CAMBRIDGE, Mass.- October, 02 2019,-(BUSINESS WIRE)–TILT Holdings Inc. (“TILT” or the “Company”) (CSE: TILT) (OTCQB: TLLTF), a foundational technology cannabis platform comprised of assets to support brands worldwide, announced today that the Company has negotiated an agreement with six of its remaining founders regarding the immediate forfeiture of all 60,217,088 stock options granted at the time of the merger, as well as the final separation of most of these founders from the Company. During the second quarter of fiscal 2019, the Company reported stock-based compensation expense of greater than $47 million associated with these now forfeited stock options. Adjusting for the subsequent forfeiture, TILT’s Q2 2019 net loss of $48.9 million would have been almost entirely reduced, bringing the Company close to break-even. The successful forfeiture of these stock options follows the recent announcement of an adjusted EBITDA positive month of July.
The reduction of this excessive financial overhang on TILT’s consolidated results from the founders’ incentives should not only improve profitability, but reduce potential future dilution on our valued shareholders.
Mark Scatterday, interim CEO of TILT
This resolution with these individuals will yield significant improvements to our net earnings profile and reflects the Company’s focus on enhancing shareholder value. This news, paired with the changes we have made in management and implemented in our operations, positions us better financially than we ever have been to date.
He also added, “Since accepting the role of interim CEO, I have been focused on achieving profitability, unlocking shareholder value and further positioning TILT for success. TILT is fundamentally different today from just four months ago. We still have work to do, but we are making great strides in just a small amount of time with new leadership in place and we are looking forward to sharing our Q3 2019 results with the public.”
Since his appointment in May 2019, Mr. Scatterday has spent much of his time focusing on reforms to many of the financial and structural issues within the Company, including a focus on reducing or eliminating the Company’s outstanding stock-based compensation expense in connection with the founders of the Company, as well as changes in senior management to improve operations. This expense reduction will greatly benefit the profitability of the organization and continue to build shareholder value.
The Company also announced today that in connection with the separation of several founders, the Company will be issuing, in accordance with Company policies, an aggregate of 9,045,690 common share purchase warrants (“Warrants”) to such founders, each Warrant exercisable into one common share of the Company at a price of CAD$1.05 for a period of five years. The financial impact of these “out-of-the-money” Warrants aligns with the Company’s focus on driving shareholder value and achieving long-term success.
To learn more about TILT Holdings Inc. visit www.tiltholdings.com.
About TILT
TILT Holdings serves cannabis brands worldwide through a strong network of portfolio companies committed to technological innovations that support long-term success. TILT services more than 2,000 brands and cannabis retailers across 33 states in the U.S., as well as in Canada, Israel, Mexico, South America and the European Union. As a market leader in cannabis technology and related products and services, the Company’s core assets include wholly-owned subsidiaries Jupiter, a company that focuses on the vast potential of inhalation through innovative design, development and manufacturing; Blackbird Logistics Corporation, a company that provides operations and software solutions for wholesale and retail distribution; and Baker Technologies Inc., a CRM platform helping dispensaries grow their business. The Company also owns cannabis operations in states including Massachusetts, led by Commonwealth Alternative Care, Inc.; and in Pennsylvania, led by Standard Farms, LLC. Headquartered in Cambridge, Massachusetts, with offices throughout the U.S., and London, TILT has over 400 employees and has sales in the U.S., Canada and Europe. For more information, visit www.tiltholdings.com.
