Aleafia Health Inc. (OTCMKTS: ALEAF) has offered a corporate update about its outstanding unsecured convertible debentures issued on June 27, 2019, with a maturity of June 27, 2022.
Aleafia commences discussions about revising convertible debt with holders
The company has begun discussions with debenture holders in the hopes of revising the Convertible Debt in a way that benefits all stakeholders of the company
Interestingly the company has decided not to make an interest payment due on December 31, 2021, while negotiations are ongoing. There is no risk of default under the Convertible Debt provisions because of the non-payment for 30 days after the due date of the interest payment. Holders of over fifty percent (50%) of the principal Convertible Debt amount may also waive by an Extraordinary Resolution or by a decision in the event of default. There is no guarantee that the current conversations will lead to a deal or that, if one is pursued, it will be completed successfully and on time.
Aleafia closes 19 million credit facility
Recently the company closed a credit facility of $19 million. Toronto-based lender Garrington Group of Companies is funding the Credit Facility. The Garrington Group of Companies provides working capital to the underprivileged, small to the mid-sized middle sector of the market across North America, with credit facilities ranging from $1 million to over $30 million. It comprises a $7 million revolving receivables facility and a $12 million term loan. December 2023 is the maturity date. The company drew the term loan in full at the time of closing. The revolving debts facility will be drawn down in January 2022 and then again when receivables expand in tandem with revenue.
Aleafia Health CEO Geoffrey Benic said, “This financing improves our liquidity and capital structure as the company’s senior secured debt obligations will now mature in December 2023 rather than in August 2022. The transaction allows us to continue the growth of our core adult-use and medical cannabis sales channels, as we again expect to realize sequential growth in both channels over the previous quarter.”
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