Starco Brands Enters Material Agreement, Incurs Financial Obligation

TL;DR

Starco Brands just signed a big deal and took on debt. Watch this space.

AI Summary

Starco Brands, Inc. announced on May 31, 2024, that it entered into a Material Definitive Agreement and created a Direct Financial Obligation. The filing details financial obligations and exhibits related to these events, which occurred on May 24, 2024.

Why It Matters

This filing indicates Starco Brands has entered into a significant new agreement that will likely impact its financial structure and operations.

Risk Assessment

Risk Level: medium — Entering into material definitive agreements and incurring financial obligations can introduce financial risks and operational changes that may affect the company's performance.

Key Players & Entities

• Starco Brands, Inc. (company) — Filer of the 8-K report
• May 31, 2024 (date) — Date of the report
• May 24, 2024 (date) — Date of the earliest event reported

FAQ

Key Financial Figures

• $12.5 million — e of credit in the amount not to exceed $12.5 million at any one time, or the Revolving Loan
• $1.5 million — ed by a Permitted Overadvance Amount of $1.5 million. The first $1.5 million in Revolving Lo
• $125,000 b — Overadvance Amount shall be reduced by $125,000 beginning on June 1, 2024, and the first
• $1 million — nt by an aggregate amount not less than $1 million not exceeding $2.5 million. Such reques
• $2.5 million — not less than $1 million not exceeding $2.5 million. Such request may be accepted by Lender

Filing Documents

• form8-k.htm (8-K) — 53KB
• ex10-1.htm (EX-10.1) — 819KB
• ex10-2.htm (EX-10.2) — 39KB
• 0001493152-24-022241.txt ( ) — 1233KB
• stcb-20240531.xsd (EX-101.SCH) — 3KB
• stcb-20240531_lab.xml (EX-101.LAB) — 33KB
• stcb-20240531_pre.xml (EX-101.PRE) — 22KB
• form8-k_htm.xml (XML) — 3KB

From the Filing

UNITED SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 31, 2024 (May 24, 2024) STARCO BRANDS, INC . (Exact name of Company as specified in its charter) Nevada 000-54892 27-1781753 (State or other jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification Number) 706 N Citrus Ave. Los Angeles , CA (Address of principal executive offices) ( 323 ) 266-711 (Registrant's Telephone Number) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A common stock STCB OTC Markets Group OTCQB tier Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below): Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter). Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act Item 1.01 Entry into a Material Definitive Agreement Loan and Security Agreement On May 24, 2024, (i) Starco Brands, Inc., a Nevada corporation (" Starco " or the " Company "), (ii) and each of Starco's subsidiaries, Whipshots Holdings, LLC, a Delaware limited liability company (" Whipshots Holdings "), Whipshots, LLC, a Wyoming limited liability company (" Whipshots "), The AOS Group Inc., a Delaware corporation (" AOS Group "), Skylar Body, LLC, a Delaware limited liability company (" Skylar "), Soylent Nutrition, Inc., a Delaware corporation (" Soylent "; and together with Starco, Whipshots Holdings, Whipshots, AOS Group, Skylar, each individually, a " Borrower " and collectively, the " Borrowers "), and (iii) Gibraltar Business Capital, LLC, a Delaware limited liability company (the " Lender ") entered into a Loan and Security Agreement (the " Loan and Security Agreement "), allowing Starco Brands to reduce its long term debt and expand its access to working capital. Capitalized terms not otherwise defined in this Item 1.01 Loan and Security Agreement will have the meanings set forth in the Loan and Security Agreement. The Loan and Security Agreement provides for the following: A revolving line of credit in the amount not to exceed $12.5 million at any one time, or the Revolving Loan Commitment Amount in return for a first priority security interest in the Collateral. The Revolving Commitment Amount is supplemented by a Permitted Overadvance Amount of $1.5 million. The first $1.5 million in Revolving Loans drawn on this line will be considered permitted overadvances, and the Permitted Overadvance Amount shall be reduced by $125,000 beginning on June 1, 2024, and the first day of each month thereafter. The aggregate principal balance of all Revolving Loans outstanding at any time shall not exceed the Revolving Loan Availability, which is equal to the lesser of the Revolving Loan Commitment Amount or the Borrowing Base Amount. The Revolving Line matures on May 24, 2026, and such Maturity Date will be automatically extended for one (1) year, subject to the satisfaction of certain terms and conditions described in the Loan and Security Agreement. Each Revolving Loan advanced under the Revolving Loan Commitment bears interest at a rate per annum equal to One Month Term SOFR plus the Applicable Margin. If a Revolving Loan or any portion thereof is considered a part of the Permitted Overadvance Amount under the Loan and Security Agreement, the Applicable Margin for such loan shall be increased by an additional two percent (2.00%) per annum. Revolving Loans may be repaid at any time and reborrowed up to, but not including the Maturity Date. On the Maturity Date, the outstanding aggregate principal balance of all Revolving Loans shall be due and payable. Accrued and unpaid interest on the unpaid principal balance of the Revolving Loans shall be due and payable commencing on June 1, 2024 and on the first date of each calendar month thereafter. All accrued and unpaid interest shall be due and payabl

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