Trident Brands Incorporated (OTCMKTS:TDNT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement
On November 30, 2020 (“Effective Date”), Trident Brands Incorporated, aNevada corporation (the “Company”), entered into that certain Fourth Amendment to Convertible Promissory Notes ( “Fourth Amendment”), with Fengate Trident LP, the holder of the Notes (the “Note Holder”).
By way of background, immediately prior to the transactions reported hereby, The Company was indebted to the Note Holder in the aggregate principal amount of $22.3 million as follows: $12.3 million (the “2016 Convertible Notes”) and $10 million (the “Amended SPA Notes”). In addition, the Company owed aggregate accrued interest of $5,359,392 on the 2016 Convertible Notes and the Amended SPA Notes.
Conversion of $17.7 million of Indebtedness into Company Equity
In connection with the Fourth Amendment, the Note Holder has agreed to convert aggregate principal and accrued interest of $17,659,392 into equity of the Company, as more fully described below.
As of the Effective Date, the Company and Note Holder have agreed that the Company will issue the Note Holder 29,432,320 shares of Company Preferred Stock in full and complete satisfaction of (i) all amounts owing under the 2016 Convertible Notes through November 30, 2020 (including accrued interest thereon) and (ii) all accrued interest on the Amended SPA Notes through November 30, 2020. This transaction represents the conversion of aggregate principal and accrued interest of $17,659,392 into Preferred Stock at the rate of $.60 per share. The $17,659,392 is comprised of $12.3 million of principal owing under the 2016 Convertible Notes and all accrued interest owing under both the 2016 Convertible Notes and the Amended SPA Notes (an aggregate of $5,359,392).
Under the terms of the Fourth Amendment, the Preferred Stock shall be (i) voting shares, with the same voting rights as common shares, except the Preferred Stock shall have no vote in respect of election of directors, (ii) entitled to such dividends as the Board of Directors of the Company may in its discretion declare (and no dividends may be declared on the Company’s other classes of shares unless a dividend is declared on the Preferred Stock), (iii) have a preference in liquidation ahead of all other classes of Company shares, (iv) be entitled upon a sale of the Company (to be further defined in definitive agreements) to receive the consideration that would be payable in respect of that number of shares of common stock of the Company equal to the number of shares of Preferred Stock (on a one-for one basis with the Company common stock), and (v) otherwise on such other terms and conditions as are mutually agreeable and not inconsistent with the foregoing.
The consummation of the foregoing transaction is subject to (i) authorization and issuance of the Preferred Stock, which is subject to approval of the requisite number of common shares of the Company, in accordance with Nevada law and the Company’s organizational documents, and (ii) Note Holder’s obligation to remain in compliance with regulations governing its ownership of voting shares.
The Company and Note Holder have undertaken to consummate the foregoing transactions prior to January 31, 2021.
Amendment of Terms of $10 million Amended SPA Notes
The Fourth Amendment also amends the Amended SPA Notes (aggregate principal amount of $10 million) as of the Effective Date, as follows:
Except as modified by the Fourth Amendment, the Notes, as previously amended, remain in full force and effect.
About Trident Brands Incorporated (OTCMKTS:TDNT)
Trident Brands Incorporated is focused on branded consumer products and food ingredients. The Company maintains a portfolio of branded consumer products, including nutritional products and supplements under the Everlast and Brain Armor brands, and functional food ingredients under the Oceans Omega brand. The Company’s brands are focused on the supplements and nutritional product, and heart and brain health categories. The Company’s subsidiaries include Trident Brands Canada Ltd., Sports Nutrition Product Inc. and Brain Armor Inc. Trident Brands Canada Ltd. holds various banking facilities. Sports Nutrition Product Inc. holds the license to market and sell products in the nutritional foods and supplements categories under the Everlast brand. The Brain Armor product is a plant-based docosahexaenoic acid (DHA) supplement designed specifically for the needs of athletes. Its products under the Oceans Omega brand have application as a functional food ingredient.