Tilt Holdings shores up vape supply chain with debt restructure

The deal essentially allows Tilt to buy more vape products on credit.

Tilt Holdings Inc. (Cboe: TILT) (OTCQX: TLLTF) said that it has entered into an agreement with Smoore Technology Limited to extend its existing credit facilities.

The agreement, effective Jan. 28, involves Phoenix-based Tilt and its subsidiary, Jupiter Research, collectively agreeing to guarantee repayment of debts to Smoore, particularly for invoices unpaid for over 120 days.

The company said that the deal with the CCELL products provider is expected to fortify Tilt’s vape supply chain as business demand grows.

“We believe coming to an agreement with Smoore was an important and necessary step to expand our business and meet our customer needs as they continue to grow,” Tilt’s CEO, Tim Conder, said in a statement.

“We recently shipped one of the largest orders of CCELL products in Jupiter’s history ahead of the upcoming Chinese New Year holiday. Further, given Smoore’s new first lien status, we have engaged in discussions for a forbearance agreement with our noteholders, who have been very supportive throughout this process as we work together to maximize stakeholder value.”

Under the terms of the deal, Smoore will continue to supply Jupiter with CCELL products on credit, while TILT and its subsidiaries guarantee repayment of any debts to Smoore. The guarantee extends to amounts not covered by insurance from Sinosure, a Chinese export and credit insurance corporation, for invoices that remain unpaid for over 120 days.

The agreement includes a letter of intent stipulating that Tilt will work to trim its outstanding balance with Smoore to $25 million by the end of 2024. The repayment plan structure includes specific milestones to address invoices older than 150 days initially, with a gradual transition to invoices over 120 days.

The arrangement also grants Smoore a first lien on all Tilt assets, as a security interest.

Tilt_Holdings_Inc_20240131_Form_8-K

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.


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