Circle8 settles with SPP, cancels $35M convertible note

Circle8 Group, Inc. (Nasdaq: CIRC) announced it has executed a definitive settlement agreement with SPP Credit Advisors, LLC, resolving all outstanding litigation between the two parties and canceling the company's $35 million Convertible Seller's Note due March 2027.

The agreement eliminates all future stock conversion rights and potential equity dilution associated with the note, cures existing defaults under Circle8's obligations to SPP, and restores remaining indebtedness to its contractual non-default interest rate.

As part of the settlement, SPP will grant Circle8 an irrevocable option to purchase approximately 21.9 million existing shares currently owned by SPP for $0.0001 per share. Simultaneously, Circle8 will issue approximately 21.9 million newly registered shares to SPP. Upon closing, SPP will irrevocably relinquish all voting, dividend, and other shareholder rights associated with the existing shares pending their retirement.

The agreement establishes an approximately 18-month orderly share disposition framework under which shares used to satisfy remaining SPP indebtedness may be sold. Upon full repayment, whether through share sales, refinancing, or otherwise, any remaining shares will be returned to Circle8.

Pending litigation in Delaware and New York courts will be dismissed, with mutual releases granted among the parties.

"By resolving these legacy financing matters, eliminating our $35 million Convertible Seller's Note and substantially simplifying our capital structure, we have strengthened our financial position and removed a major source of uncertainty," said Guus Franke, Chief Executive Officer of Circle8 Group.

Circle8 also stated it continues to evaluate refinancing options for Lyneer Staffing's senior asset-based lending facility as part of its broader capital structure review.

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