TILT Holdings Inc. (“TILT” or the “Company”) (NEO: TILT) (OTCQX: TLLTF), a global provider of cannabis business solutions that include inhalation technologies, cultivation, manufacturing, processing, brand development and retail, today announced the closing of an offering of up to US$4.5 million in aggregate principal amount of senior secured promissory notes (the “Bridge Notes”), with an original issue discount of approximately US$0.5 million, allowing access to funding of up to US$4.0 million from its existing secured note holders to assist with a transition in payment terms of a trade payable with a primary supplier.
“In order to meet short-term obligations associated with a trade payable from a large supplier, we were fortunate to secure an instrument providing the Company with immediate access to US$4.0 million. While these circumstances created a near-term challenge, it reaffirmed our alignment with our debt holders and their faith in TILT and its current management team. We are grateful for their continued support,” stated Interim Chief Executive Officer, Tim Conder.
Conder continued, “While the need for this funding was unforeseen when we closed our recent debt refinancing in February, it is a testament to our ability to navigate challenges adeptly and without hesitation. We will work to extinguish this new debt as quickly as possible and to create a capital structure that reduces the leverage on our company and creates a foundation for growth.”
The Bridge Notes bear a floating interest rate at the higher of 16% or Prime +8.5% and mature in December 2023. Simultaneous with the issuance of the Bridge Notes, the Company entered into a Consent, Confirmation, Limited Waiver And Forbearance Agreement (the “Waiver Agreement”) with the noteholders of the February 2023 debt refinancing that allows TILT to suspend interest payments on the approximately US$38 million in aggregate principal amount of amended and restated secured notes and approximately US$8.2 million in aggregate principal amount of secured notes issued in February 2023 (together, the “February Notes”) for the shorter of the term of the Bridge Notes or through December 2023. The missed interest payments, penalties and principal of the February Notes will accrue at the default interest rate as set in the February Notes of the higher of 24% or Prime + 16.5% until the February Notes are paid current.
