Starco Brands, Inc. announced that it has entered into a financing transaction for the issuance of secured promissory note for gross proceeds of $800,000 on March 3, 2023. The transaction included participation from Ross Sklar, the Chief Executive Officer of the company. The promissory notes will bear a floating interest rate comprised of the Wall Street Journal Prime Rate plus 4%, for a current floating interest rate of 11.5%.

The promissory note matures on July 1, 2023 and has a default interest rate equal to the then current interest rate plus 5%. the company, at its option, may prepay the promissory note, in whole or in part, without prepayment penalty of any kind. The company issued warrants to purchase 114,286 shares of Class A Common Stock at an exercise price of $0.01 per share.

The number of shares of Class A Common Stock for which the Warrants are exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations and like transactions. Pursuant to the Warrant, the Warrant and the right to purchase securities upon the exercise of the Warrant will terminate on March 2, 2028