Emanay Advisors · Confidential · Prepared for Lender / Diligence Review
Project Buttercup
Debt Schedule &
Intercompany Risk
Memorandum
MCA Debt Reconciliation, Cash Flow Coverage & Intercompany Transfer Analysis
Prepared by Emanay Advisors · July 27, 2026 · BUTTERCUP-DEBT-2026-07-27-v1 · Strictly Confidential
Section 01
Executive Summary
This memorandum consolidates three related work streams on Buttercup Brands' existing base of eight Drybar locations: (1) a corrected MCA/debt schedule reconciling recent lender payoff letters and correspondence, (2) a cash-flow-to-debt-service coverage analysis, and (3) an intercompany transfer analysis across the five affiliate entities that hold these locations.
Two MCA obligations have been confirmed paid off since the prior debt schedule version; one legacy item still carries an unreleased UCC filing pending confirmation, and one MCA remains entirely undocumented. Cash flow coverage of debt service has improved sharply quarter-over-quarter and is expected to improve further once the largest active MCA (Aspire) is retired in approximately six weeks. Separately, the intercompany transfer analysis surfaces a structural finding relevant to any lender: River North has become the platform's de facto internal bank, and the books of one entity (Joy DB LLC) do not reconcile cleanly against any of its counterparties.
Emanay Assessment: None of the findings below are individually disqualifying, but taken together they describe a platform that has been informally self-funding through internal cash sweeps and short-term MCA debt while absorbing real operating shocks (a flood/HVAC replacement and new-location buildout costs). A lender evaluating any single entity in isolation — particularly River North — should look at the consolidated and intercompany picture, not the entity's standalone balance sheet.
Section 02
MCA Debt Schedule — Corrected & Resolved Items
Active Debt Remaining
$643,350
7 active contracts, unchanged by these corrections
Current Monthly Debt Service
$72,301
Drops to ~$45,059 once Aspire is retired
Aspire Payoff (Largest Contract)
~6 Weeks Out
Per Joy, est. mid-September 2026
02.1 — Resolved Since Prior Schedule
Confirmed Payoffs
01
Parkside Funding — JOY DB-RN LLC (River North) Paid Off
$90,000 advance, funded 12/02/2025 (ID#15696). Confirmed $0.00 balance per Parkside payoff letter dated 03/17/2026. Excluded from active totals.
02
Parkside Funding — JOY DB-W LLC (W Hotel / Milwaukee) Paid Off
$70,000 advance, funded 02/24/2026 (ID#16274). Confirmed $0.00 balance per Parkside payoff letter dated 07/13/2026. Not previously reflected as its own line on the prior debt schedule version.
03
Kapitus Servicing 22364741 — JOY DB-RN LLC (River North) Paid, UCC Pending
Legacy contract, distinct from the separately-tracked Kapitus LLC contract 23909771 (Milwaukee Third Ward). Per payoff letter dated 03/16/2026, a discounted payoff of $51,815.03 was available against a full balance of $62,416.00 if paid by 03/23/2026. Confirmed paid per a 07/15/2026 email from Kapitus rep Ernest Jacob Corpin congratulating Joy on the payoff and soliciting new funding. However, Joy's reply that day states her UCC filing on this contract had not yet been released, and she was unsure which exact contract the payoff referred to. Action item: confirm UCC release directly with Kapitus (469-757-8900 / CustomerSupport@Kapitus.com) before treating as fully closed for lender purposes — an unreleased UCC filing reads as an active lien regardless of the underlying debt status.
02.2 — Still Open
Unresolved Item
04
Specialty Capital 770825 — JOY DB-W LLC (W Hotel / Milwaukee) Unverified
No lender statement or payoff letter has been received for this contract. A search of Gmail, Google Drive, and the full consolidated QuickBooks export found no trace of this obligation anywhere — it does not appear to be booked as a liability under any entity's balance sheet in the current financials. This is not simply a documentation gap; its status needs to be confirmed directly with Joy or the lender.
Section 03
Cash Flow to Debt Service Coverage
Net operating income was compared against monthly MCA debt service across the first half of 2026, using the consolidated income statement and the corrected debt schedule above.
DSCR — Trailing 3 Months (Apr–Jun)
1.15x
$82,902 avg. monthly NOI vs. $72,301 debt service
DSCR — Trailing 6 Months
0.51x
Dragged down by a weak January and February
Post-Aspire Projected DSCR
~1.5x+
Against recent $80K+ monthly NOI
January 2026 NOI was -$68,000, coinciding with a flood and HVAC replacement at one location (~$380,000 out of pocket, per Joy) and the buildout costs of three newly opened locations. The business recovered steadily from February onward: May alone generated $124,389 in NOI, more than 1.7x the current monthly debt service on its own. The trailing-6-month DSCR understates the current run rate; the trailing-3-month figure (1.15x) is the more representative "current" coverage picture, and coverage is expected to strengthen further once the Aspire Funding Platform contract — the single largest MCA, at $27,242/month — is retired in roughly six weeks.
Caveat: This is P&L coverage, not a cash-availability view. River North alone shows $330K–$1.03M in intercompany "due from" balances across the period analyzed (Section 04) — meaning coverage at the NOI level does not guarantee that cash is sitting in the operating account of the entity carrying the debt when payments come due.
Section 04
Intercompany Transfer Analysis
04.1 — Net Position by Entity
June 2026
| Entity | Location | Net Position | Role |
|---|
| Joy DB-RN LLC | River North | +$1,027,560 | Net creditor — funds others |
| Joy DB-W LLC | W Hotel / Milwaukee | +$299,971 | Net creditor — funds others |
| Joy DB LLC | Milwaukee Third Ward | +$162,091 | Net creditor — funds others |
| Joy DB-WFB LLC | Whitefish Bay | -$311,391 | Net debtor — relies on funding |
| Joy DB-LP LLC | Lincoln Park | -$315,184 | Net debtor — relies on funding |
04.2 — Pairwise Reconciliation
Do the Two Sides of Each Balance Agree?
| Entity A | Entity B | A Reports | B Reports | Status |
|---|
| Joy DB LLC | Lincoln Park | $378,931 | $372,384 | Minor variance |
| Joy DB LLC | River North | -$332,872 | -$440,394 | Material variance |
| Joy DB LLC | W Hotel | -$23,313 | -$73,795 | Material variance |
| Joy DB LLC | Whitefish Bay | $31,311 | -$1,286 | Direction conflict |
| Lincoln Park | River North | $18,500 | $18,500 | Match |
| Lincoln Park | W Hotel | -$4,100 | -$4,100 | Match |
| Lincoln Park | Whitefish Bay | $8,000 | $8,000 | Match |
| River North | W Hotel | $17,600 | $17,600 | Match |
| River North | Whitefish Bay | $133,600 | $131,100 | Minor variance |
| W Hotel | Whitefish Bay | $57,976 | $57,976 | Match |
04.3 — Key Risk Flags
For Lender Consideration
R1
River North Is the Platform's De Facto Internal Bank High
Its net intercompany receivable has grown from ~$330K (Jan 2024) to ~$1.03M (Jun 2026) — more than tripling in 2.5 years — while River North simultaneously carries the Aspire and IOU Financial MCA obligations. Lender collateral tied to River North's cash flow should be evaluated net of this exposure, not gross.
R2
No Documented Intercompany Agreements Medium
No loan agreements, interest terms, or repayment schedules were identified for any of these balances — they appear to be informal cash sweeps between commonly-owned LLCs rather than structured related-party debt.
R3
Whitefish Bay & Lincoln Park Are Structurally Dependent Medium
Both locations rely on ongoing funding from the other entities. A downturn at either creates collection risk for River North, W Hotel, and Joy DB LLC, with no formal guarantee to point to.
R4
Joy DB LLC's Books Do Not Reconcile With Any Counterparty High
Every pairwise balance involving Joy DB LLC shows a variance — including a direction conflict with Whitefish Bay (Joy DB LLC's books say Whitefish Bay owes it ~$31.3K; Whitefish Bay's books say Joy DB LLC owes it ~$1.3K). All other entity pairs reconcile exactly or near-exactly. This points to unreconciled bookkeeping at Joy DB LLC specifically, not a documentation gap across the platform.
R5
Directly Relevant to the Regent Stock-Purchase Structure Medium
The Regent deal has already shifted from an asset purchase to a stock purchase, requiring full entity-level liability diligence. A stock acquisition would inherit these intercompany balances and their collectability risk as-is.
Section 05
Outstanding Action Items
Open
Confirm Specialty Capital 770825 Status
Obtain a current statement or payoff confirmation from Joy or the lender directly — not booked anywhere in the consolidated financials.
Open
Confirm Kapitus UCC Release on Contract 22364741
Debt is paid per Kapitus correspondence; UCC filing release is not yet confirmed. Call 469-757-8900 or email CustomerSupport@Kapitus.com.
Open
Reconcile Joy DB LLC's Intercompany Ledger
Determine why Joy DB LLC's books disagree with all four counterparties while the other four entities reconcile cleanly with each other.
This memorandum has been prepared by Emanay Advisors, compiled from lender payoff letters and correspondence (Parkside Funding Group, Kapitus Servicing Inc.), Joy Vertz's consolidated QuickBooks export (DryBar_Consolidated_Financial_2026_07_15.xlsx), Gmail correspondence, and Google Drive data room contents through July 27, 2026. All figures are as reported in source documents and are subject to further verification; several items remain open as noted in Section 05. Doc Ref: BUTTERCUP-DEBT-2026-07-27-v1 · Emanay Inc. · 1221 Brickell Ave Suite 900 · Miami FL 33131 · advisors@emanay.io · Strictly Confidential — Not for Distribution