TILT Holdings Inc. (“TILT” or the “Company”) (CSE: TILT) (OTCQX: TLLTF), a global provider of cannabis business solutions that include inhalation technologies, cultivation, manufacturing, processing, brand development and retail, announced today that Baker Technologies, Inc. (“Baker”), an indirect wholly owned subsidiary of TILT, has agreed to amend and receive payment for its secured convertible promissory note (the “Blackbird Note”) that was previously issued in connection with the sale by Baker of all of the membership interests of Yaris Acquisition, LLC (dba Blackbird) to Slam Dunk, LLC (“Slam Dunk”) on December 1, 2020 (the “Blackbird Sale“).
The Blackbird Note receivable is expected to be paid at its $7.9 million fair value calculated as of March 31, 2021, as disclosed in the Company’s interim financial statements filed on SEDAR on May 25, 2021. Baker has agreed to receive payment through a series of transactions (collectively, the “Transactions”) with Slam Dunk and HERBL, Inc. (“HERBL”), a California corporation and arm’s length third party to both TILT and Slam Dunk, pursuant to which:
- Blackbird Logistics Corporation, a Nevada corporation and wholly owned subsidiary of HERBL, assumed from Slam Dunk the obligation to repay the Blackbird Note to Baker;
- the Blackbird Note will be fully repaid through the payment to Baker of US $1,500,000 in cash and the issuance to Baker of a certain number of shares of common stock of HERBL (such number of shares subject to adjustment in certain circumstances) (the “HERBL Shares”) based on HERBL’s enterprise value. Baker will enter into customary investor and stockholder agreements related to its ownership of the HERBL Shares. If the cash payment is not made to Baker, or the HERBL Shares are not issued to Baker, such that the debt obligations under the Blackbird Note are not fully repaid on or before June 11, 2021, Slam Dunk will remain liable for all of its original debt obligations to Baker under the Blackbird Note; and
- HERBL has agreed to give a guarantee to Baker of Slam Dunk’s obligations to Baker under the securities purchase agreement, dated November 18, 2020, entered into by Baker and Slam Dunk in connection with the Blackbird Sale.
All of the Transactions are expected to be completed on or before June 11, 2021.
