Soupman, Inc. (OTCMKTS:SOUP) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
Entry into a Material Definitive Agreement.
As previously disclosed, On June 13, 2017, Soupman, Inc. (the “Company”) filed a voluntary petition (the “Chapter 11 Case”) under Chapter 11 (“Chapter 11”) of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Court”). The Chapter 11 Case is being administered under the caption In re The Original Soupman, Inc. (Case No. 1:17-bk-11313). In connection with the Chapter 11 Case, the Company, The Original Soupman, Inc., Kiosk Concepts, Inc., (collectively the “Borrowers” or “Debtors”), and Soupman Lending LLC, (the “Lender”), entered into aSenior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement dated July17, 2017 (the “DIP Loan Agreement”).
The DIP Loan Agreement provides for a senior secured super priority term loan in a principal amount of up to $1,700,000.00 (the “DIP Facility”) to Sections 364(c) and 364(d) of the Bankruptcy Code to allow the Company to continue to operate its business and manage its properties as a debtor and a debtor-in-possession to the Company’s filing of a voluntary petition for relief under the Bankruptcy Code in the Court.
The obligations of the Company under the DIP Facility are to be (i) entitled to super-priority administrative expense claim status to the Bankruptcy Code with priority over any administrative expenses of a kind specified in the Bankruptcy Code, subject to a carve-out for certain specified bankruptcy-related fees and expenses; and (ii) secured, to the Bankruptcy Code, by a first-priority perfected security interest and lien on all or substantially all of the Company’s and its debtor subsidiaries’ respective assets and the Company’s equity interests in its subsidiaries, subject to certain carve-outs.
The maturity date of the DIP Loan Agreement is the earliest of (i) August 31, 2017; (ii) the effective date of a Plan of Reorganization (as defined in the DIP Loan Agreement); (iii) the date that is thirty (30) days after the date of the Interim Order (as defined in the DIP Loan Agreement) if the Final Order (as defined in the DIP Loan Agreement) has not yet been entered; (iv) entry of an order converting any of the Chapter 11 Cases (as defined in the DIP Loan Agreement) to a case under chapter 7 of the Bankruptcy Code or dismissing any of the Chapter 11 Cases; (v) the closing of a sale of substantially all of the Debtors’ assets and (vi) the acceleration of the outstanding Obligations (as defined in the DIP Loan Agreement) under the DIP Facility or termination of the commitments under the DIP Facility, including, without limitation, as a result of the occurrence of an Event of Default (as defined in the DIP Loan Agreement). Under the DIP Loan Agreement, an Event of Default includes the removal or replacement of board, the Chief Restructuring Officer, or the Chief Executive Officer.
Subject to certain exceptions, advances under the DIP Loan Agreement will be secured by a first priority perfected security interest in substantially all of the assets of the Debtors. The security interests and liens are subject only to certain carve outs, as set forth in the DIP Loan Agreement. Advances under the DIP Loan Agreement are subject to certain covenants, including, without limitation, covenants related to the incurrence of additional debt, liens, the Company’s failure to comply with the approved budget and certain bankruptcy related covenants, in each case as set forth in the DIP Loan Agreement. The financing provided for under the DIP Loan Agreement accelerates if the Company breaches a covenant or Chapter 11 Milestone (as defined in the DIP Loan Agreement) under the DIP Loan Agreement and the Lender declares a default.
The Final Order authorizing the Debtors to enter into the DIP Loan Agreement and obtain postpetition financing of up to $1,700,000.00 was entered into by the Court on July 18, 2017.
A copy of the DIP Loan Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The above description of the DIP Loan Agreement is qualified in its entirety by the full text of such exhibit.
Item 2.03.
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the DIP Loan Agreement and DIP Facility is incorporated herein by reference into this Item 2.03.
Item 8.01.
Other Events.
The Company’s stockholders are cautioned that trading in shares of the Company’s common stock during the pendency of the Chapter 11 Case is highly speculative and poses substantial risks. Trading prices for shares of the Company’s common stock may bear little or no relationship to the actual recovery, if any, by holders in the reorganization. Accordingly, the Company urges extreme caution with respect to existing and future investments in its common stock.
Item 9.01
Financial Statements and Exhibits.
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Exhibit |
Description |
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10.1 |
July 17, 2017 Senior Secured, Super-Priority Debtor-in-Possession Loan and Security Agreement |
SOUPMAN, INC. ExhibitEX-10.1 2 soup_ex10z1.htm SENIOR SECURED,…To view the full exhibit click here
About Soupman, Inc. (OTCMKTS:SOUP)
Soupman, Inc. is a manufacturer and seller of soups to grocery chains, educational institutions and its franchisees. The Company manufactures and sells soups in three segments under the brand name, Original Soupman. In the grocery segment, the Company’s soups can be purchased in stores (such as Kroger, Publix, Safeway and HEB). The Company packages its soups in Tetra Recart shelf stable cartons. In the food services segment, the Company sells the Original Soupman soups in bulk frozen heat ‘n serve pouches to its franchisees and licensed locations. The Company is selling heat n’ serve pouches to a national restaurant chain. In the educational segment, it sells its bulk flash-frozen Original Soupman soups and other products to schools and colleges, such as the New York City Public school system. These additional products include vegetarian items, such a Mexicali Beans, Stewed Pinto Beans and Curried Chick Peas with Tomatillos.