Item 2.04 Trigger Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
On December 8, 2022, Altitude International Holdings, Inc. (the "Company")
received a "Notice of Events of Default; Reservation of Rights; and Notice of
Default Interest Accrual" letter (the "Notice") from FVP Servicing, LLC, ("FVP")
the administrative agent for certain lenders. The Notice relates to that certain
Amended and Restated Loan Agreement (the "Loan Agreement") executed on September
2, 2022, by and between the Company, Altitude Hospitality, LLC and Trident
Water, LLC (collectively, the "Borrowers"), the lenders party thereto and FVP
under which the Borrowers borrowed Eighteen Million Two Hundred Fifty Thousand
Dollars ($18,250,000) with an interest rate per annum of SOFR (with a 2% floor)
plus thirteen percent (13%) (with $15,000,000 due on September 2, 2025 and
$3,250,000 (from the previous "Original Loan" executed on April 29, 2022) due on
the earlier of (i) November 30, 2022 or (ii) the date of an uplist offering)
(the "Loan"). The Company and its wholly owned subsidiaries guaranteed the
Borrowers' obligations under the Loan and pledged their equity and granted a
security interest in all their assets.
The Notice designates two events of default under the Loan Agreement, including
the failure to obtain deposit account control agreements and failure to pay the
Original Loan amount of $3,250,000 by November 30, 2022. As of December 14,
2022, FVP has granted an extension of 90 days to obtain the deposit account
control agreements. The parties are working in good faith to address and resolve
the events of default.
The Notice declared that, effective as of November 30, 2022, the interest rate
under the Loan Agreement will be charged at a default interest rate of twenty
percent (20%) per year until all events of default are cured or waived in
writing by FVP.
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