LONG ISLAND ICED TEA CORP. (NASDAQ:LTEA) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a RegistrantItem 2.03.
On November 27, 2017, Long Island Iced Tea Corp. (the “Company”) completed a bridge financing, to which the Company received cash of $750,000 (the “Financing Amount”), less certain fees as described below. The bridge financing is to an Agreement for the Purchase and Sale of Future Receipts (“Agreement”) with Radium2 Capital Inc. (“Radium”). The Agreement provides for the Company to sell to Radium, without recourse, 15% (the “Specified Percentage”) of the proceeds from the Company’s future sales (the “Future Receipts”), up to a total amount of $986,250, for a purchase price equal to the Financing Amount. The Company incurred estimated expenses of $10,000 in connection with this Agreement, including an origination fee of $7,500, which was deducted from the Financing Amount. The Agreement further provides for a 15% discount on the amount of Future Receipts to be paid to Radium, if the entire amount is paid in full within 126 business days from the date of funding.
The Specified Percentage of the Future Receipts will be paid by the Company to Radium on a weekly basis. The Agreement contains certain customary events of default, including the Company interfering with Radium’s right to collect the weekly amount, the Company materially violating any term or covenant of the Agreement, and the Company using multiple depository accounts without the prior written consent of Radium. If an event of default occurs, the Specified Percentage will become 50% and the full uncollected Purchase Amount will become immediately due and payable.
There is no payment schedule and the Company will have no obligation to pay any amount to Radium, except to the extent of its Future Receipts as described above. However, the Company’s management expects that the obligation to pay the Future Receipts will be classified as indebtedness under applicable accounting principles.
About LONG ISLAND ICED TEA CORP. (NASDAQ:LTEA)
Long Island Iced Tea Corp. is a holding company operating through its subsidiary, Long Island Brand Beverages, LLC (LIBB). The Company is engaged in the production and distribution of Non-Alcoholic Ready-to-Drink (NARTD) iced tea in the beverage industry. It is organized around its brand, Long Island Iced Tea. Long Island Iced Tea is sold primarily on the East Coast of the United States through a network of national and regional retail chains and distributors. The Company produces brewed tea, using black tea leaves, purified water and natural cane sugar or sucralose. The Company’s Long Island Iced Tea’s flavors include lemon, peach, raspberry, guava, mango, diet lemon, diet peach, sweet tea, green tea and honey, and half tea and half lemonade. It also offers lower calorie iced tea in over 12 ounce bottles. The lower calorie flavor options include mango, raspberry and peach. The Company’s products include All-Natural Tea, Diet Tea, Fruit-Flavored Tea, Organic Tea and Herbal Tea.
