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Share Name | Share Symbol | Market | Type |
---|---|---|---|
TILT Holdings Inc (QB) | USOTC:TLLTF | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0044 | -12.22% | 0.0316 | 0.032 | 0.0331 | 0.0385 | 0.03 | 0.036 | 302,152 | 18:00:19 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
(Address of principal executive offices) | (Zip Code) |
( |
(Registrant’s telephone number, including area code) |
Not applicable |
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.424) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
On October 2, 2023, TILT Holdings Inc. (the “Company”) and its subsidiaries Jimmy Jang, L.P., Baker Technologies Inc., Commonwealth Alternative Care, Inc. and Jupiter Research, LLC, (collectively the “Borrowers”, each a “Borrower”) entered into a Limited Waiver and Continued Forbearance Agreement (the “October Forbearance Agreement”) with Jordan Geotas, as noteholder representative (the “Noteholder Representative”) on behalf of the noteholders (the “Noteholders”) under the Secured Note Purchase Agreement dated as of November 1, 2019, as amended by the First Amendment to Secured Note Purchase Agreement dated as of February 15, 2023 (as amended, the “2019 NPA”).
As previously reported, pursuant to the 2019 NPA, on February 15, 2023, the Company and Borrowers refinanced US$38,000,000 in aggregate principal amount of secured promissory notes (the “2023 Refinanced Notes”) and issued by way of private placement secured promissory notes (the “2023 New Notes”) in the aggregate principal amount of US$8,260,185 to the Noteholders.
Pursuant to the October Forbearance Agreement, the Company, Borrowers and Noteholder Representative (together, the “Loan Parties”) agreed to modify certain terms and conditions of the Consent, Confirmation, Limited Waiver and Forbearance Agreement dated May 15, 2023 (the “May Forbearance Agreement”), pursuant to which the Noteholder Representative, at the direction of the Noteholders, provided a limited waiver of certain events of default under the 2023 Refinanced Notes and the 2023 New Notes and agreed to forbear from exercising certain rights of the Noteholder Representative and Noteholders. The Loan Parties confirmed that the May Forbearance Agreement is still in full force and effect, including without limitation, the Noteholder Representative’s limited waiver of any events of default that has or will occur as a result of the Borrower’s failure to make certain payments or meet certain financial covenants required under the 2019 NPA, the 2023 Refinanced Notes and the 2023 New Notes.
On or before September 5, 2023, the Borrowers paid Noteholders an amount equal to US$2,785,953.26, which represents the interest payable on the 2023 Refinanced Notes without the application of the additional 8% required in the event of a default (the “Default Rate”). The October Forbearance Agreement provides that Borrowers continue to owe to the Noteholders under the 2023 Refinanced Notes additional interest at the Default Rate in the amount of $1,387,952.80 (the “Outstanding Default Interest Amount”). The October Forbearance Agreement also provides that, on or before December 29, 2023 (the “Accrued Default Interest Due Date”), Borrowers will pay to the Noteholders the Outstanding Default Interest Amount. The failure to pay the Outstanding Default Interest Amount not later than the Accrued Default Interest Due Date will constitute an event of default and result in termination of the forbearance period under the May Forbearance Agreement.
As provided in the October Forbearance Agreement, due to continuing events of default under the 2023 Refinanced Notes, interest at the Default Rate continues to accrue on the outstanding balance due under the 2023 Refinanced Notes from and after September 1, 2023 until the date the events of default are cured or waived (the “Provisionally Waived Default Interest Amount”). However, if the Borrowers make all scheduled interest payments due to the Noteholders under the 2023 Refinanced Notes through December 31, 2024, including the Outstanding Default Interest Amount on or before the Accrued Default Interest Due Date, but excluding the Provisionally Waived Default Interest Amount, then the required noteholders, through the Noteholder Representative, will waive the Borrowers’ obligation to pay the Provisionally Waived Default Interest Amount and any failure to pay such amount will not constitute an event of default under the 2023 Refinanced Notes.
The October Forbearance Agreement does not modify the terms of the May Forbearance Agreement with respect to the 2023 New Notes and consistent with the terms of the 2023 New Notes, any such interest payments will be treated as provided in such 2023 New Notes and interest will accrue on the outstanding balance of the 2023 New Notes at the Default Rate. Upon payment in full by the Borrowers of the Outstanding Default Interest Amount, unless there are continuing events of defaults under the 2023 New Notes, interest on the 2023 New Notes will no longer accrue interest at the Default Rate but rather will accrue interest as otherwise provided under the 2023 New Notes.
Adam Draizin, a current member of the Company’s Board of Directors, through an affiliated entity, Callisto Collaborations LLC, holds US$1,520,000 in principal amount of the 2023 Refinanced Notes, and US$330,407 in principal amount of the 2023 New Notes. Mark Scatterday, a former director of the Company and large shareholder of the Company, through an affiliated entity, Mak One LLLP, holds US$18,810,000 in principal amount of the 2023 Refinanced Notes, and US$4,088,792 in principal amount of the 2023 New Notes.
2
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the October Forbearance Agreement which is filed herewith as Exhibit 10.1 and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits |
Exhibit No. |
| Description |
10.1 | ||
104 |
| Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document. |
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| TILT Holdings Inc. | |
|
| |
Date: October 6, 2023 | By: | /s/ Tim Conder |
| Name: | Tim Conder |
| Its: | Chief Executive Officer |
4
Exhibit 10.1
LIMITED WAIVER AND CONTINUED FORBEARANCE AGREEMENT
This Limited Waiver and Continued Forbearance Agreement (“Agreement”), dated as of October 2, 2023, is made by and among JIMMY JANG, L.P., a Delaware limited partnership, BAKER TECHNOLOGIES, INC., a Delaware corporation, COMMONWEALTH ALTERNATIVE CARE, INC., a Massachusetts corporation, and JUPITER RESEARCH, LLC, an Arizona limited liability company (collectively, the “Borrowers” and each a “Borrower”), TILT HOLDINGS INC., a British Columbia corporation (the “Parent”), and JORDAN GEOTAS, as noteholder representative (the “Noteholder Representative”) on behalf of the Noteholders.
RECITALS
WHEREAS, Borrowers, Parent, Noteholder Representative and the Noteholders are parties to that certain Secured Note Purchase Agreement dated as of November 1, 2019, as amended by First Amendment to Secured Note Purchase Agreement dated as of February 15, 2023 (as it may be further amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its provisions, the “Note Purchase Agreement”). Except as otherwise provided in this Agreement, all terms defined in the Loan Documents shall have the same meaning when used in this Agreement;
WHEREAS, on May 15, 2023, the Borrowers, Parent and Noteholder Representative entered into that certain Consent, Confirmation, Limited Waiver and Forbearance Agreement (the “May Forbearance Agreement”) pursuant to which the Noteholder Representative, at the direction of the Required Noteholders, provided a limited waiver for certain Events of Default and agreed to forbear from exercising the rights of the Noteholder Representative and the Noteholders under the Loan Documents, including, without limitation, the Note Purchase Agreement and other Loan Documents, through the expiration of the Forbearance Period (as defined in the May Forbearance Agreement);
WHEREAS, notwithstanding the limited waivers and forbearance granted to Borrowers in the May Forbearance Agreement, Default Interest (as defined in each Note and each AP Note) has continued to accrue and is presently payable; and
WHEREAS, the Loan Parties have requested that the Noteholder Representative and the Noteholders agree to modify certain terms and conditions of the May Forbearance Agreement, and the Required Noteholders have directed Noteholder Representative to enter into this Agreement on their behalf reflecting their agreement to the foregoing.
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1
Exhibit 10.1
2
Exhibit 10.1
3
Exhibit 10.1
altered or amended except by agreement in writing signed by all the parties hereto. This Agreement shall not be construed against the drafter hereof.
4
Exhibit 10.1
SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURE PAGES FOLLOW]
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| BORROWERS: JIMMY JANG, L.P., a Delaware limited partnership By: JIMMY JANG HOLDINGS INC., a British Columbia corporation, its general partner By: /s/ Tim Conder Name: Tim Conder Title: Chief Executive Officer |
| BAKER TECHNOLOGIES, INC., a Delaware corporation By: /s/ Tim Conder Name: Tim Conder Title: President |
| COMMONWEALTH ALTERNATIVE CARE, INC., a Massachusetts corporation By: /s/ Tim Conder Name: Tim Conder Title: President |
| JUPITER RESEARCH, LLC, an Arizona limited liability company By: /s/ Tim Conder Name: Tim Conder Title: Chief Executive Officer |
| CONSENTED AND AGREED: JIMMY JANG HOLDINGS INC., a British Columbia corporation By: /s/ Tim Conder Name: Tim Conder Title: Chief Executive Officer |
Signature Page to Consent, Confirmation and Forbearance Agreement
JJ BLOCKER CO., a Delaware corporation By: /s/ Tim Conder Name: Tim Conder Title: President | |
| SFNY HOLDINGS, INC., a Delaware corporation By: /s/ Tim Conder Name: Tim Conder Title: President |
| SEA HUNTER THERAPEUTICS, LLC, a Delaware limited liability company By: JJ BLOCKER CO., a Delaware corporation, its sole member By: /s/ Tim Conder Name: Tim Conder Title: President |
| |
STANDARD FARMS OHIO LLC, an Ohio limited liability company By: BAKER TECHNOLOGIES, INC., a Delaware corporation, its sole member By: /s/ Tim Conder Name: Tim Conder Title: President | |
| STANDARD FARMS LLC, a Pennsylvania limited liability company` By: BAKER TECHNOLOGIES, INC., a Delaware corporation, its sole member By: /s/ Tim Conder Name: Tim Conder Title: President |
Signature Page to Consent, Confirmation and Forbearance Agreement
| SH FINANCE COMPANY, LLC, a Delaware limited liability company By: SEA HUNTER THERAPEUTICS, LLC, a Delaware limited liability company, its sole member By: JJ BLOCKER CO., a Delaware corporation, its sole member By: /s/ Tim Conder Name: Tim Conder Title: President |
| PARENT: TILT HOLDINGS INC., a British Columbia corporation By: /s/ Tim Conder Name: Tim Conder Title: Interim CEO |
Signature Page to Consent, Confirmation and Forbearance Agreement
Signature Page to Consent, Confirmation and Forbearance Agreement
DIRECTION OF REQUIRED NOTEHOLDERS
Each of the Required Noteholders hereby direct Noteholder Representative to enter into this Agreement, take the actions required of Noteholder Representative herein, and agrees to indemnify and hold Noteholder Representative harmless from any such actions related hereto, in each case consistent with the terms of the Note Purchase Agreement, including Sections 2.6(d) and 11.2 thereof.
| A NOTEHOLDER: MAK ONE, LLLP, an Arizona limited liability limited partnership By: Dragon Wise, LLC, an Arizona limited liability company, its General Partner By: /s/ Mark Scatterday Name: Mark Scatterday Title: Sole Member |
Signature Page to Direction of Required Noteholders
A NOTEHOLDER: RHC 3, LLLP, an Arizona limited liability limited partnership By: /s/ Robert Crompton Name: Robert Crompton Title: General Partner |
Signature Page to Direction of Required Noteholders
Signature Page to Direction of Required Noteholders
A NOTEHOLDER: CALLISTO COLLABORATIONS LLC, a Washington limited liability company By: /s/ Adam Draizin Name: Adam Draizin Title: Manager |
Signature Page to Direction of Required Noteholders
Document and Entity Information |
Oct. 02, 2023 |
---|---|
Document and Entity Information [Abstract] | |
Document Type | 8-K |
Document Period End Date | Oct. 02, 2023 |
Entity File Number | 000-56422 |
Entity Registrant Name | TILT HOLDINGS INC. |
Entity Incorporation, State or Country Code | A1 |
Entity Tax Identification Number | 83-2097293 |
Entity Address State Or Province | AZ |
Entity Address, Address Line One | 2801 E. Camelback Road #180 |
Entity Address, City or Town | Phoenix |
Entity Address, Postal Zip Code | 85016 |
City Area Code | 623 |
Local Phone Number | 887-4900 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001761510 |
Amendment Flag | false |
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