urban-gro defaults on $1.94M loan, debt jumps to $2.8M under forbearance deal

The company was in default on a $1.94 million loan and entered a forbearance agreement with new lender Hudson Global Ventures. Hudson agreed not to exercise remedies until April 30, 2026, or earlier if certain events occur. This is a temporary reprieve that does not waive the default.

The company will issue common stock to Hudson in exchange for reducing a portion of the loan balance. The shares will be delivered via DWAC and made free trading, with the holding period dating back to October 1, 2024. This will dilute existing shareholders while reducing debt.

The company gave up legal claims against Hudson and related parties, reaffirmed all loan obligations, and acknowledged the default remains active. After the forbearance period ends, Hudson can pursue all remedies including potentially seizing collateral.

The company's existing debt was assigned to a new holder named Hudson. A forbearance agreement was executed that increased the principal amount owed and temporarily limits the lender's ability to enforce collection or remedies. This suggests the company may be experiencing financial stress requiring debt restructuring.

The company entered an exchange agreement to convert part of its debt into equity securities, reducing the debt burden but diluting existing shareholders. Any debt not converted through this exchange remains outstanding as a company obligation.

urban-gro issued shares (Exchange Shares) to Hudson in a private transaction without SEC registration, relying on a Section 3(a)(9) exemption. This exemption applies when a company exchanges new securities with an existing security holder for cancellation or modification of existing debt, with no commissions paid. The filing indicates Hudson was an existing creditor and the shares were issued in exchange for debt.

The company restructured its debt obligations with Hudson by issuing equity instead of cash repayment. This converts debt into equity ownership, which dilutes existing shareholders but reduces the company's debt burden and interest obligations. The specific terms and amounts are referenced in Item 1.01 but not detailed in this excerpt.

The company entered into a forbearance agreement with Hudson Global Ventures, LLC on April 20, 2026. A forbearance agreement typically means a creditor is temporarily refraining from exercising rights (such as demanding payment or enforcing remedies) under an existing obligation, suggesting the company may be experiencing financial stress or covenant issues. The agreement involves both the parent company and its Canadian subsidiary.

The company executed an exchange agreement with Hudson Global Ventures, LLC on the same date as the forbearance agreement. While the specific terms are not disclosed in this 8-K, exchange agreements typically involve swapping one form of obligation for another (such as debt for equity or restructuring payment terms), often as part of a financial restructuring or workout scenario.

An assignment and assumption agreement was executed between Grow Hill LLC and Hudson Global Ventures, LLC. This type of agreement typically transfers rights and obligations from one party to another. The connection to urban-gro is not explicit in the exhibit title, but its inclusion in this 8-K suggests it relates to the company's obligations or assets being assigned between these entities.