Farmmi Faces Redemption Notice for $6.44M Convertible Note

TL;DR

**Farmmi got a redemption notice for a $6.44M note and hasn't paid it yet, watch for cash impact or dilution.**

AI Summary

Farmmi, Inc. (FAMI) reported on January 18, 2024, that Streeterville Capital, LLC delivered a Redemption Notice on December 26, 2023, for a Convertible Promissory Note originally valued at $6,440,000. This note, issued on September 26, 2022, was previously amended on November 13, 2023, to extend its term until September 28, 2024. The company has not yet redeemed this notice, which matters to investors because it indicates a potential cash outflow or share dilution if Farmmi chooses to satisfy the redemption in cash, ordinary shares, or a combination.

Why It Matters

This filing indicates Farmmi, Inc. is facing a demand for repayment on a significant convertible note, which could lead to cash drain or dilution of existing shares if satisfied with stock.

Risk Assessment

Risk Level: medium — The company has an outstanding redemption notice for a significant debt, which could impact its financial liquidity or lead to share dilution.

Analyst Insight

An investor should monitor Farmmi's next steps regarding the $6.44 million redemption notice, as it could lead to significant share dilution or a drain on cash reserves. Evaluate the company's cash position and outstanding share count carefully.

Key Numbers

• $6.44M — Original Principal Amount (The face value of the Convertible Promissory Note issued to Streeterville Capital, LLC.)

Key Players & Entities

• Farmmi, Inc. (company) — the registrant and issuer of the convertible note
• Streeterville Capital, LLC (company) — the holder of the convertible promissory note
• $6,440,000.00 (dollar_amount) — the original principal amount of the Convertible Promissory Note
• September 26, 2022 (date) — date the Convertible Promissory Note was issued
• November 13, 2023 (date) — date the Amendment to Convertible Promissory Note was entered into
• September 28, 2024 (date) — extended term end date of the Convertible Promissory Note
• December 26, 2023 (date) — date Streeterville delivered the Redemption Notice
• January 12, 2024 (date) — date of the partial filing, indicating ongoing developments

Forward-Looking Statements

• Farmmi, Inc. will likely need to address the redemption notice soon, potentially through cash payment or issuing new shares. (Farmmi, Inc.) — medium confidence, target: Q1 2024
• The stock price of Farmmi, Inc. could experience volatility as investors react to the uncertainty surrounding the note's redemption. (Farmmi, Inc. stock) — medium confidence, target: Near-term

FAQ

Key Financial Figures

• $6,440,000.00 — 022 in the original principal amount of $6,440,000.00 (the "Note") pursuant to a Securities P
• $6,955,830.92 — ing outstanding balance on the Note was $6,955,830.92 as of the date of the Forbearance Agree

Filing Documents

• fami_6k.htm (6-K) — 15KB
• fami_ex991.htm (EX-99.1) — 36KB
• 0001477932-24-000268.txt ( ) — 52KB

From the Filing

fami_6k.htm UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of January 2024 Commission File Number: 001-38397 Farmmi, Inc. (Translation of registrant's name into English) Fl 1, Building No. 1, 888 Tianning Street, Liandu District Lishui, Zhejiang Province People's Republic of China 323000 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F Form 40-F EXPLANATORY NOTE As previously reported, on September 26, 2022, Farmmi, Inc., a Cayman Islands company (the "Company"), issued to Streeterville Capital, LLC, a Utah limited liability company ("Streeterville"), a Convertible Promissory Note dated September 26, 2022 in the original principal amount of $6,440,000.00 (the "Note") pursuant to a Securities Purchase Agreement dated September 26, 2022 between Streeterville and the Company (the "Purchase Agreement," and together with the Note and all other documents entered into in conjunction therewith, the "Transaction Documents"). Under the Note, Streeterville has the right to redeem the Note six months after the Purchase Price Date, and redemptions may be satisfied in cash, Ordinary Shares or a combination of cash and Ordinary Shares at the Company's election. On November 13, 2023, the Company and Streeterville entered into an Amendment to Convertible Promissory Note (the "Amendment") extending the term of the Note from twelve months to twenty four months from the Purchase Price Date, or until September 28, 2024. On December 26, 2023, Streeterville delivered a Redemption Notice (the "December Redemption Notice") that has not been redeemed by the Company. On January 12, 2024, the Company and Streeterville entered into a Forbearance Agreement (the "Forbearance Agreement") under which Streeterville agreed to withdraw the December Redemption Notice and not to seek to enforce any remedies under the Note with respect to the December Redemption Notice. In exchange for the forbearance, the Company agreed to pay to Streeterville a forbearance fee equal to ten percent (10%) of the outstanding balance of the Note (the "Forbearance Fee"). Following the application of the Forbearance Fee, the total remaining outstanding balance on the Note was $6,955,830.92 as of the date of the Forbearance Agreement. The parties agreed that the Note, as amended, shall remain in full force and effect and, except with respect to the December Redemption Notice, the Forbearance Agreement shall not operate as a waiver of or an amendment to Streeterville's rights or remedies under the Note or the Transaction Documents. 2 The foregoing descriptions of the Forbearance Agreement are summaries of the material terms of such agreement, do not purport to be complete and are qualified in their entirety by reference to the form of the Forbearance Agreement, which is filed as Exhibits 99.1 to this report and incorporated herein by reference. Exhibits Exhibit Number Description of Exhibit 99.1 Forbearance Agreement dated January 12, 2024, by and between Streeterville Capital, LLC and Farmmi, Inc. 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Farmmi, Inc. Date: January 18, 2024 By: /s/ Yefang Zhang Yefang Zhang Chief Executive Officer 4

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