FAT Brands Inc.

08/30/2021 | Press release | Distributed by Public on 08/30/2021 15:03

Material Event (Form 8-K)

Entry Into a Material Definitive Agreement.

On August 25, 2021, FAT Brands Inc. (the 'Company') entered into an agreement with Trojan Investments LLC ('Trojan') to exchange all of the Company's outstanding shares of Series A Fixed Rate Cumulative Preferred Stock ('Series A Shares'), all of which are held by Trojan, plus accrued dividends thereon for newly issued shares of Series B Cumulative Preferred Stock ('Series B Shares') pursuant to a Preferred Stock Exchange Agreement (the 'Exchange Agreement'). The liquidation preference of the Series A Preferred Shares is $100.00 per share or $8,000,000 in the aggregate, and the accrued dividends thereon amounted to $1,563,978. Under the Exchange Agreement, the Company exchanged all 80,000 Series A Shares plus accrued dividends thereon for 478,199 Series B Shares at an exchange rate of $20.00 per share, effective August 25, 2021.

Concurrently with the Exchange Agreement, Trojan entered into a Put Option Agreement (the 'Put Option Agreement') with the Company's principal stockholder, Fog Cutter Holdings, LLC ('Fog Cutter'), pursuant to which Trojan was granted the right, for a period of one year after August 25, 2021, to sell to Fog Cutter all or any portion of the Series B Shares at $25.00 per share. The Company is not a party to the Put Option Agreement. If Trojan exercises such put option, Fog Cutter would have up to 180 days to consummate such sale. Fog Cutter did not receive any consideration for entering into the Put Option Agreement.

The above descriptions of the Exchange Agreement and Put Option Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements filed herewith as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.

Unregistered Sales of Equity Securities.

The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. The transaction described above was exempt from the registration requirements of the Securities Act of 1933, as amended (the 'Securities Act'), pursuant to the exemptions for transactions by an issuer not involving any public offering under Sections 3(a)(9) and 4(a)(2) of the Securities Act, Rule 506 thereunder, and in reliance on similar exemptions under applicable state laws.

Material Modification to Rights of Security Holders.

The disclosure set forth under Item 5.03 below is incorporated by reference into this Item 3.03.

Amendments to Articles of Incorporation or Bylaws; Change In Fiscal Year.

On August 24, 2021, the Company filed a Certificate of Amendment (the 'Amendment') to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware which increased the Company's authorized shares of preferred stock from 5,000,000 shares to 15,000,000 shares. The full text of the Amendment is filed herewith as Exhibit 3.1 and incorporated herein by reference.

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No. Description
3.1 Certificate of Amendment to Second Amended and Restated Certificate of Incorporation, filed August 24, 2021
10.1 Preferred Stock Exchange Agreement, dated August 25, 2021, by and between FAT Brands Inc. and Trojan Investments, LLC
10.2 Put Option Agreement, dated August 25, 2021, by and between Trojan Investments, LLC and Fog Cutter Holdings, LLC