Eastman Kodak has recouped almost all of the $3.9 million five former executives raised last year by exercising stock options they were thought to have lost, in an embarrassing episode that forced the pioneer of the film era to revise its internal controls.

Kodak recovered $3.6 million of the proceeds and expects to collect $2 million of the $3 million in withholding taxes associated with the former employees’ transactions, according to a securities filing showing it had imposed new measures to address “control gaps”. ”.

The former executives capitalized on a surge in Kodak shares last July after signing a letter of intent regarding a possible $765 million loan from the US government to start manufacturing generic drug ingredients.

The shares crashed shortly after the executives sold their shares, and Kodak said last September the loan was “on hold.” He has since given up hope of receiving the money from the US International Development Finance Corporation, known as DFC, this week’s filing with the Securities and Exchange Commission confirmed.

But the loss-making imaging company is still grappling with the fallout from the trading volatility it has witnessed during this period, which has drawn intense scrutiny from politicians, regulators and shareholders. His filing confirmed that he had yet to resolve investigations by the SEC, the New York Attorney General and several congressional committees.

Although a review commissioned by independent board members found no evidence of insider trading, the company still faces lawsuits alleging violations of securities laws or breaches of fiduciary duties. .

Kodak’s comments came weeks after it landed a refinancing that will bring in at least $210 million for the struggling company and push back its debt maturities in a way the company says would remove “substantial doubt” about his ability to continue. worry.

“We’ve taken stock,” David Bullwinkle, Kodak’s chief financial officer, told the Financial Times. “We now have the opportunity to put this extra cash to work” to advance a growth strategy focused on the company’s expertise in advanced materials, printing and chemicals.

S&P Global, the credit rating firm, said the new funds would reduce Kodak’s interest and dividend payments and leave it with no “default catalyst” over the next two years. He warned, however, that the group’s capital structure remained “unsustainable without a substantial improvement in operating performance”.

Regulatory, legal and financial issues weighing on the company have not deterred two new investors from backing Kodak in recent weeks.

The company has agreed to new financing that includes a five-year, $275 million deferred term loan from Kennedy Lewis Investment Group that bears an interest rate of 12.5%. Kennedy Lewis, who previously worked with Kodak Chairman and CEO Jim Continenza, also bought 1 million shares and invested $25 million in a new convertible note.

Kodak has raised $75 million through a convertible stock sale to investment firm Grand Oaks Capital, which was set up by PayChex founder Tom Golisano, who is based in Kodak’s hometown of Rochester, New York. Grand Oaks has agreed to purchase an additional $25 million of convertible stock once the investment receives regulatory approval.

Kodak used $100 million of the new funds to buy back some of its outstanding convertible stock.

Their investments gave Kennedy Lewis and Grand Oaks the right to each appoint one person to Kodak’s board of directors. The pair are expected to feature Golisano and Kennedy Lewis co-founder Darren Richman, according to people briefed on the matter.

Kodak reported this week that its revenue fell from $1.24 billion to $1.03 billion last year, when it cut 250 jobs and reported a net loss of $541 million due to charges. and one-time expenses. Bullwinkle noted that it was successful in generating cash in the third and fourth quarters, saying, “We haven’t done this for a long time.”

The company continued to pursue its hopes of breaking into the pharmaceutical ingredients business, an expansion the DFC loan was meant to boost. Kodak is using some of its newly raised money for this work, one of the people familiar with the funding added.

“They have the ability and they have the manufacturing know-how,” this person said. “Yes, the government at some point was going to contract with Kodak to manufacture critical antibiotic ingredients. It became a political lightning rod and obviously there was no wrongdoing, but they should have understood that there would be a lot of publicity around it.

Kodak’s filing nonetheless acknowledged the damage it had done to its brand value, saying it had reduced the book value of its trade name from $21 million to $18 million last year to reflect the impact of the Covid-19 pandemic.