Soupman, Inc. (OTC Pink: SOUPQ) is engaged as a premium soup maker and distributor, which rose to fame after being featured on Seinfeld. Shares of the soup company collapsed 50.48%, during trading on Tuesday, September 12, 2017. Over the past month, Soupman, Inc. has seen average daily volume of 10.13 million shares. However, volume of 26.3 million shares or dollar volume of $476,030, exchanged hands during today’s trading.
Shares of Soupman, Inc. dove today after the company filed an 8-K, detailing of entering into an asset purchase agreement with Gallant Brands, Inc. Under the terms of the deal, Gallant Brands, Inc. acquires substantially all of Soupman, Inc.’s assets for $6.7 million. Management says they are continuing to look for additional opportunities to sell off the “remaining immaterial assets and wind-down the company.” This news was an unexpected turn-of-events, as investors have speculated for weeks that the company would reorganize in bankruptcy court to emerge strong and capable of performing once again. However, it appears management has decided to sell off the company’s prized assets and wind down operations. Here is part of the 8-K filing detailing of the asset purchase agreement:
Item 1.01. Entry Into a Material Definitive Agreement.
The information set forth below in Items 1.03 and 2.01 of this Current Report on Form 8-K (this “ Form 8-K ”) regarding the Asset Purchase Agreement (as defined below) is incorporated herein by reference.
Item 1.03. Bankruptcy or Receivership.
As previously disclosed, on June 13, 2017, Soupman, Inc. (the “ Company ”) filed a voluntary petition (the “Chapter 11 Case ”) under Chapter 11 (“ Chapter 11 ”) of Title 11 of the United States Code (the “ Bankruptcy Code ”) in the United States Bankruptcy Court for the District of Delaware (the “ Court ”). The Chapter 11 Case is being administered under the caption In re The Original Soupman, Inc. (Case No. 1:17-bk-11313).
On September 6, 2017, the Company and certain of its wholly-owned direct and indirect subsidiaries (collectively with the Company, the “ Debtors ”) entered into an Asset Purchase Agreement (the “ Asset Purchase Agreement ”) with Gallant Brands, Inc. (the “ Purchaser ”) pursuant to which the Purchaser agreed to purchase substantially all of the assets of the Company (such assets, the “ Assets ,” and such transaction, the “Asset Sale ”) for a purchase price equal to approximately $6.7 million, which would be satisfied in cash and the assumption of certain specified liabilities.
A copy of the Asset Purchase Agreement is filed herewith as Exhibit 10.1 and is incorporated herein by reference. The description of the Asset Purchase Agreement is qualified in its entirety by reference to such exhibits.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The closing of the Asset Sale contemplated under the Asset Purchase Agreement occurred on September 8, 2017. An auction was conducted on August 28, 2017 pursuant to the bid procedures approved by the Court and the sale was approved by order of the Court entered September 7, 2017. The Debtors received total consideration of approximately $6.7 million.
The proceeds of the Asset Sale were used in part to pay in full the $1.7 million outstanding under the Company’s debtor-in-possession financing facility (the “ DIP Financing ”). As a result, the DIP Financing was terminated upon the closing of the Asset Sale and concurrently therewith the lenders thereunder released all liens and security interests against the Debtors that were granted in connection with the DIP Financing.
The Company is evaluating its options with respect to the sale of the remaining immaterial assets and wind-down of the Company.
Item 7.01. Regulation FD Disclosure.
Additional information on the Chapter 11 Case, including access to documents filed with the Court and other general information about the Chapter 11 Case, is available at a subscription based service known as PACER, at https://ecf.deb.uscourts.gov/cgi-bin/iquery.pl?949006151816262-L_1_0-1.
The information in Item 7.01 of this Form 8-K is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise subject to the liabilities of such section. The information in Item 7.01 of this Form 8-K shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing.
Here is the link to the full 8-K filing: https://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=12277158