CONSHOHOCKEN, PA. — Skinny Nutritional Corp., maker of Skinny Water and zero-calorie enhanced waters, has entered into a “standstill agreement” with Trim Capital L.L.C.
Skinny on June 28 reached agreement with Trim Capital involving the issuance of $9 million of preferred and common stock and a $6 million senior secured credit facility. At the initial closing, Skinny Nutritional sold a $1 million senior secured bridge note to Trim Capital, and on Aug. 14 Skinny Nutritional sold an additional initial senior secured note in the aggregate principal amount of $270,000. The purchase agreement for the second note was set for Aug. 28, but it has not occurred.
As part of the standstill agreement, the two companies will have a 60-day period to discuss a plan with respect to the obligations under the purchase agreement and the initial note. The agreement terminates the prohibition against the company soliciting alternative transactions and enables Skinny Nutritional to pursue various strategic and/or financing alternatives in order to address its obligations and to provide for additional working capital. In addition, the standstill agreement provides that the parties will refrain from commencing or prosecuting any claims against the other or their respective affiliates during the standstill period.
“While we are disappointed with the developments with Trim Capital, we are diligently working on alternative plans to address our company’s capital requirements,” said Michael Salaman, chief executive officer of Skinny Nutritional. “The standstill agreement provides additional time to develop a plan to finance the company and revitalize our marketing and distribution efforts.”