Tilt Holdings (NEO: TILT) (OTCQX: TLLTF) refinanced its legacy debt and paid off nearly half of its outstanding liabilities borrowed over the years.
With $46 million worth of nonrevolving debt left on the books, the company refinanced a $38 million loan carrying a floating interest rate “at the higher of 16% or prime plus 8.5%” and extended the maturity to February 2026.
Tilt also issued $8.2 million of payment-in-kind secured promissory notes maturing in February 2027, with same interest rate as the previously mentioned refinance.
The company said that it did not receive any new proceeds as a result of the amendments to the debt facility.
“Anytime a company can reduce its long-term debt by almost 50% over a 12-month period is remarkable,” CEO Gary Santo said in a statement. “Our ability to withstand unprecedented sector headwinds and overcome the lack of access to traditional banking products and inefficient capital markets is a true testament to the strength and perseverance of our team.”
“Resolving our near-term debt maturities puts (the company) on firm footing to be able to focus on revenue growth, improving margins, exploring M&A, and executing against our strategic plan.”
Despite the Tilt’s revenue drop and lowered guidance in November’s third quarter earnings, the stock saw an uptick as investors evaluated the company’s strong cash flow performance and became bullish on its ability to meet its debt maturities successfully.
The company’s stock rose at the beginning of 2023 on news that it had retired $33.7 million of its $35.8 million principal amount of senior secured notes and extended the maturities of the remaining $2.1 million to the end of February, which the company announced today has since been paid off.
Tilt also closed its previously announced $15 million sale-leaseback transaction with Innovative Industrial Properties (IIPR: NYSE) concerning its White Haven, Pennsylvania, facility, weeks after the company obtained a fifth amendment to its agreement with the REIT and extended the investigational period.
Tilt said that the net proceeds will be funneled towards repayment of debt and working capital.
“The reduction of (the company’s) long-term debt, together with the completion of the sale-leaseback of our Pennsylvania cultivation and manufacturing facility, aligns with our goal of remaining asset-light while maintaining a prudent capital structure,” CFO Dana Arvidson said.
TLLTF was up nearly 9% as of Thursday’s close.