Panache Beverage Inc. has missed an interest payment and defaulted on a loan.
New York-based Panache develops spirits brands, including Wodka Vodka, Alibi American Whiskey and Alchemia Infused Vodka. The company owns a distillery in Florida, where it is developing a high-proof vodka called Old South Shine. Panache says in filings with the U.S. Securities and Exchange Commission that it hopes to sell the brands as they mature.
Panache defaulted when it missed a quarterly interest payment of $62,533.33 to lender Consilium Corporate Recovery Master Fund Ltd., which it needed to pay by July 2, SEC filings show.
Consilium agreed that for now it will not charge Panache the default interest rate of 17 percent on the loan, a late fee, or exercise other rights. The $1.4 million loan is guaranteed by Panache's 65.5 percent stake in Wodka and deposit account.
The company has already waded through forbearance and restructuring agreements with Consilium.
In June, the parties entered into a restructuring agreement, in which $1.16 million of Panache's debt was canceled in exchange for giving Consilium 16.6 million shares of the company's common stock. At the time, Panache owed Consilium $6.9 million on various loans. As part of the deal, Consilium also agreed to waive Panache's existing defaults and lower the company's interest rate to 4 percent through December 2015. The restructuring agreement also includes an agreement under which Panache will give a Consilium affiliate three-year warrants to purchase up to 2.5 million shares of Panache.
The company and Consilium arrived at a restructuring agreement after coming to a forbearance agreement that ended on June 6. For more on that, see "Panache Beverage Reaches Forbearance until June 6."
In Panache's latest quarterly report, filed on June 10, the group said it has limited liquidity and capital resources, and that it will need more money to sustain product development efforts and other working capital needs. In the company's annual report, filed on April 10, accountant Silberstein Ungar PLLC raised substantial doubt about the company's ability to continue as a going concern, or without the threat of liquidation, because of limited working capital and losses from operations.
The company had a $1.4 million loss from operations in the first quarter of 2014, compared with an $894,262 loss from operations in the same quarter of 2013. Panache attributes the higher loss to a decrease in revenue from changing marketing and distribution strategies, which increased in cost.
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