaid interest to, but excluding, the closing date on the old notes that are tendered and accepted in the Exchange Offer. Tendering holders of old notes will receive exchange consideration consisting of: (i) $491.8619 principal amount of new notes and (ii) 363.2585 shares of common stock of the Issuer. As of February 25, 2020, $193.7 million in aggregate principal amount of the old notes was outstanding, not including accrued and unpaid interest. Accrued and unpaid interest on the old notes will be will be exchanged into new notes and common stock at the Exchange Rate on the date on which the Exchange Offer is completed.

Assuming completion of the Exchange Offer and the tender of all outstanding old notes as of December 31, 2019, we will have approximately 75.3 million shares of common stock outstanding, out of 200.0 million shares authorized. Approximately 212.9 million shares of common stock will be issuable upon conversion of the new notes. At the completion of the Exchange Offer, we therefore expect that we will not have sufficient authorized shares of common stock to issue upon conversion of the new notes. If the Exchange Offer is completed, we intend to call a special meeting of stockholders (or consider such matters at our upcoming annual meeting of stockholders) to be held as soon as reasonably practicable for stockholders of record as of a date occurring on or after the Closing Date (which will include holders of old notes who receive shares of common stock in the Exchange Offer) to consider the following matters: (1) a proposal to amend our charter to increase the number of authorized shares of our common stock available for issuance, in order to provide a sufficient number of authorized shares of common stock for the issuance of shares upon conversion of the new notes, (2) a proposal to amend our charter to effect a reverse stock split of shares of our common stock; and (3) any other matters properly brought before the meeting. In lieu of a special or annual meeting of stockholders, the Company may direct the actions set forth in clauses (1) and (2) above to be taken by written consent of the stockholders in accordance with applicable Maryland law and our charter and bylaws. Additionally, in lieu of seeking a vote of stockholders to effect a reverse stock split through an amendment to our charter, the Board of Directors may authorize the Company to undertake a reverse stock split of no greater than ten shares of common stock into one share of common stock, which the Board of Directors may authorize, without any action by stockholders, in accordance with Maryland law. In the indenture governing the new notes, we have agreed to use commercially reasonable efforts to cause items (1) and (2) of the preceding sentence to occur no later than August 31, 2020. Unless and until we obtain stockholder approval of the increase in the number of shares of our common stock authorized and available for issuance upon conversion of the new notes, if the new notes are converted, we may not elect physical settlement or combination settlement of any conversion of new notes if such election would result in the issuance of more than 124.7 million shares of common stock (in the aggregate for the new notes taking into account all prior or concurrent new notes conversions). In such circumstance, we would be required to pay cash to satisfy our settlement obligations. We may not have sufficient funds to satisfy such cash obligations and, in such circumstances, may not be able to arrange the necessary financing on favorable terms or at all.

The new notes will be in denominations of $1,000 and integral multiples of $1.00 in excess thereof. Only whole principal amounts or numbers of shares of common stock will be issued with the principal amounts or numbers of shares of common stock to be issued to be adjusted by rounding up or down to the nearest $1.00 or number of shares of common stock. A half amount or number of shares of common stock will be rounded up.

The terms of the new notes will be substantially similar to the terms of the old notes, with certain exceptions. For a detailed description of the new notes, see “Description of the New Notes.”

Tenders of old notes may be withdrawn prior to the Expiration Date. Any old note withdrawn pursuant to the terms of this Exchange Offer shall not thereafter be considered tendered for any purpose of this Exchange Offer unless and until such old note is again tendered pursuant to this Exchange Offer.

Our obligation to accept old notes that are tendered is subject to the conditions described below under “—Conditions of the Exchange Offer and Consent Solicitation.”

Consent Solicitation

We are soliciting consents from holders of old notes upon the terms and subject to the conditions set forth herein and in the accompanying Letter of Transmittal. We intend to obtain consents from holders representing at least 66-2/3% of the aggregate principal amount of the old notes. We have entered into Support Agreements with holders of the old notes who, in the aggregate, hold in excess of 96% of the outstanding principal amount of the old notes. Under the terms of the Support Agreements, such holders have agreed, among other things, to tender all of their old notes in the Exchange Offer and to consent to the Proposed Amendments. See “Proposed Amendments” and “Definitive Documentation.”

If consents representing at least 66-2/3% of the outstanding principal amount of the old notes are delivered (and not revoked) prior to the Expiration Date, we will, subject to consummation of the Exchange Offer, execute a supplemental indenture with respect to the old notes (the “Supplemental Indenture”) with Wilmington Savings Fund Society, FSB, as Trustee, giving effect to the Proposed Amendments. The Proposed Amendments will be effective as to and bind all old notes at such time as the Supplemental Indenture has been executed and all conditions precedent to the Exchange Offer have been satisfied or validly waived and we have irrevocably accepted for exchange in the Exchange Offer all validly tendered old notes (other than those old notes that have been validly withdrawn), regardless of whether a consent was given in respect of any particular old note.

Holders that tender old notes pursuant to the Exchange Offer prior to the Expiration Date will be deemed automatically to have delivered a consent with respect to all such old notes.

Holders may not revoke consents except as described under “—Withdrawal of Tenders; Revocation of Consents.”

Any questions or requests for assistance or for additional copies of this prospectus, the Letter of Transmittal or related documents may be directed to the Exchange Agent at its address or one of its telephone numbers set forth on the last page hereof. A holder may also contact such holder’s broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Consent Solicitation.

Extension, Termination or Amendment

Subject to applicable law, we expressly reserve the right, at any time and from time to time, and regardless of whether any events preventing satisfaction of the conditions to the Exchange Offer or Consent Solicitation shall have occurred or shall have been determined by us to have occurred, to extend the period during which the Exchange Offer and Consent Solicitation is open by giving oral (to be confirmed in writing) or written notice of such extension to the Exchange Agent and by making public disclosure by press release or other appropriate means of such extension to the extent required by law. The Exchange Offer may not be extended without extending the Consent Solicitation, and the Consent Solicitation may not be extended without extending the Exchange Offer.

During any extension of the Exchange Offer, all old notes previously tendered and not accepted for exchange will remain subject to the Exchange Offer and may, subject to the terms and conditions of the Exchange Offer and the Consent Solicitation, be accepted by us, and all consents previously delivered will remain effective. In addition, we may waive conditions without extending the Exchange Offer and Consent Solicitation in accordance with applicable law.

Any waiver, amendment or modification of the Exchange Offer and Consent Solicitation will apply to all old notes tendered pursuant to the Exchange Offer and Consent Solicitation. If we make a change that we determine to be material in any of the terms of the Exchange Offer or waive a condition of the Exchange Offer and Consent Solicitation that we determine to be material, we will give oral (to be confirmed in writing) or written notice of such amendment or such waiver to the Exchange Agent and will disseminate additional Exchange Offer and consent documents and extend the Exchange Offer and Consent Solicitation and any withdrawal or revocation rights as we determine necessary and to the extent required by law.

We may terminate the Exchange Offer and Consent Solicitation if any condition is not satisfied on or prior to the Expiration Date. There can be no assurance that we will exercise our right to extend, terminate or amend the Exchange Offer and Consent Solicitation.

Announcements

Any extension, termination or amendment of the Exchange Offer and Consent Solicitation will be followed as promptly as practicable by announcement thereof, such announcement in the case of an extension to be issued no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled Expiration Date. Without limiting the manner in which we may choose to make such announcement, we will not, unless otherwise required by law, have any obligation to publish, advertise or otherwise communicate any such announcement other than by making a release to an appropriate news agency or another means of announcement that we deem appropriate.

Acceptance of Old Notes for Exchange; Accrual of Interest

Acceptance of Old Notes for Exchange

If the conditions to the Exchange Offer are satisfied, or if we waive all of the conditions that have not been satisfied, we will accept, at the settlement date and after we receive completed and duly executed Letters of Transmittal or Agent’s Messages (as defined below) with respect to any and all of the old notes tendered for exchange at such time, the old notes for exchange by notifying the Exchange Agent of our acceptance. The notice may be oral if we promptly confirm it in writing.

An “Agent’s Message” is a message transmitted by The Depository Trust Company (“DTC”), received by the Exchange Agent and forming part of the timely confirmation of a book entry transfer (“Book-Entry Confirmation”), which states that DTC has received an express acknowledgement from you that you have received this prospectus and agree to be bound by the terms of the Letter of Transmittal, and that we may enforce such agreement against you.

We expressly reserve the right, in our sole discretion, to delay acceptance for exchange of, or exchange of, old notes tendered under the Exchange Offer (subject to Rule 14e-1c under the Exchange Act, which requires that we issue the offered consideration or return the old notes deposited pursuant to the Exchange Offer promptly after termination or withdrawal of the Exchange Offer), or to terminate the Exchange Offer and not accept for exchange any old notes not previously accepted for exchange, (1) if any of the conditions to the Exchange Offer shall not have been satisfied or validly waived by us, or (2) in order to comply in whole or in part with any applicable law.

In all cases, the new notes will be issued only after timely receipt by the Exchange Agent of (1) Book-Entry Confirmation of the old notes into the Exchange Agent’s account at DTC, (2) the properly completed and duly executed Letter of Transmittal (or a facsimile thereof) or an Agent’s Message in lieu thereof, and (3) any other documents required by the Letter of Transmittal. The Exchange Offer is scheduled to expire at the Expiration Date, unless extended by us.

For purposes of the Exchange Offer, we will have accepted for exchange tendered old notes, if, as and when we give oral or written notice to the Exchange Agent of our acceptance of the old notes for exchange pursuant to the Exchange Offer. In all cases, the exchange of old notes pursuant to the Exchange Offer will be made by the deposit of any exchange consideration with the Exchange Agent, which will act as your agent for the purposes of receiving new notes from us, and delivering new notes to you. If, for any reason whatsoever, acceptance for exchange of, or exchange of, any old notes tendered pursuant to the Exchange Offer is delayed (whether before or after our acceptance for exchange of, or exchange of, the old notes) or we extend the Exchange Offer or are unable to accept for exchange the old notes tendered pursuant to the Exchange Offer, then, without prejudice to our rights set forth herein, we may instruct the Exchange Agent to retain tendered old notes and those old notes may not be withdrawn, subject to the limited circumstances described in “—Withdrawal of Tenders; Revocation of Consents” below.

We will have the right, which may be waived, to reject the defective tender of old notes as invalid and ineffective. If we waive our rights to reject a defective tender of old notes, subject to the other terms and conditions set forth in the Offer Documents, you will be entitled to the new notes.

Tender of old notes pursuant to the Exchange Offer will be accepted only in principal amounts equal to $1,000 and integral multiples of $1.00 in excess thereof.

We will pay or cause to be paid all transfer taxes with respect to the exchange of any old notes unless the box titled “Special Payment or Issuance Instructions” or the box titled “Special Delivery Instructions” on the Letter of Transmittal has been completed, as described in the instructions thereto.

Accrued Interest

If old notes are validly tendered and accepted for exchange pursuant to the Exchange Offer, the holders of such old notes will be entitled to accrued and unpaid interest on those old notes, which will be exchanged into new notes and common stock at the Exchange Rate on the date on which the Exchange Offer is completed, and interest shall accrue on the new notes from and after the issue date of the new notes.

Under no circumstances will any special interest be payable because of any delay in the transmission new notes to you with respect to exchanged old notes or otherwise.

We will pay all fees and expenses of the Exchange Agent in connection with the Exchange Offer.

Procedures for Tendering Old Notes

General

In order to participate in the Exchange Offer, you must tender your old notes to the Exchange Agent as described below. It is your responsibility to tender your old notes. We have the right to waive any defects. However, we are not required to waive defects and are not required to notify you of defects in your tender.

If you have any questions or need help in tendering your old notes, please contact the Exchange Agent whose addresses and telephone numbers are listed on the back cover page of this prospectus.

The method of delivery of old notes and Letters of Transmittal is at your election and risk. If delivery is by mail, we recommend that registered mail, properly insured, with return receipt requested, be used. In all cases, sufficient time should be allowed to assure timely delivery. No Letters of Transmittal and Consent or old notes should be sent to the Issuer.

Proper Tender

All old notes are currently held in book-entry form through DTC. Except as set forth below with respect to ATOP procedures, for a holder to tender old notes pursuant to the Exchange Offer, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), together with any signature guarantees and any other documents required by the Instructions to the Letter of Transmittal, or an Agent’s Message in lieu thereof, must be received by the Exchange Agent at the address or facsimile number set forth on the back cover of this prospectus prior to the Expiration Date, and the old notes must be transferred pursuant to the procedures for book-entry transfer described below and a Book-Entry Confirmation must be received by the Exchange Agent on or prior to the Expiration Date.

In all cases, the exchange of old notes tendered and accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of:

Deemed Consent by Tender

The tender of old notes pursuant to the Exchange Offer and in accordance with the procedures described in the Offer Documents will be deemed to automatically constitute delivery of a consent for the Proposed Amendments with respect to the old notes tendered, except as provided herein. All references to procedures for tendering old notes shall include such deemed delivery of consents for the Proposed Amendments.

Tender Procedures for Notes Held Through a Custodian

If you are a beneficial owner of old notes, but the holder is a custodial entity such as a bank, broker, dealer, trust company or other nominee, and you seek to tender old notes, you must provide appropriate instructions to such

holder in order to tender through ATOP with respect to such old notes. Beneficial owners may be instructed to complete and deliver an instruction letter to such holder for this purpose. We urge you to contact such person that holds old notes for you if you wish to tender your old notes.

Book-Entry Transfer

The Exchange Agent has or will establish an account with respect to the old notes at DTC for purposes of the Exchange Offer, and any financial institution that is a participant in the DTC system (a “DTC Participant”) and whose name appears on a security position listing as the record owner of the old notes may make book-entry delivery of old notes by causing DTC to transfer the old notes into the Exchange Agent’s account at DTC in accordance with DTC’s procedure for transfer. Although delivery of old notes may be effected through book-entry transfer into the Exchange Agent’s account at DTC, either an Agent’s Message or a Letter of Transmittal (or a facsimile thereof) properly completed and duly executed, along with any required signature guarantees and any other required documents, must be transmitted to and received by the Exchange Agent at one of the addresses set forth on the back cover of this prospectus prior to the Expiration Date.

Tender of Notes Through ATOP

In lieu of physically completing and signing the Letter of Transmittal and delivering it to the Exchange Agent, DTC participants may electronically transmit their acceptance of the Exchange Offer through ATOP, for which the transaction will be eligible. In accordance with ATOP procedures, DTC will then verify the acceptance of the Exchange Offer and send an Agent’s Message to the Exchange Agent for its acceptance.

If a holder transmits its acceptance through ATOP, delivery of such tendered old notes must be made to the Exchange Agent pursuant to the book-entry delivery procedures set forth herein. Unless such holder delivers the old notes being tendered to the Exchange Agent by book-entry delivery, we may, at our option, treat such tender as defective for purposes of delivery of tenders, acceptance for exchange and the right to receive new notes. Delivery of documents to DTC (physically or by electronic means) does not constitute delivery to the Exchange Agent. If you desire to tender your old notes prior to the Expiration Date, you must allow sufficient time for completion of the ATOP procedures during the normal business hours of DTC on such date.

Signature Guarantees

Signatures on all Letters of Transmittal and Consent must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program (a “Medallion Signature Guarantor”), unless the Letter of Transmittal is delivered, and any old notes tendered thereby are tendered (i) by a registered holder of old notes (or by a participant in DTC whose name appears on a security position listing as the owner of such old notes) who has not completed either the box entitled “Special Delivery Instructions” or “Special Payment or Issuance Instructions” on the Letter of Transmittal or (ii) for the account of a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority or a commercial bank or trust company having an office or correspondent in the United States (each of the foregoing being referred to as an “Eligible Institution”). If the old notes are registered in the name of a person other than the signer of the Letter of Transmittal, or if old notes not accepted for exchange or not tendered are to be returned to a person other than such holder, then the signatures on the Letters of Transmittal and Consent accompanying the tendered old notes must be guaranteed by a Medallion Signature Guarantor as described above.

Determination of Validity of Tenders

All questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tendered old notes pursuant to any of the procedures described above, and the form and validity (including time of receipt of notices of withdrawal) of all documents will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any or all tenders of any old notes determined by us not to be in proper form, or if the acceptance of or exchange of such old notes may, in the opinion of our counsel, be unlawful. We also reserve the right to waive any conditions to the Exchange Offer that we are legally permitted to waive.

Your tender will not be deemed to have been made until all defects or irregularities in your tender have been cured or waived. All questions as to the form and validity (including time of receipt) of any delivery or

withdrawal of a tender will be determined by us in our sole discretion, which determination shall be final and binding. Neither we, the Exchange Agent nor any other person or entity is under any duty to give notification of any defects or irregularities in any tender or withdrawal of any old notes, or will incur any liability for failure to give any such notification.

Please send all materials to the Exchange Agent only and not to us.

Withdrawal of Tenders; Revocation of Consents

Your right to withdraw old notes tendered (and also thereby revoke the consent deemed delivered with such old notes) will expire at the Expiration Date. Withdrawal of old notes prior to the Expiration Date also constitutes revocation of consent for the Proposed Amendments with respect to such old notes; provided, however, each holder who has entered into a Support Agreement with us in connection with the Exchange Offer has agreed that, except in certain limited circumstances, its consent to the Proposed Amendments will remain valid if we consummate the Exchange Offer, even if it withdraws its tender of old notes in the Exchange Offer. Consents may only be revoked by properly withdrawing such tendered old notes. You may not withdraw old notes after the Expiration Date.

Subject to applicable law, if, for any reason whatsoever, acceptance for exchange of or exchange of any old notes tendered pursuant to the Exchange Offer is delayed (whether before or after our acceptance for exchange of old notes) or we extend the Exchange Offer or are unable to accept for exchange or exchange the old notes tendered pursuant to the Exchange Offer, we may instruct the Exchange Agent to retain tendered old notes, and those old notes may not be withdrawn, except to the extent that you are entitled to the withdrawal rights set forth herein.

To be effective, a written or facsimile transmission notice of withdrawal of a tender or a properly transmitted “Request Message” through DTC’s ATOP system must:

If the old notes to be withdrawn have been delivered or otherwise identified to the Exchange Agent, a signed notice of withdrawal is effective immediately upon receipt by the Exchange Agent of written or facsimile transmission of the notice of withdrawal or revocation (or receipt of a Request Message) even if physical release is not yet effected. A withdrawal of old notes can only be accomplished in accordance with the foregoing procedures.

If you withdraw old notes, you will have the right to re-tender the old notes on or prior to the Expiration Date in accordance with the procedures described above for tendering outstanding old notes.

If we amend or modify the terms of the Exchange Offer and Consent Solicitation, or the information concerning the Exchange Offer and Consent Solicitation, in a manner determined by us to constitute a material change to the holders, we will disseminate additional Exchange Offer and Consent Solicitation materials and extend the period of the Exchange Offer and Consent Solicitation, including any withdrawal rights, to the extent required by law and as we determine necessary. An extension of the Expiration Date will not affect a holder’s withdrawal rights, unless otherwise provided or as required by applicable law.

Conditions of the Exchange Offer and Consent Solicitation

Notwithstanding any other provisions of the Exchange Offer, we will not be required to accept for exchange or to exchange old notes tendered pursuant to the Exchange Offer, and may terminate, amend or extend the Exchange Offer or delay or refrain from accepting for exchange, or exchanging, the old notes or transferring any exchange consideration, if any of the following conditions are not met or waived by us, prior to the Expiration Date:

We have entered into Support Agreements with holders of the old notes who, in the aggregate, hold in excess of 96% of the outstanding principal amount of the old notes. Under the terms Support Agreements, such holders have agreed, among other things, to tender all of their old notes in the Exchange Offer and to consent to the Proposed Amendments, subject to certain conditions. In addition, our obligation to issue any new notes and common stock is conditioned upon our acceptance of old notes for exchange pursuant to the Exchange Offer.

These conditions are for our benefit and may be asserted by us, subject to the consent of the Required Consenting Noteholders,, or may be waived by us, in whole or in part, at any time and from time to time at or prior to expiration of the Exchange Offer. We may additionally terminate the Exchange Offer if any condition is not satisfied on or prior to the Expiration Date. If any of these events occur, subject to the termination rights described above, we may (i) return tendered old notes to you, (ii) extend the Exchange Offer and Consent

Solicitation and retain all tendered old notes until the expiration of the extended Exchange Offer and Consent Solicitation, or (iii) amend the Exchange Offer and Consent Solicitation in any respect by giving oral or written notice of such amendment to the Exchange Agent and making public disclosure of such amendment to the extent required by law.

Assuming completion of the Exchange Offer and the tender of all outstanding old notes as of December 31, 2019, we will have approximately 75.3 million shares of common stock outstanding, out of 200.0 million shares authorized. Approximately 212.9 million shares of common stock will be issuable upon conversion of the new notes. At the completion of the Exchange Offer, we therefore expect that we will not have sufficient authorized shares of common stock to issue upon conversion of the new notes. If the Exchange Offer is completed, we intend to call a special meeting of stockholders (or consider such matters at our upcoming annual meeting of stockholders) to be held as soon as reasonably practicable for stockholders of record as of a date occurring on or after the Closing Date (which will include holders of old notes who receive shares of common stock in the Exchange Offer) to consider the following matters: (1) a proposal to amend our charter to increase the number of authorized shares of our common stock available for issuance, in order to provide a sufficient number of authorized shares of common stock for the issuance of shares upon conversion of the new notes, (2) a proposal to amend our charter to effect a reverse stock split of shares of our common stock; and (3) any other matters properly brought before the meeting. In lieu of a special or annual meeting of stockholders, the Company may direct the actions set forth in clauses (1) and (2) above to be taken by written consent of the stockholders in accordance with applicable Maryland law and our charter and bylaws. Additionally, in lieu of seeking a vote of stockholders to effect a reverse stock split through an amendment to our charter, the Board of Directors may authorize the Company to undertake a reverse stock split of no greater than ten shares of common stock into one share of common stock, which the Board of Directors may authorize, without any action by stockholders, in accordance with Maryland law. In the indenture governing the new notes, we have agreed to use commercially reasonable efforts to cause items (1) and (2) of the preceding sentence to occur no later than August 31, 2020. Unless and until we obtain stockholder approval of the increase in the number of shares of our common stock authorized and available for issuance upon conversion of the new notes, if the new notes are converted, we may not elect physical settlement or combination settlement of any conversion of new notes if such election would result in the issuance of more than 124.7 million shares of common stock (in the aggregate for the new notes taking into account all prior or concurrent new notes conversions). In such circumstance, we would be required to pay cash to satisfy our settlement obligations. We may not have sufficient funds to satisfy such cash obligations and, in such circumstances, may not be able to arrange the necessary financing on favorable terms or at all.

We have not made a decision as to what circumstances would lead us to waive any condition, and any such waiver would depend on circumstances prevailing at the time of such waiver. Although we have no present plans or arrangements to do so, we reserve the right to amend, at any time, the terms of the Exchange Offer. We will give holders notice of such amendments as may be required by applicable law.

Subject to the terms and conditions of the Exchange Offer and Consent Solicitation, we will accept tendered old notes for exchange at the settlement date. If we do not accept tendered old notes for exchange in the Exchange Offer, the Proposed Amendments will not become effective.

Except for the requirements of applicable U.S. federal and state securities laws, we know of no federal or state regulatory requirements to be complied with or approvals to be obtained by us in connection with this Exchange Offer which, if not complied with or obtained, would have a material adverse effect on us.

No Appraisal Rights

Holders of the old notes do not have dissenters' rights of appraisal in connection with this Exchange Offer.

Exchange Agent

We have appointed Wilmington Savings Fund Society, FSB as the Exchange Agent for the Exchange Offer. You should direct questions, requests for assistance, and requests for additional copies of this prospectus and the letter of transmittal that may accompany this prospectus to the exchange agent addressed as follows:

Wilmington Savings Fund Society, FSB
Attention: Corporate Trust Middle Office
501 Car Road, Suite 100
Wilmington, DE 19809
CTMiddleOffice@wsfsbank.com
(T) 302-571-7014
(F) 302-421-9137

Delivery to an address other than set forth above will not constitute a valid delivery.

DESCRIPTION OF COMMON STOCK

General

The following descriptions are summaries of the material terms of our charter, amended and restated bylaws, and the Stockholders Agreement, and are qualified by reference to our charter, our amended and restated bylaws and the Stockholders Agreement. For more detailed information, please see copies of these documents which are included as exhibits to the registration statement of which this prospectus forms a part. We refer in this section to our articles of amendment and restatement, as amended, supplemented, corrected or restated from time to time as our charter, and we refer to our amended and restated bylaws as our bylaws.

Our authorized capital stock consists of 200,000,000 shares of capital stock, consisting of 200,000,000 shares of common stock, $0.01 par value per share. As of February 25, 2020, 3,649,658 shares of our common stock were issued and outstanding and held by approximately 335 stockholders of record.

Assuming completion of the Exchange Offer and the tender of all outstanding old notes as of December 31, 2019, we will have approximately 75.3 million shares of common stock outstanding, out of 200.0 million shares authorized. Approximately 212.9 million shares of common stock will be issuable upon conversion of the new notes. At the completion of the Exchange Offer, we therefore expect that we will not have sufficient authorized shares of common stock to issue upon conversion of the new notes. If the Exchange Offer is completed, we intend to call a special meeting of stockholders (or consider such matters at our upcoming annual meeting of stockholders) to be held as soon as reasonably practicable for stockholders of record as of a date occurring on or after the Closing Date (which will include holders of old notes who receive shares of common stock in the Exchange Offer) to consider the following matters: (1) a proposal to amend our charter to increase the number of authorized shares of our common stock available for issuance, in order to provide a sufficient number of authorized shares of common stock for the issuance of shares upon conversion of the new notes, (2) a proposal to amend our charter to effect a reverse stock split of shares of our common stock; and (3) any other matters properly brought before the meeting. In lieu of a special or annual meeting of stockholders, the Company may direct the actions set forth in clauses (1) and (2) above to be taken by written consent of the stockholders in accordance with applicable Maryland law and our charter and bylaws. Additionally, in lieu of seeking a vote of stockholders to effect a reverse stock split through an amendment to our charter, the Board of Directors may authorize the Company to undertake a reverse stock split of no greater than ten shares of common stock into one share of common stock, which the Board of Directors may authorize, without any action by stockholders, in accordance with Maryland law. In the indenture governing the new notes, we have agreed to use commercially reasonable efforts to cause items (1) and (2) of the preceding sentence to occur no later than August 31, 2020. Unless and until we obtain stockholder approval of the increase in the number of shares of our common stock authorized and available for issuance upon conversion of the new notes, if the new notes are converted, we may not elect physical settlement or combination settlement of any conversion of new notes if such election would result in the issuance of more than 124.7 million shares of common stock (in the aggregate for the new notes taking into account all prior or concurrent new notes conversions). In such circumstance, we would be required to pay cash to satisfy our settlement obligations. We may not have sufficient funds to satisfy such cash obligations and, in such circumstances, may not be able to arrange the necessary financing on favorable terms or at all.

Common Stock

The Company’s common stock carries the following rights:

Voting. Holders of our common stock are entitled to one vote per share of common stock owned as of the relevant record date on all matters submitted to a vote of stockholders. Except as otherwise provided in our charter, holders of common stock (as well as holders of any preferred stock of the Company entitled to vote with such common stockholders) vote together as a single class on all matters presented to the stockholders for their vote or approval, including the election of directors. There is no cumulative voting in the election of directors of the Company. Directors are elected by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. All other matters are determined by the affirmative vote of a majority of the votes cast by the stockholders present in person or represented by proxy at

the meeting and entitled to vote thereon, unless the matter is one upon which, under applicable law, the rules or regulations of any stock exchange applicable to the Company, our charter, the bylaws or the Stockholders Agreement, a different vote is required, in which case such provision shall govern and control the vote required to approve such matter.

Dividends and other Distributions. Subject to the preferential rights of holders of any other class or series of stock of the Company, holders of shares of common stock are entitled to receive dividends and other distributions on such shares if, as and when authorized by the Board of Directors of the Company out of assets legally available therefor and declared by the Company.

Liquidation, dissolution or winding up. Subject to the preferential rights of holders of any other class or series of stock of the Company, holders of shares of common stock are entitled to share ratably in the Company’s assets legally available for distribution to its stockholders in the event of the liquidation, dissolution or winding up of the Company after payment or establishment of reserves for all known debts and liabilities of the Company.

Restrictions on transfer. The common stock is not subject to restrictions on transfer as a result of the charter or the bylaws. Nevertheless, stockholders party to the Stockholders Agreement are subject to restrictions on transfer and there may be restrictions on transfer imposed by applicable securities laws or by the terms of other agreements entered into in the future. To the extent transfer restrictions apply, the Stockholders Agreement and the Maryland General Corporation Law (the “MGCL”) require the Company to place restrictive legends on its stock certificates, or state on such certificates that the Company will furnish a full statement of such restrictions on request and without charge.

Liability protection. Under Maryland law, stockholders generally are not personally liable for the Company’s debts or obligations solely as a result of their status as stockholders.

Other rights. Holders of shares of the common stock have no preference, conversion, exchange, sinking fund, redemption rights or appraisal rights and have no preemptive rights to subscribe for any securities of the Company, except as otherwise provided in the Stockholders Agreement.

The rights, preferences and privileges of the holders of the common stock will be subject to, and may be adversely affected by, the rights of the holders of any class or series of preferred stock that may be issued by the Company.

Preferred Stock

The Company has no shares of preferred stock authorized or outstanding. Under the charter, the Company’s Board of Directors is authorized, without further action by the Company’s stockholders, to classify or reclassify, in one or more classes or series, any unissued shares of common stock by setting or changing the number of shares constituting such class or series and the designation, preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of such shares and, if so classified or reclassified, the Company must file for record with the State Department of Assessments and Taxation of Maryland (the “SDAT”) articles supplementary in substance and form as prescribed by the MGCL. If shares of one class or series of stock are classified or reclassified into shares of another class or series of stock, the number of authorized shares of the former class will be automatically decreased and the number of authorized shares of the latter class or series will be automatically increased, in each case by the number of shares so classified or reclassified, so that the aggregate number of shares of stock of all classes that the Company has authority to issue will not be more than 200,000,000 provided, that, the total number of shares of stock of all classes that the Company may issue will be increased if the stockkholders approve the amendment to the charter discussed under the heading “Description of Common Stock—General.”

The Company believes that the power of the Board of Directors to classify or reclassify unissued shares of stock and thereafter to authorize the Company to issue such classified or reclassified shares of stock provides the Company with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise. However, the Board of Directors of the Company could authorize the issuance of shares of preferred stock that have priority over the shares of common stock with respect to dividends or other distributions or rights upon liquidation or with other terms and conditions, including voting rights, that could have the effect of delaying, deferring or preventing a transaction or a change of control of the Company that

might involve a premium price for holders of the common stock or that the common stockholders otherwise believe to be in their best interests. As a result of these and other factors, the issuance of preferred stock could have an adverse impact on the market price of the common stock.

Anti-Takeover Effects of Maryland Law and Our Charter, Bylaws and Stockholders Agreement

The MGCL and the Company’s charter and bylaws contain provisions that may delay, defer or prevent a change of control or other transaction that might involve a premium price for shares of the common stock or otherwise be in the best interests of the Company’s stockholders.

No Cumulative Voting. The Company’s charter does not provide for cumulative voting with respect to the election of directors or any other matters. The absence of cumulative voting in the election of directors may make it more difficult for a stockholder who acquires a substantial minority of shares to obtain representation on the Board of Directors. To the extent that it impedes the ability of a stockholder to obtain representation, the absence of cumulative voting may render more difficult any attempt by a minority stockholder or group of holders of voting shares of stock to change or influence the management or policies of the Company, and might be viewed as perpetuating incumbent management. In addition, the absence of cumulative voting may render more difficult or discourage entirely a merger, tender offer or proxy contest or the assumption of control by a holder of a large block of the Company’s stock. Mergers and other business combinations sometimes result in stockholders receiving a premium over the market price for their shares of stock.

Subtitle 8. Subtitle 8 of Title 3 of the MGCL (“Subtitle 8”) permits a Maryland corporation with a class of equity securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”) and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its Board of Directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of the following five provisions:

The Company has elected by a provision in the charter to be subject to the provisions of Subtitle 8 relating to a majority requirement for the calling of a stockholder-requested special meeting. Through provisions in the Company’s charter and the bylaws unrelated to Subtitle 8, the Company already vests in the Board of Directors the exclusive power to fix the number of directors. However, as permitted by the MGCL, by resolution of its Board of Directors, the Company has opted out of the provisions of Subtitle 8 relating to the classification of the board and the two-thirds vote requirement for removing a director. In addition, the Company is prohibited from classifying the Board of Directors pursuant to Subtitle 8, unless such decision is approved by the affirmative vote of a majority of the votes cast on the matter by stockholders entitled to vote generally in the election of directors. Subject to the above requirement regarding self-classification, in the future, the Board of Directors may elect, without stockholder approval, to elect to be subject to one or more of the other provisions of Subtitle 8.

Board Composition; Removal

The stockholders party to the Stockholders Agreement have agreed that (i) the number of Directors will be fixed from time to time by the Company’s Board of Directors as provided for in the Company’s charter and bylaws and (ii) certain stockholders will have the right to designate members of the Company’s Board of Directors until such time as such right may be lost in accordance with the Stockholders Agreement. Specifically, the Board of Directors shall consist of: (i) one director designated by Highbridge Capital Management, LLC (“Highbridge”); (ii) one director designated by Whitebox Advisors LLC (“Whitebox Advisors”); (iii) one director designated by SGF, LLC (“SGF”); (iv) one director, who must be an Independent Director, designated by mutual agreement of Corre Partners Management, LLC (“Corre”) and Wolverine Flagship Fund Trading Limited (“WFF”) (together with Highbridge, Whitebox Advisors and SGF, the “Designating Stockholders”); and (v) one director, who must

be the President and Chief Executive Officer of the Company. The term “Independent Director” is defined to refer to a director who qualifies as an “independent director” of the Company under NASDAQ Marketplace Rule 5605(a)(2) (assuming for this purpose that it applies to such person). As of the date of this prospectus, the Board of Directors consists of seven members.

In general, each committee of the Board of Directors must include a director designated by a Designating Stockholder, for so long as such Designating Stockholder retains its Board Designation Right (as defined in the Stockholders Agreement) and to the extent requested by such Designating Stockholder.

The Stockholder Parties have agreed, in the Stockholders Agreement, to vote all of their shares of the Company’s common stock and other voting equity securities, execute proxies or written consents, as the case may be, and take all other necessary action in order to ensure that the composition of the Board of Directors is as set forth in the Stockholders Agreement and to ensure that the Company’s charter and bylaws both (i) facilitate, and do not at any time conflict with, any provision of Stockholders Agreement and (ii) permit the Stockholder Parties (as defined in the Stockholders Agreement) to receive the benefits to which they are entitled under the Stockholders Agreement.

Meetings of Stockholders

Special meetings of stockholders may be called by the chairman of the Company’s Board of Directors, the president and the Board of Directors. Additionally, subject to the provisions of the bylaws, a special meeting of stockholders to act on any matter that may properly be considered at a meeting of stockholders must be called by the secretary of the Company upon the written request of stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter at such meeting who have requested the special meeting in accordance with the procedures specified in the bylaws. Only matters set forth in the notice of a special meeting of stockholders may be considered and acted upon at such a meeting.

Advance Notice Requirements

The bylaws provide that nominations of individuals for election as directors and proposals of business to be considered by stockholders at any annual meeting may be made only (1) pursuant to the Company’s notice of meeting, (2) by or at the direction of the Board of Directors, (3) by any stockholder (a) who was a stockholder of record both at the time of giving the notice required by the bylaws and at the time of the meeting, (b) who is entitled to vote at the meeting in the election of the individuals so nominated or on such other proposed business and (c) who has complied with the advance notice procedures of the bylaws, or (4) as otherwise provided in the Stockholders Agreement. Stockholders generally must provide notice of a stockholder proposal for the annual meeting to the secretary of the Company not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of preceding year’s annual meeting.

Only the business specified in the notice of the meeting may be brought before a special meeting of stockholders of the Company. Nominations of individuals for election as directors at a special meeting of stockholders may be made only (1) pursuant to the Company’s notice of meeting, (2) by or at the direction of the Board of Directors, (3) if the special meeting has been called in accordance with the bylaws for the purpose of electing directors, by a stockholder (a) who is a stockholder of record both at the time of giving the notice required by the bylaws and at the time of the special meeting, (b) who is entitled to vote at the meeting and (c) who has complied with the advance notice procedures of the bylaws, or (4) as otherwise provided in the Stockholders Agreement. Stockholders generally must provide notice of a stockholder proposal for a special meeting to the secretary of the Company not earlier than the close of business 120th day before such special meeting and not later than the close of business on the later of the 90th day before the special meeting or the tenth day after the first public announcement of the date of the special meeting.

A stockholder’s notice must contain certain information specified by the bylaws about the stockholder, its affiliates and any proposed business or nominee for election as a director, including information about the economic interest of the stockholder, its affiliates and any proposed nominee in the Company.

Amendment to Bylaws

The bylaws provide that, except as otherwise provided in the Company’s charter or the Stockholders Agreement, the Company’s Board of Directors has the exclusive power to make, alter or repeal the bylaws.

Business Combinations

Under the MGCL, certain “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as:

A person is not an interested stockholder under the statute if the Board of Directors of the corporation approved in advance the transaction by which the person otherwise would have become an interested stockholder.

After such five-year period, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the Board of Directors of the corporation and approved by the affirmative vote of at least:

These supermajority approval requirements do not apply if, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares.

The business combination statute may discourage others from trying to acquire control of the Company and increase the difficulty of consummating any offer.

Pursuant to the statute, the Board of Directors of the Company has by resolution exempted business combinations between the Company and any stockholder party to the Stockholders Agreement and between the Company and any other person, provided that in the latter case the business combination is first approved by the Board of Directors (including a majority of the Company’s directors who are not affiliates or associates of such person). Consequently, the five-year prohibition and the supermajority vote requirements will not apply to a business combination between the Company and any stockholder party to the Stockholders Agreement or to a business combination between the Company and any other person if the Board of Directors has first approved the combination. As a result, any person described in the preceding sentence may be able to enter into business combinations with the Company that may not be in the best interests of stockholders of the Company, without compliance with the supermajority vote requirements and other provisions of the statute. The Company cannot assure you that the Board of Directors will not amend or repeal this resolution in the future.

Exchange Listing

Our common stock is presently quoted on the OTCQX under the symbol “CTAM”.

Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. The transfer agent and registrar’s address is 6201 15th Avenue Brooklyn, New York 11219, and its telephone number is (800) 937-5449.

DESCRIPTION OF THE NEW NOTES

General

Certain terms used in this description are defined under the subheading “Certain Definitions.” In this description, (1) the term “Company” refers only to A. M. Castle & Co. and not to any of its Subsidiaries, and (2) the terms “we,” “our” and “us” each refer to the Company and its consolidated Subsidiaries assuming completion of the Transactions.

The Company will issue up to $100 million aggregate principal amount of 3.00% / 5.00% Convertible Senior Secured PIK Toggle Notes due 2024 (the “Notes”) under an indenture (the “Indenture”) among the Company, the Guarantors and Wilmington Savings Fund Society, FSB, as trustee (the “Trustee”) and Collateral Agent (as defined in “Certain Definitions” below). Except as set forth herein, the terms of the Notes will include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act.

The following description is only a summary of the material provisions of the Indenture and the Collateral Documents. It does not purport to be complete and is qualified in its entirety by reference to the provisions of the Indenture and the Collateral Documents, including the definitions therein of certain terms used below. We urge you to read the Indenture and the Collateral Documents because they, and not this description, will define your rights as Holders of the Notes.

Brief Description of the Notes

The Notes:

Guarantees

The Guarantors, will jointly and severally, unconditionally guarantee that the principal of and interest and premium, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders, the Trustee or the other Notes Secured Parties will be promptly paid in full or performed, all in accordance with the terms hereof and thereof and in case of any extension of time of payment or renewal of any Notes of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

The Guarantors will guarantee the Notes and, in the future, each Domestic Restricted Subsidiary or Restricted Subsidiary which guarantees any Indebtedness of the Company or any Guarantor, will guarantee the Notes, subject to certain exceptions and to release as provided below or elsewhere in this “Description of the New Notes.” Each of the Guarantees of the Notes will:

Not all of Company’s Subsidiaries will be required to guarantee the Notes. In particular, no Immaterial Subsidiaries or Unrestricted Subsidiaries of Company will be required to guarantee the Notes. As of the Issue Date, all of the domestic Subsidiaries of Parent (other than the Company) will be Guarantors.

The obligations of each Guarantor under its Guarantee will be limited as necessary to prevent the Guarantee from constituting a fraudulent conveyance under applicable law. This provision may not, however, be effective to protect a Guarantee from being voided under fraudulent transfer law, or may reduce the applicable Guarantor’s obligation to an amount that effectively makes its Guarantee worthless. If a Guarantee was challenged, it could also be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the Guarantor, and, depending on the amount of such indebtedness, a Guarantor’s liability on its Guarantee could be reduced to zero.

The Guarantors will agree that their obligations under the Indenture are unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and the Indenture.

Each Guarantor will agree that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed until payment in full of all obligations guaranteed. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders, the Trustee and the other Notes Secured Parties, on the other hand, (1) the maturity of the obligations guaranteed may be accelerated for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders, the Trustee, or the other Notes Secured Parties under the Note Guarantee.

No Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Company or another Guarantor, unless, (1) immediately after giving effect to such transaction, no Default or Event of Default exists; and (2) either: (a) the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger unconditionally assumes all the obligations of that Guarantor under the Indenture, its Note Guarantee and appropriate Collateral Documents pursuant to agreements reasonably satisfactory to the Trustee or (b) in the case of a sale or other disposition of all or substantially all of the assets of a Guarantor, such sale or other disposition is otherwise not prohibited by the Indenture. See “Successors—Merger, Consolidation or Sale of Assets.”

Each Guarantee by a Guarantor will provide by its terms that it will be released:

Ranking

The payment of the principal of, premium, if any, and interest on the Notes and the payment of any Guarantee will rank effectively equal to all existing and future pari passu Indebtedness of the Company or the relevant Guarantor, as the case may be.

The Notes and the Guarantees will be effectively subordinated in right of payment to all of the Company’s and the Guarantors’ existing and future Senior Credit Facility Obligations to the extent of the value of the collateral securing such Senior Credit Facility Obligations. As of December 31, 2019, the Company and the Guarantors had $127.8 million of Senior Credit Facility Obligations outstanding. As of December 31, 2019, the Company would also have had (1) approximately $15.4 million of additional borrowing capacity under the Senior Credit Facility, which, if borrowed, would be Senior Credit Facility Obligations and (2) the option to raise additional commitments under the Senior Credit Facility up to $25 million, which if borrowed, would be Senior Credit Facility Obligations.

Although the Indenture will contain limitations on the amount of additional Indebtedness that Company and Company’s Restricted Subsidiaries (including the Guarantors) may incur, under certain circumstances the amount of such additional Indebtedness could be substantial and under certain circumstances such additional Indebtedness may be secured. See “Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.”

Security

Collateral

General

The Notes and the Guarantees will be secured by Liens on the Collateral (as defined below) on an equal and ratable basis with all pari passu Indebtendess. These Liens will be junior in priority to the Liens securing the Senior Credit Facility Obligations in respect of Collateral and subject to Permitted Liens.

The Liens on the Collateral that will secure the Notes and Guarantees will be granted under the Collateral Documents in favor of the Collateral Agent for the benefit of the Holders of the Notes.

Subject to the collateral and guarantee requirements in the Indenture and the Security Agreement, the collateral comprises substantially all of the assets and property of the Company and the Guarantors, whether real, personal or mixed, other than the Excluded Assets (as defined below) and other than any assets released from the collateral (the “Collateral”).

The Collateral will exclude certain assets and property (“Excluded Assets”), including, without limitation, the following: