FAT Brands Inc. announced its offering of up to $30,000,000 of non-convertible 8.25 percent Series B Cumulative Preferred Stock and common stock purchase warrants. The company’s Offering Statement filed with the Securities and Exchange Commission (SEC) has been qualified and investors may now invest at http://www.banq.co/fat. The offering is being conducted on a “best efforts” basis pursuant to Regulation A of Section 3(6) of the Securities Act of 1933, as amended for Tier 2 Offerings, and available to retail and institutional investors. The company intends to use the net proceeds of the Offering to refinance existing indebtedness, as well as for general working capital and future acquisitions.
“We are pleased that FAT Brands is one of the first companies to execute a follow-on offering using the Regulation A process,” says Andy Wiederhorn, CEO and founder of FAT Brands. “This preferred stock offering brings new, long-term, lower cost capital to the Company while providing an 8.25 percent dividend to investors. Eliminating existing debt and using additional proceeds for our next acquisition will further the execution of our business plan and growth strategy.”
The company will offer up to 1,200,000 shares of 8.25 percent Series B Cumulative Preferred Stock and warrants initially exercisable to purchase an aggregate of up to 720,000 shares of Common Stock. Each share of Series B Preferred Stock will be accompanied by a Warrant to purchase 0.60 shares of Common Stock at an exercise price of $8.50 per share. The shares of Series B Preferred Stock and accompanying Warrants are being offered at $25, for an aggregate offering amount of up to $30,000,000. Each Warrant will be immediately exercisable, and will expire on the five-year anniversary of the date of issuance. The offering will close on a rolling basis, subject to customary closing conditions.
Investors in the Series B Preferred Stock will be entitled to receive cash dividends of $2.0625 per share each year, which is equivalent to 8.25% of the $25.00 purchase price per share. Dividends on the Series B Preferred Stock will be payable quarterly in arrears based on the company’s fiscal quarters.
The Series B Preferred Stock may not be redeemed by the company prior to the first anniversary of the initial issuance date. After the first anniversary of the initial issuance date, the Company may redeem the Series B Preferred Stock at 110 percrent of liquidation preference plus accrued dividends prior to the second anniversary, at 105 percrent prior to the third anniversary, and at 100 percrent thereafter. The Series B Preferred Stock will mature on the five-year anniversary of the initial issuance date.
TriPoint Global Equities, LLC (“TriPoint”), working with its online division BANQ and Digital Offering, LLC will act as the lead managing selling agents for the Offering. TriPoint will act as the book-running manager, and Digital Offering the co-manager.