urban-gro, Inc. Enters Into Debt Assignment, Forbearance, and Equity Exchange Agreements with Hudson Global Ventures

Key Developments That May Impact Shareholder Value

urban-gro, Inc. (“the Company”), a Nasdaq-listed entity, has announced a series of strategic financial transactions involving its outstanding indebtedness. The sequence of events, agreements, and equity issuance may have a material effect on the Company’s capital structure and could be price sensitive for shareholders.

Key Points from the 8-K Filing

• Assignment of Loan: The Company’s outstanding loan with Grow Hill LLC (originally dated October 1, 2024) has been assigned to Hudson Global Ventures, LLC. This makes Hudson the new creditor for the Company’s outstanding debt.
• Modification of Debt Terms (Forbearance Agreement): The terms of the loan were further modified. Notably, the principal balance was increased, and Hudson agreed to temporarily restrict its enforcement rights over the debt. This provides urban-gro with breathing space regarding its loan obligations.
• Debt-for-Equity Exchange (Exchange Agreement): urban-gro entered into an Exchange Agreement with Hudson, whereby a portion of the outstanding debt was satisfied through the issuance of equity securities (common stock) to Hudson. Specifically, 32,311 shares of common stock, valued at \$335,711.29 (or \$10.39 per share), were issued in exchange for a reduction of the loan principal by the same amount.
• Private Placement & Exemption from Registration: The equity issuance was conducted as a private transaction relying on Section 3(a)(9) of the Securities Act, meaning no public offering or commission was involved. Hudson was an existing creditor, and the shares were issued in exchange for the cancellation of debt.
• Shareholder Dilution: The issuance of 32,311 new shares increases the number of common shares outstanding, which could affect existing shareholders through dilution.
• Assurances and Representations: urban-gro confirmed compliance with all reporting requirements under the Securities Exchange Act of 1934, and that all information provided to Hudson was accurate and complete. The company further warranted that no material adverse changes had occurred since its last financial statements, and that it is not aware of any pending or threatened litigation that would materially affect the company.
• No Finder’s/Broker Fees: Both parties confirmed that no broker or finder’s fees, or similar payments, were incurred in connection with the transaction.
• Full Details Incorporated by Reference: The agreements (Assignment, Forbearance, Exchange) are filed as exhibits to the 8-K and are incorporated by reference.

What Shareholders Need to Know

• Potential Share Price Impact: The conversion of debt into equity relieves the Company of part of its debt burden, potentially improving its balance sheet and liquidity. However, the issuance of new shares can cause dilution for existing shareholders, which may pressure the share price.
• Material Transaction: This is a material transaction that changes the Company’s creditor and modifies the terms of its indebtedness, with a partial debt-for-equity swap. Such moves are typically market sensitive as they directly affect the company’s capital structure and leverage.
• Regulatory Compliance: The Company claims to be in full compliance with SEC reporting obligations and that all required filings have been made. This is important for maintaining investor confidence and exchange listing status.
• No Pending Litigation or Adverse Changes: urban-gro has represented that there are no pending legal actions or adverse material changes that would affect its operations or financial health at the time of the filing.
• Future Flexibility: The agreements allow for further amendments/modifications in writing, providing flexibility if circumstances change.
• Nasdaq Listing Maintained: The Company’s common stock remains listed on the Nasdaq Stock Market.

Transaction Details

• Number of Shares Issued: 32,311
• Aggregate Value of Shares: \$335,711.29
• Price Per Share: \$10.39
• Counterparty: Hudson Global Ventures, LLC
• Type of Transaction: Debt-for-equity exchange (pursuant to Section 3(a)(9) of the Securities Act)
• Date of Transaction: Agreement signed and 8-K filed in April 2026

Signatures

• urban-gro, Inc.: Signed by Chief Executive Officer Bradley Nattrass
• Hudson Global Ventures, LLC: Signed by Member Seth Ahdoot

Conclusion

The assignment and restructuring of urban-gro, Inc.’s debt to Hudson Global Ventures, coupled with the partial conversion of debt into equity, are significant events for the Company and its shareholders. While these actions improve short-term liquidity and reduce debt, they come with the trade-off of shareholder dilution. Investors should closely monitor future disclosures and financial performance as the company executes its turnaround strategy.

Disclaimer: This article is based on information disclosed by urban-gro, Inc. in its Form 8-K and related exhibits. While care has been taken to accurately reflect all material developments, investors are advised to review the full SEC filings and consult their financial advisors before making investment decisions. This article does not constitute investment advice or a recommendation to buy or sell securities.

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