Tilt Holdings (CSE: TILT) will resume trading this morning, following its halt issued on Friday. Despite high anticipations among investors, the reason behind the halt appears to be that the firm has conducted a financing to the tune of US$25.6 million. An additional $9.4 million financing may close within the next 45 days.
The funds, which were raised from existing shareholders as well as new investors, will be used to retire a loan taken out by the firm in April, which amounted to US$20 million while bearing an interest rate of 18.75% per annum.
The new funding takes the form of senior secured notes. The notes, which bear interest at a rate of 8.0% per annum, are for a term of 36 months. For each $1,000 of debt issued, 1,800 warrants are to be issued to the lender, representing a total 45% warrant coverage on the debt. Each warrant is exercisable at C$0.33 for a period of 3 years. Approximatly 46 million warrants will be issued at $0.33 as a result of the current financing.
Lastly, the firm has also restructured certain debts with the sellers of Juniper Research LLC. The debt, currently sitting at US$35 million, will now have a maturity rate of January 2023, and bears interest at a rate of 8.0% per annum. The debt was previously unsecured, however it now has a junior secured position, which is secondary to the financing announced this morning.
In a ‘grow for growth’s sake market,’ we are pleased to pair steady growth with principled financial discipline. Our goal is for TILT to become one of the top revenue generating and profitable cannabis companies in the industry. We are exciited to share our Q3 results in a few weeks.Mark Scatterday, Interim CEO of Tilt Holdings
As part of the financing agreement, the financing syndicate will be allowed to elect two independent board members to Tilt’s Board of Directors. The two proposed directors, whom are currently unnamed, will be appointed shortly.
Tilt Holdings closed Friday’s session at $0.39 on the CSE.
Information for this commentary and analysis was found via Sedar and Tilt Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.