8-K: Safety Shot Amends Settlement Agreement with Bigger Capital, Modifying Payment Terms and Extending Registration Statement Deadline

Sentiment:

Form 8-K 4 April 2025 4:01 PM

Safety Shot, Inc. amended its settlement agreement with Bigger Capital LLC, adjusting payment terms related to future capital raises and extending the deadline for a registration statement.

Capital raiseThe agreement outlines that Safety Shot will pay Bigger Capital 10% of the gross proceeds from any capital raise (including an at-the market offering and an equity line of credit) consummated or occurring prior to the maturity date of the Convertible Bigger Note to pay down the Company's obligations owed under the secured convertible note issued by the Company to Bigger Capital.The agreement also outlines that Safety Shot will pay Bigger Capital 10% of the gross proceeds from any capital raise (including an at-the market offering and an equity line of credit) consummated or occurring after the maturity date of the Convertible Bigger Note, with the proceeds of any such post-maturity Financing being applied to pay down the Company's obligations owing under the $2 million SAFE or the $4.5 million convertible note bearing a 9% interest rate, maturing on December 31, 2027, to be issued to Bigger Capital from the Company in connection with such Alternative Payment Method, as applicable, until the Company's obligations under such SAFE or Convertible Note are paid in full, and then to the Company's obligations owing under the Secured Convertible Bigger Note, until the Company's obligations under the Secured Convertible Bigger Note are paid in full.

Summary

Safety Shot, Inc. amended its settlement agreement with Bigger Capital LLC on April 1, 2025, effective as of January 20, 2025.
Bigger Capital agreed not to convert a $3.5 million convertible note before July 21, 2025.
In return, Safety Shot will pay Bigger Capital 10% of gross proceeds from any capital raise before the note's maturity date to pay down obligations under a $1.75 million secured convertible note.
The 10% payment also applies to capital raises after the note's maturity, with proceeds first used to pay down obligations under a $2 million SAFE or a $4.5 million convertible note (if an Alternative Payment Method is used), and then to the $1.75 million secured convertible note.
Bigger Capital agreed to extend the Registration Statement Effectiveness Deadline from April 5, 2025, to May 2, 2025, contingent on Safety Shot completing a pre-maturity financing by April 18, 2025.
If the price per share of common stock or equivalents in any financing is less than the Exchange Warrant's current exercise price ($0.4348), the exercise price will be reduced to the Base Share Price.

Sentiment

Score: 4

Explanation: The sentiment is neutral to slightly negative. While the agreement provides some short-term financial flexibility, the long-term obligations and potential dilution raise concerns.

Positives

The extension of the Registration Statement Effectiveness Deadline to May 2, 2025, provides Safety Shot with more time to meet its obligations.
Bigger Capital's agreement not to convert the $3.5 million note before July 21, 2025, offers Safety Shot some financial flexibility in the short term.

Negatives

Safety Shot is obligated to pay Bigger Capital 10% of gross proceeds from future capital raises, which could dilute shareholder value.
The potential reduction of the Exchange Warrant's exercise price if share prices fall below $0.4348 could further dilute shareholder value.

Risks

Failure to complete a pre-maturity financing by April 18, 2025, could jeopardize the extension of the Registration Statement Effectiveness Deadline.
The need to allocate 10% of capital raise proceeds to Bigger Capital could limit Safety Shot's ability to invest in growth initiatives.
The potential for further dilution due to the Exchange Warrant exercise price adjustment.

Future Outlook

The company's future financial obligations are tied to its ability to raise capital and manage its debt with Bigger Capital.

Management Comments

Jarrett Boon, Chief Executive Officer, signed the report on behalf of Safety Shot, Inc.

Industry Context

This agreement is typical of companies that are in need of capital and are negotiating with lenders to restructure debt and extend payment terms. The terms are specific to the company's financial situation and may not be directly comparable to other companies in the industry.

Comparison to Industry Standards

It's difficult to compare this specific agreement to industry standards without knowing the specifics of Safety Shot's financial situation and the terms of their previous agreements with Bigger Capital.
Similar agreements are often seen with small-cap companies that are seeking to restructure their debt or raise capital.
The 10% of gross proceeds payment to Bigger Capital is a significant amount and suggests that Safety Shot was in a weak negotiating position.

Stakeholder Impact

Shareholders may experience dilution due to future capital raises and potential warrant exercise price adjustments.
The agreement impacts the financial relationship between Safety Shot and Bigger Capital.

Next Steps

Safety Shot needs to consummate a pre-maturity Financing by April 18, 2025.
Safety Shot needs to monitor its share price to avoid triggering a reduction in the Exchange Warrant's exercise price.
Safety Shot needs to manage its debt obligations to Bigger Capital.

Key Dates

Date	Description
2025-01-20	Original Settlement Agreement and Mutual Release between Safety Shot and Bigger Capital LLC.
2025-04-01	Effective date of the Amendment to Settlement Agreement and Mutual Release.
2025-04-05	Original Effectiveness Deadline of the Registration Statement.
2025-04-18	Deadline for Safety Shot to consummate a pre-maturity Financing.
2025-05-02	Extended Effectiveness Deadline of the Registration Statement.
2025-06-30	Maturity date of the $3.5 million Convertible Bigger Note.
2025-07-21	Date before which Bigger Capital agreed not to convert the $3.5 million note.
2026-12-31	Maturity date of the $1.75 million Secured Convertible Bigger Note.
2027-12-31	Maturity date of the $4.5 million convertible note bearing a 9% interest rate.

Keywords

Settlement Agreement, Bigger Capital, Capital Raise, Convertible Note, Registration Statement, Financing, Warrant, Safety Shot

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