Tilt Holdings Inc. (NEO: TILT) (OTCQX: TLLTF) closed an offering of up to $4.5 million in senior secured promissory notes, referred to as a bridge loan, on Monday. The company says the move allows it to access up to $4 million in funding from its existing note holders.
The company is making use of this financial instrument to address short-term challenges associated with a payment due to a large supplier.
“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,” Interim CEO Tim Conder said. Conder assumed the role last month after Gary Santo resigned as CEO and board member of the company.
Despite the “unforeseen” need for this funding, which arose following the company’s debt refinancing in February, Conder committed to working towards clearing the new debt as soon as possible and constructing a capital structure that would lower the company’s leverage and set a “foundation for growth.”
The bridge notes have a floating interest rate at the higher of 16% or prime + 8.5% and mature in December 2023.
At the same time, TILT entered into a waiver agreement with the note holders of the February 2023 debt refinancing. The agreement allows the company to suspend interest payments on about $38 million in principal from amended and restated secured notes and nearly $8.2 million in principal from secured notes issued in February 2023.
The suspended interest payments, penalties, and principal will accrue at the default interest rate – the higher of 24% or prime + 16.5% – until the February notes are paid current.
TILT said on Monday that it undertook measures in the first quarter to manage its debt, including securing approvals to bolster its credit line with improved terms and a longer maturity period. Such actions “alleviated its near-term debt maturity,” the company said after releasing its first earnings report of the year.
May 22, 2023 at 5:48 am
So they are broke basically and aren’t paying bills.
Why dress it up? Are they paying you?
May 22, 2023 at 7:56 am
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