false000147172700014717272022-10-242022-10-24

UNITED STATES
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): October 24, 2022
_______________________
Better Choice Company Inc.
(Exact name of Registrant as Specified in its Charter)
_______________________
Delaware001-4047783-4284557
(State or other Jurisdiction of Incorporation)(Commission File Number)(IRS Employer Identification No.)
12400 Race Track Road
Tampa, Florida 33626
(Address of Principal Executive Offices) (Zip Code)
_______________________________________________
(Registrant's Telephone Number, Including Area Code): (212) 896-1254
N/A
(Former name or former address, if changed since last report.)
_______________________
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:
☐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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value shareBTTRNYSE American
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
On October 24, 2022, Halo, Purely for Pets, Inc. (“Halo”), a wholly owned subsidiary of Better Choice Company Inc., a Delaware corporation (the “Company”), entered into a third amendment (the “Wintrust Amendment”) to its long-term credit facility with Old Plank Trail Community Bank, N.A., a Wintrust community bank (“Lender”) to increase the revolving line of credit from $7.5 million to $13.5 million. In addition, the Wintrust Amendment sets the interest rate on the credit facility to the U.S. Federal Fund Rate plus 3.75% (subject to a floor of 3.75%) and extends the maturity date of the credit facility from January 6, 2024 to October 31, 2024. The Wintrust Amendment also sets the amount of Halo's obligation to pledge a deposit account with Lender to a fixed amount of $6.3 million.
As part of the Wintrust Amendment, Halo used a portion of the increased revolving credit facility to repay and retire the outstanding term loan portion of the credit facility.
The foregoing description of the Wintrust Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Wintrust Amendment, the Revolving Note and the First Amendment to the Deposit Account Pledge Agreement attached to this Form 8-K as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated herein by reference.
Item 2.03    Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of the Registrant
The disclosure in item 1.01 and Exhibits 10.1, 10.2 and 10.3 of this Form 8-K are incorporated herein by reference.
Item 9.01    Financial Statements and Exhibits
(d) Exhibits.
ExhibitsDescription


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 hereunto duly authorized.
Better Choice Company Inc.
By:/s/ Sharla A. Cook
Name:Sharla A. Cook
Title:Chief Financial Officer
October 25, 2022
3
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT This Third Amendment to Loan and Security Agreement (this “Third Amendment”) is made and entered into as of the 24th day of October, 2022, by and between Old Plank Trail Community Bank, N.A., a national banking association, with an office located at 5300 W. 95th Street, Oak Lawn, Illinois 60453 (“Lender”), and Halo, Purely for Pets, Inc., a Delaware corporation, with its chief executive office located at 12400 Race Track Road, Tampa, Florida 33626 (“Borrower”). W I T N E S S E T H: WHEREAS, prior hereto, Lender provided certain loans, extensions of credit and other financial accommodations (the “Financial Accommodations”) to Borrower pursuant to (a) that certain Loan and Security Agreement dated as of January 6, 2021, as amended by that certain First Amendment to Loan and Security Agreement dated as of August 13, 2021 and that certain Second Amendment to Loan and Security Agreement dated as of March 25, 2022, each by and between Lender and Borrower (collectively, the “Loan Agreement”), and (b) the other documents, agreements and instruments referenced in the Loan Agreement or executed and delivered pursuant thereto; WHEREAS, prior hereto, TruPet LLC, a Delaware limited liability company (“TruPet”) and a party to that certain Guaranty and Security Agreement dated as of January 6, 2021, executed and delivered by TruPet, Better Choice Company Inc., a Delaware corporation, and Bona Vida, Inc., a Delaware corporation, to Lender, merged with and into Borrower, with Borrower as the surviving company; WHEREAS, Borrower desires Lender to, among other things, (a) increase the Maximum Revolving Loan from $7,500,000 to $13,500,000, a portion of which such proceeds will be used to retire and repay in full the aggregate outstanding balance of Term Loan A, (b) extend the Revolving Loan Termination Date from January 6, 2024 to October 31, 2024, (c) modify the pricing of the Loans and (d) modify certain financial covenants (collectively, the “Additional Financial Accommodations”); and WHEREAS, Lender is willing to provide the Additional Financial Accommodations, but solely on the terms and subject to the provisions set forth in this Third Amendment and the other agreements, documents and instruments referenced herein or executed and delivered pursuant hereto. NOW, THEREFORE, in consideration of the foregoing, the mutual promises and understandings of the parties hereto set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower hereby agree as set forth in this Third Amendment.

 
- 2 - I. Definitions. A. Use of Definitions. Except as expressly set forth in this Third Amendment, all terms which have an initial capital letter where not required by the rules of grammar are defined in the Loan Agreement. B. Amended Definitions. Effective as of the Third Amendment Effective Date, as hereinafter defined, Section 1.1 of the Loan Agreement is hereby amended by substituting the definitions set forth below for the corresponding definitions set forth in the Loan Agreement: “Applicable Margin” means (i) with respect any Index Rate Loan, the rate per annum equal to 3.75%, and (ii) with respect to Prime Rate Loans, the rate per annum equal to 1.50%. “Borrowing Base” means the total, without duplication, of the following: (1) up to 85% of the face amount of all then existing Eligible Accounts as set forth on the Borrowing Base Certificate delivered by Borrower to Lender from time to time, minus all finance charges and prompt payment, volume and all other discounts, credits or allowances which may be taken by or granted to Account Debtors; (2) plus the lesser of (a) 50% of the Value of all then existing Eligible Inventory, or (b) $5,400,000; (3) plus the lesser of (a) $6,300,000, or (b) the aggregate cash subject to a first priority Lien in favor of and pledged to Lender pursuant to the Deposit Account Pledge Agreement less the outstanding amount of Term Loan A; and (4) minus Reserves. “Change in Control” means the occurrence of any of the following events: (1) Parent shall cease to, directly or indirectly, own and control 100% of each class of the outstanding Equity Interests of Borrower; (2) Borrower shall cease to, directly or indirectly, own and control 100% of each class of the outstanding Equity Interests of each of its Subsidiaries; or (3) the granting by any of the Equity Interest Owners, directly or indirectly, of a security interest in its ownership interest in Borrower (other than to Lender). For the purpose hereof, the terms “control” or “controlling” means the possession of the power to direct, or cause the direction of, the management and policies of Borrower by contract or voting of securities or ownership interests. “Guarantors” means Parent and each other Person that signs a Guaranty in favor of Lender to secure the Liabilities. “Maximum Revolving Loan” means an amount equal to $13,500,000.00. “Revolving Loan Termination Date” means October 31, 2024. “Revolving Note” means that certain Revolving Note dated as of the Third Amendment

 
- 3 - Effective Date executed and delivered by Borrower to Lender in a maximum aggregate principal amount not to exceed Thirteen Million Five Hundred Thousand and no/100 ($13,500,000.00), as amended, renewed, restated or replaced from time to time. C. New Definition. Effective as of the date of this Third Amendment, Section 1.1 of the Loan Agreement is hereby amended by adding the following new definition thereto in the appropriate alphabetical order: “Third Amendment Effective Date” means October 24, 2022. II. Amendment to Loan Agreement. Effective as of the Third Amendment Effective Date, the Loan Agreement is hereby amended as follows: A. Minimum Liquidity. Section 9.4(A) of the Loan Agreement is hereby amended by deleting Section 9.4(A) of the Loan Agreement in its entirety and substituting therefor the following: “(A) Minimum Liquidity. Borrower shall maintain Liquidity, tested as of the last day of the fiscal quarter ending September 30, 2022, and as of the last day of each fiscal quarter thereafter, of not less than $8,500,000.” B. Schedule 4.4. Schedule 4.4 attached to the Loan Agreement is hereby amended by deleting Schedule 4.4 in its entirety and substituting therefor Schedule 4.4 attached to this Third Amendment and incorporated herein. III. Conditions Precedent. Lender’s obligation to provide the Additional Financial Accommodations to Borrower is subject to the full and timely performance of the following conditions precedent: A. Borrower executing and delivering, or causing to be executed and delivered to Lender, the following documents, each of which shall be in form and substance acceptable to Lender: (i) a fully executed original of this Third Amendment; (ii) a fully executed original Revolving Note; (iii) a fully executed First Amendment to Deposit Account Pledge Agreement; (iv) a Company General Certificate executed and delivered by Borrower to Lender; (v) a Reaffirmation of Guaranty and Security Agreement executed and delivered by Parent to Lender; (vi) a duly executed Disbursement Request of even date herewith executed and delivered by Borrower to Lender (the “Disbursement Request”); and

 
- 4 - (vii) such other agreements, documents and instruments as Lender may reasonably request. B. No Event of Default or Unmatured Event of Default exists under the Loan Agreement, as amended by this Third Amendment; C. No claims, litigation, arbitration proceedings or governmental proceedings not disclosed in writing to Lender prior to the date hereof shall be pending or known to be threatened against Borrower and no known material development not so disclosed shall have occurred in any claims, litigation, arbitration proceedings or governmental proceedings so disclosed which in the opinion of Lender is likely to materially or adversely affect the financial position or business of Borrower or the capability of Borrower to pay its obligations and liabilities to Lender; D. There shall have been no material or adverse change in the business, financial condition or results of operations since the date of Borrower’s most recently delivered financial statements to Lender; and E. The repayment in full in cash of all Term Loan A principal and interest (which shall occur contemporaneously with the closing of this Third Amendment) pursuant to the Disbursement Request. IV. Conflict. If, and to the extent, the terms and provisions of this Third Amendment contradict or conflict with the terms and provisions of the Loan Agreement, the terms and provisions of this Third Amendment shall govern and control; provided, however, to the extent the terms and provisions of this Third Amendment do not contradict or conflict with the terms and provisions of the Loan Agreement, the Loan Agreement, as amended by this Third Amendment, shall remain in and have its intended full force and effect, and Lender and Borrower hereby affirms, confirms and ratifies the same. V. Severability. Wherever possible, each provision of this Third Amendment shall be interpreted in such manner as to be valid and enforceable under applicable law, but if any provision of this Third Amendment is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be severed herefrom and such invalidity or unenforceability shall not affect any other provision of this Third Amendment, the balance of which shall remain in and have its intended full force and effect. Provided, however, if such provision may be modified so as to be valid and enforceable as a matter of law, such provision shall be deemed to be modified so as to be valid and enforceable to the maximum extent permitted by law. VI. Reaffirmation. Borrower hereby reaffirms and remakes all of the representations, warranties, covenants, duties, obligations and liabilities contained in the Loan Agreement, as amended hereby.

 
- 5 - VII. Fees, Costs and Expenses. A. Contemporaneously herewith, Borrower shall pay to Lender a fully earned non- refundable amendment fee in the amount of Seventy-Five Thousand and no/100 Dollars ($75,000.00). B. Borrower agrees to pay, upon demand, all fees, costs and expenses of Lender, including, but not limited to, reasonable attorneys’ fees, in connection with the preparation, execution, delivery and administration of this Third Amendment and the other agreements, documents and instruments executed and delivered in connection herewith or pursuant hereto. VIII. Reservation of Rights. Lender continues to reserve all of its rights and remedies, including all security interests, assignments and liens pursuant to the Loan Agreement and the Other Agreements, as well as any rights and remedies at law, in equity or otherwise. Nothing contained in this Third Amendment shall be or be deemed a waiver of any presently existing or any hereafter arising or occurring breach, default or event of default, nor shall preclude the subsequent exercise of any of Lender’s rights or remedies. IX. Choice of Law. This Third Amendment has been delivered and accepted in Chicago, Illinois, and shall be governed by and construed in accordance with the laws of the State of Illinois, regardless of the laws that might otherwise govern under applicable principles of conflicts of law as to all matters, including matters of validity, construction, effect, performance and remedies. X. Counterpart. This Third Amendment may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. A facsimile or email transmitted executed counterpart to this Third Amendment and the other agreements, documents and instruments executed in connection herewith will be deemed an acceptable original for purposes of consummating this Third Amendment and such other agreements, documents and instruments; provided, however, Borrower shall be required to deliver to Lender original executed signature pages in substitution for said facsimile or email transmitted signature pages upon Lender’s request therefor. XI. Waiver of Jury Trial. BORROWER AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY. [signature page follows]

 

 

 
SCHEDULE 4.4 CHIEF EXECUTIVE OFFICE AND COLLATERAL LOCATIONS Chief Executive Office: 12400 Race Track Road Tampa, Florida 33626 Other Locations: Fidelitone, Inc. 1260 Karl Court, Wauconda, Illinois 60084 BNG Phoebe, LLC 109 Persnickety Place Kiel, Wisconsin 53042

 
REVOLVING NOTE $13,500,000.00 Dated as of: October 24, 2022 Chicago, Illinois FOR VALUE RECEIVED, the undersigned, HALO, PURELY FOR PETS, INC., a Delaware corporation (“Borrower”), promises to pay to the order of OLD PLANK TRAIL COMMUNITY BANK, N.A., a national banking association (“Lender”), on or before the Revolving Loan Termination Date, the principal sum of Thirteen Million Five Hundred Thousand and no/100 Dollars ($13,500,000.00), or such lesser principal sum as Lender may have advanced to Borrower pursuant to Section 2.1(A) of that certain Loan and Security Agreement dated as of January 6, 2021, as amended by that certain First Amendment to Loan and Security Agreement dated as of August 13, 2021, that certain Second Amendment to Loan and Security Agreement dated as of March 25, 2022, and that certain Third Amendment to Loan and Security Agreement of even date herewith (the “Third Amendment”), each by and between Lender and Borrower (as further amended, renewed or restated from time to time, collectively, the “Loan Agreement”; capitalized terms used but not otherwise defined herein are used herein as defined in the Loan Agreement), together with interest thereon from the date hereof at the rate set forth in Section 2.3(A)(1) of the Loan Agreement. The principal amount of and interest on this Revolving Note (this “Note”) shall be payable in the manner and at the times set forth in the Loan Agreement and below. Interest shall be calculated on the basis of a 360-day year for the actual number of days in which any of the Liabilities remain outstanding and shall be paid as set forth in the Loan Agreement. Upon the occurrence of the Revolving Loan Termination Date or an Event of Default, whichever is first to occur, interest shall accrue upon the outstanding Liabilities at the Default Rate. Upon the occurrence and during the continuance of an Event of Default, Borrower waives the right to direct the application of any and all payments at any time or times hereafter received by Lender on account of the Liabilities, and Borrower agrees that Lender shall have the continuing exclusive right to apply and reapply any and all payments in such manner and in such order as Lender may deem advisable, including, but not limited to, the payment of any costs, fees and reasonable expenses due and owing by Borrower to Lender. The full and timely payment of the Liabilities and Borrower’s full and timely performance of the Covenants are secured by security interests, liens and encumbrances granted by Borrower to Lender pursuant to the Loan Agreement and the other agreements, instruments, documents and guaranties as heretofore, contemporaneously herewith or may hereafter be executed and delivered to Lender by Borrower and any other persons and entities, from time to time, as the case may be, evidencing, securing or guarantying the Liabilities and the Covenants including, but not limited to, the Guaranty, the Stock Pledge Agreement, the Deposit Account Pledge Agreement, the Intellectual Property Security Agreement and the other Loan Documents (collectively the “Collateral Documents”). If an Event of Default occurs and is continuing, at the option of Lender or the legal holder hereof, as the case may be, and without demand therefor or notice thereof from Lender to Borrower or any other person or entity, all of the Liabilities shall be immediately due and payable and shall be collectible immediately or at any time after such Event of Default. The acceptance by Lender

 
- 2 - of any partial payment of the Liabilities after an Event of Default will not establish a custom, or waive any of Lender’s rights or remedies pursuant to this Note, the Collateral Documents, at law, in equity or otherwise. Borrower and every endorser of this Note hereby each waive presentment, demand and protest, and notice of presentment, demand, protest, default, non-payment, maturity, release, compromise, amendment, modification, settlement, extension or renewal of the Liabilities or this Note, the Covenants, the Collateral Documents or any collateral or security for the Liabilities or the Covenants. Any forbearance by Lender or the legal holder hereof, as the case may be, in exercising any right or remedy pursuant to this Note or the Collateral Documents, at law, in equity or otherwise, shall not be or be deemed a waiver of nor shall preclude the subsequent exercise of any such right or remedy. If at any time or times before or after an Event of Default, Lender: (a) employs an accountant, consultant, counsel or any other representative or advisor (i) with respect to the Liabilities, this Note, the Collateral Documents or otherwise, (ii) to represent or consult with Lender in connection with any litigation, contest, dispute, suit or proceeding, or to commence, defend, intervene or take any other action in or with respect to any litigation, contest, dispute, suit or proceeding, whether initiated by Lender, Borrower or any other person or entity, in any way or respect arising from, relating to or in connection with the Liabilities, this Note, the Covenants, the Collateral Documents or any collateral or security for the Liabilities or the Covenants, or (iii) to enforce any of Lender’s rights or remedies; (b) takes any action or initiates any proceeding to protect, collect, sell, liquidate or otherwise dispose of any of the collateral or security for the Liabilities, the Covenants or the Collateral Documents; or (c) attempts to or enforces any of Lender’s rights or remedies against Borrower, then the reasonable costs and reasonable expenses so incurred by Lender (subject to the limitations regarding the incurrence of such fees and expenses contained in the Loan Agreement) shall be part of the Liabilities payable by Borrower to Lender upon demand with interest at the Default Rate until actually paid. Without limiting the generality of the foregoing, such reasonable costs and expenses shall include the fees, expenses and charges of attorneys, paralegals, accountants, investment bankers, appraisers, valuation and other specialists, experts, expert witnesses, auctioneers, court reporters, telefax charges, overnight delivery services, messenger services and reasonable expenses for travel, lodging and meals. Borrower represents and warrants to Lender that the Liabilities and Borrower’s use of the principal portion of the Liabilities are solely for proper business purposes and consistent with all applicable laws, including, without limitation, Illinois Compiled Statutes, Chapter 815, Act 205, Section 4 (815 ILCS 205/4). Borrower further represents and warrants to Lender and covenant unto Lender that Borrower are not in the business of extending credit for the purpose of purchasing or carrying margin stock within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System, and none of the principal portion of the Liabilities will be used to purchase or carry any margin stock or to extend credit to other persons or entities for the purpose of purchasing or carrying any margin stock. THIS NOTE IS EXECUTED AND DELIVERED BY BORROWER TO LENDER IN CHICAGO, ILLINOIS, AND SHALL BE GOVERNED, CONTROLLED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND STATUTES OF

 
- 3 - THE STATE OF ILLINOIS, AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, CHOICE OF LAW AND IN ALL OTHER RESPECTS. This Note shall inure to the benefit of Lender, the legal holder hereof and any of their respective successors and assigns, as the case may be, and shall be binding upon Borrower, and their respective successors and permitted assigns. If any provision of this Note is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be severed herefrom and such invalidity or unenforceability shall not affect any other provision of this Note, the balance of which shall remain in and have its intended full force and effect. However, if such invalid or unenforceable provision may be modified so as to be valid and enforceable as a matter of law, such provision shall be deemed to have been modified so as to be valid and enforceable to the maximum extent permitted by law. If any rate of interest described in this Note is greater than the rate of interest permitted to be charged or collected by applicable law, as the case may be, such rate of interest shall be reduced to the maximum rate of interest permitted to be charged or collected by applicable law. Borrower shall execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, any and all such further assurances and other agreements or instruments, and take or cause to be taken all such other action, as shall be reasonably necessary from time to time to give full effect to the Loan Documents and the transactions contemplated thereby. This Note evidences indebtedness incurred under, and is subject to the terms and provisions of, the Loan Agreement. The Loan Agreement, to which reference is hereby made, sets forth said terms and provisions, including those under which this Note may or must be paid prior to its due date or may have its due date accelerated. In the event of any conflict between this Note and the Loan Agreement, the Loan Agreement controls. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO BORROWER AS SET FORTH IN THE LOAN AGREEMENT IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE, WITH A COPY OF SERVICE SENT TO BORROWER’S ATTORNEY AS SET FORTH IN SECTION 12.14 OF THE LOAN AGREEMENT. Borrower and Lender irrevocably agrees, and hereby consents and submits to the non- exclusive jurisdiction of the Circuit Court of Cook County, Illinois, and the United States District Court for the Northern District of Illinois, Eastern Division, with regard to any actions or proceedings arising from, relating to or in connection with the Liabilities, this Note, any of the Covenants, the Collateral Documents or any collateral or security for the Liabilities or the Covenants. BORROWER HEREBY WAIVES ITS RIGHT TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION FILED IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION. BORROWER AND LENDER EACH HEREBY WAIVES THEIR RESPECTIVE RIGHT TO TRIAL BY JURY.

 
- 4 - This Note is a renewal, replacement, extension and amendment (but not a payment or refinancing) of that certain Revolving Note made by Borrower in favor of Lender dated as of August 13, 2021, in the original principal amount of $7,500,000.00 (the “Prior Note”). The indebtedness evidenced by the Prior Note is continuing indebtedness evidenced hereby, and nothing herein shall be deemed to constitute a payment, settlement or novation of the Prior Note, or to release or otherwise adversely affect any lien, mortgage or security interest securing such indebtedness or any rights of the Lender against any guarantor, surety or other party primarily or secondarily liable for such indebtedness. [Signature Page Follows]

 

 
FIRST AMENDMENT TO DEPOSIT ACCOUNT PLEDGE AGREEMENT THIS FIRST AMENDMENT TO DEPOSIT ACCOUNT PLEDGE AGREEMENT (this “First Amendment”) is made and entered into as of October 24, 2022, by and between HALO, PURELY FOR PETS, INC., a Delaware corporation (“Pledgor”), and OLD PLANK TRAIL COMMUNITY BANK, N.A., a national banking association (“Lender”). W I T N E S S E T H: WHEREAS, prior hereto, Lender provided certain loans, extensions of credit and other financial accommodations to Pledgor pursuant to (a) that certain Loan and Security Agreement dated as of January 6, 2021, as amended by that certain First Amendment to Loan and Security Agreement dated as of August 13, 2021, that certain Second Amendment to Loan and Security Agreement dated as of March 25, 2022, and that certain Third Amendment to Loan and Security Agreement of even date herewith (the “Third Amendment to Loan Agreement”), each by and between Lender and Pledgor, as may be further amended or restated from time to time (collectively, the “Loan Agreement”), (b) that certain Deposit Account Pledge Agreement dated as of August 13, 2021, by and between Pledgor and Lender (the “Pledge Agreement”), and (c) the other documents, agreements and instruments referenced in the Loan Agreement or executed and delivered pursuant thereto; WHEREAS, Pledgor has requested that Lender provide certain additional financial accommodations to Pledgor pursuant to the Third Amendment to Loan Agreement (the “Additional Financial Accommodations”); and WHEREAS, Lender is willing to provide the Additional Financial Accommodations, but solely on the terms and subject to the provisions set forth in the Third Amendment to Loan Agreement, this First Amendment and the other agreements, documents and instruments referenced therein or executed and delivered pursuant thereto. NOW, THEREFORE, in consideration of the foregoing, the mutual promises and understandings of the parties hereto set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lender and Pledgor hereby agree to amend the Pledge Agreement on the terms set forth in this First Amendment. I. Definitions. Except as expressly set forth in this First Amendment, all terms which have an initial capital letter where not required by the rules of grammar are defined in Loan Agreement or the Pledge Agreement. II. Amendment to Pledge Agreement. A. Effective as of the date of this First Amendment, the fourth paragraph of the Pledge Agreement which is titled “Required Pledge Amount” is hereby amended by deleting such paragraph in its entirety and substituting therefor the following: “Required Pledge Amount. The term “Required Pledge Amount” in this

 
-2- Agreement means an amount equal to $6,300,000.00. Pledgor covenants and agrees to deposit or otherwise maintain in the Account at all times the Required Pledge Amount.” III. Conditions Precedent. Lender’s obligation to provide the Additional Financial Accommodations to Pledgor is subject to the full and timely performance and satisfaction of the following covenants and conditions: A. Pledgor executing and delivering, or causing to be executed and delivered to Lender, the following documents, each of which shall be in form and substance acceptable to Lender: (i) this First Amendment; and (ii) such other agreements, documents and instruments as the Lender may reasonably request. B. No Event of Default or Unmatured Event of Default exists under the Loan Agreement or the Pledge Agreement, as amended by this First Amendment. IV. Conflict. If, and to the extent, the terms and provisions of this First Amendment contradict or conflict with the terms and provisions of the Pledge Agreement, the terms and provisions of this First Amendment shall govern and control; provided, however, to the extent the terms and provisions of this First Amendment do not contradict or conflict with the terms and provisions of the Pledge Agreement, the Pledge Agreement, as amended by this First Amendment, shall remain in and have its intended full force and effect, and Lender and Pledgor each hereby affirms, confirms and ratifies the same. V. Severability. Wherever possible, each provision of this First Amendment shall be interpreted in such manner as to be valid and enforceable under applicable law, but if any provision of this First Amendment is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be severed herefrom and such invalidity or unenforceability shall not affect any other provision of this First Amendment, the balance of which shall remain in and have its intended full force and effect. Provided, however, if such provision may be modified so as to be valid and enforceable as a matter of law, such provision shall be deemed to be modified so as to be valid and enforceable to the maximum extent permitted by law. VI. Reaffirmation. Pledgor hereby reaffirms and remakes all of the representations, warranties, covenants, duties, obligations and liabilities contained in the Pledge Agreement, as amended hereby.

 
-3- VII. Fees, Costs and Expenses. Pledgor agrees to pay, upon demand, all fees, costs and expenses of Lender, including, but not limited to, a loan fee and reasonable attorneys’ fees, in connection with the Additional Financial Accommodations provided hereunder and the preparation, execution, delivery and administration of this First Amendment and the other agreements, documents and instruments executed and delivered in connection herewith or pursuant hereto. VIII. Choice of Law. This First Amendment has been delivered and accepted in Chicago, Illinois, and shall be governed by and construed in accordance with the laws of the State of Illinois, regardless of the laws that might otherwise govern under applicable principles of conflicts of law as to all matters, including matters of validity, construction, effect, performance and remedies. IX. Counterparts. This First Amendment may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. A facsimile or email transmitted executed counterpart to this First Amendment and the other agreements, documents and instruments executed in connection herewith will be deemed an acceptable original for purposes of consummating this First Amendment and such other agreements, documents and instruments; provided, however, Pledgor shall be required to deliver to Lender original executed signature pages in substitution for said facsimile or email transmitted signature pages upon Lender’s request therefor. X. Waiver of Jury Trial. PLEDGOR AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL BY JURY. XI. Waiver of Claims. IN CONSIDERATION OF THE LENDER’S EXECUTION AND DELIVERY OF THIS FIRST AMENDMENT, AND EXCEPTING CAUSES OF ACTION OR CLAIMS FOR LENDER’S WILLFUL MISCONDUCT, PLEDGOR HEREBY WAIVES, RELEASES AND FOREVER DISCHARGES THE LENDER, ITS PREDECESSORS, PARENTS, SUBSIDIARIES, AFFILIATES, AGENTS, EMPLOYEES, OFFICERS, DIRECTORS, SHAREHOLDERS, ATTORNEYS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS, AND EACH OF THEM, OF AND FROM ANY AND ALL CLAIMS, DEMANDS, COUNTERCLAIMS, SET-OFFS, DEFENSES, DEBTS, OBLIGATIONS, COSTS, EXPENSES, ACTIONS, CAUSES OF ACTION AND DAMAGES OF EVERY KIND, NATURE AND DESCRIPTION WHATSOEVER, KNOWN OR UNKNOWN, FORESEEABLE OR UNFORESEEABLE, LIQUIDATED OR UNLIQUIDATED, AND INSURED OR UNINSURED, WHICH PLEDGOR HERETOFORE, NOW OR FROM TIME TO TIME HEREAFTER OWNS, HOLDS OR HAS BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER, ARISING ON OR BEFORE THE DATE OF THIS FIRST AMENDMENT FROM, RELATING TO OR IN CONNECTION WITH THE PLEDGE AGREEMENT AS AMENDED HEREBY, THE LOANS, ANY OF THE OTHER LOAN DOCUMENTS, THE LIABILITIES, ANY COLLATERAL FOR THE LIABILITIES AND ANY AGREEMENT, DOCUMENT OR INSTRUMENT EVIDENCING ANY OF THE FOREGOING. [signature page follows]

 

 

 

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Better Choice Announces Extension and Upsize of Current Revolving Credit Facility to $13.5M,
Eliminating All Quarterly Amortization Payments and Extending Maturity to October 2024
NEW YORK, NY, October 25, 2022 -- Better Choice Company Inc. (NYSE American: BTTR) (the “Company” or “Better Choice”), a pet health and wellness company, today announced that it has successfully extended and upsized the Company’s existing credit facility to $13.5M with Wintrust Financial Corporation (“Wintrust”), a leading commercial bank headquartered in Chicago, Illinois.
Under the terms of the amended and restated credit agreement, Better Choice will simultaneously refinance its existing Term Loan A, which currently totals $4.7M, using proceeds from its increased revolving credit facility. In addition, this amendment materially reduces cash covenants and eliminates all existing quarterly amortization payments, resulting in a significant increase in liquidity. The interest rate under the Revolving Credit Facility is US Fed Funds Rate plus 3.75%.
The amendment provides for the following:
•Increases total borrowing capacity from $12.2M to $13.5M
•Extends the maturity date of the revolving credit facility from January 2024 to October 2024
•Refinances the Term Loan A, eliminating $4.7M of quarterly amortization and principal repayments through January 2024
•Reduces required liquidity covenant from $13.0M to $8.5M at close
•Reduces restricted cash from $6.9M to $6.3M at close
•Interest rate of US Fed Funds Rate plus 3.75%
Lionel Conacher, Interim Chief Executive Officer, commented, “This amendment significantly increases our total liquidity through a combination of increased borrowing capacity and the elimination of scheduled repayments. We are excited to expand our partnership with Wintrust as we continue to execute on our transformation and growth strategy going forward.”

About Better Choice Company Inc.
Better Choice Company Inc. is a rapidly growing pet health and wellness company focused on providing pet products and services that help dogs and cats live healthier, happier and longer lives. We offer a broad portfolio of pet health and wellness products for dogs and cats sold under our Halo brand across multiple forms, including foods, treats, toppers, dental products, chews, and supplements. We have a demonstrated, multi-decade track record of success and are well positioned to benefit from the mainstream trends of growing pet humanization and consumer focus on health and wellness. Our products consist of kibble and canned dog and cat food, freeze-dried raw dog food and treats, vegan dog food and treats, oral care products and supplements. Halo’s core products are made with high-quality, thoughtfully sourced ingredients for natural, science-based nutrition. Each innovative recipe is formulated with leading veterinary and nutrition experts to deliver optimal health. For more information, please visit https://www.betterchoicecompany.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Some or all of the results anticipated by these forward-looking statements may not be achieved. Further information on the Company’s risk factors is contained in our filings with the SEC. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Investor Contact:
KCSA Strategic Communications
Valter Pinto, Managing Director
T: 212-896-1254
Valter@KCSA.com