On Monday, the stock had fallen to 32 cents – near its all-time low of 31 cents last November. Safe Harbor filed a proxy statement with SEC Monday showing Partner Colorado owned 38.8% of the company’s 55.7 million shares, which at 32 cents made its stake worth $6.9 million.

“As one of the largest shareholders, we realize that Safe Harbors’ success contributes to the success of our members,” Partner Colorado President/CEO Doug Fagan said in Tuesday’s news release from Safe Harbor. “We expect this debt modification will provide Safe Harbor with the financial flexibility needed to pursue new opportunities. This agreement underscores our commitment to supporting Safe Harbor’s long-term success and stability.”

Safe Harbor, which has not yet released its fourth-quarter results, filed the proxy to call for a special meeting March 13 to allow a reverse stock split designed to boost the price of the stock to allow it to maintain its Nasdaq listing.

After the September 2022 spinoff, Partner Colorado members had been promised $56.9 million from Safe Harbor. In an initial concession in early 2023, Partner Colorado members exchanged that promise of cash for a $14.5 million note, which was to be repaid over five years at 4.25%, or about $268,679 per month. The company still owes members about $9.6 million.

In the agreement announced Tuesday, Safe Harbor will be allowed to make interest-only payments for two years starting from February 2025, when it suspended payments. At the time, interest was about $50,600 per month. The news release said the payments will remain based on the original 4.25% interest rate “throughout the remainder of the term," but didn’t state if the term will be extended to allow full payment of the outstanding principal, or other adjustments will be made for full payment.

The news release did say that “these modified terms are expected to unlock more than $6 million in cash that would have otherwise been allocated to principal amortization over the next two years.”

Terry Mendez, CEO of Safe Harbor Financial, called the debt modifications “a pivotal moment” for the company.

“Not only does the note modification significantly enhance our financial standing, I can confidently say that it also provides Safe Harbor with tremendous optionality as we enter this new chapter,” Mendez said.

“The new agreement with PCCU provides us with flexibility to pursue additional opportunities to enhance and expand our service offering and reinforces our commitment to delivering long-term value to all stakeholders,” he said.