Schwazze Restructures Its $32M Debt Obligations, Improving Financials To Grow Across Colorado And New Mexico

Author: Nina Zdinjak | July 12, 2024 11:42am

Medicine Man Technologies, Inc., operating as Schwazze (OTC:SHWZ) (Cboe CA: SHWZ) is restructuring its February 2025 debt obligations. The Colorado-based cannabis company announced Thursday that it finalized an agreement with two its lenders to restructure its $15.0 million Altmore, LLC loan agreement and its $17.0 million Reynold Greenleaf & Associates LLC promissory note,

The debt restructuring comes on the heels of the company's common stock transition to the OTC Expert Market, due to its delayed filing. The delay was a result of an SEC order regarding the company’s previous auditor, BF Borgers CPA PC, who was dismissed as Schwazze’s auditor prior to the SEC’s order.

Schwazze officials said the debt restructuring improves its financial position by extending the maturities of both debt instruments to the end of 2025 and materially reducing amortization payments for the Altmore loan agreement.

"This restructuring marks a pivotal accomplishment for Schwazze," stated Forrest Hoffmaster, interim CEO of Schwazze. "Extending the maturities for our near-term debt obligations provides us with the financial flexibility needed to execute our strategic growth initiatives in both Colorado and New Mexico. We appreciate our lenders for their support and confidence in our strategic vision. With the close of these agreements, Schwazze will have no debt maturities until November of 2025."

Amended Debts Highlights

Altmore Loan Agreement

• 9-month maturity date extension from February 2025 to November 2025.
• Reduction of quarterly principal payment from $750,000 to $300,000, which became effective in the Q2 2024 payment. Additionally, the Company will pay a quarterly administrative fee of $75,000.
• No change in interest rate of 15%.

R. Greenleaf Promissory Note

• 9-month maturity date extension, subject to certain conditions contained in the amendment, from February 2025 to November 2025 for 90% of the principal amount. The remaining 10% of the principal amount will be paid in February 2025.
• No change in interest rate of 5%.

Price Action

Schwazze shares closed Thursday market session 4% lower at 34 cents per share.

Read Next:

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• Schwazze’s Q1 2024 Financial Results: Takes A Hit In Colorado, Overall Cannabis Sales Up By 9%

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Photo: Courtesy of NikolayFrolochkin and ganjaspliffstoreuk by Pixabay

Posted In: SHWZ