- Aleafia Health Inc. (AH) has reached an agreement with a nominated committee to amend certain terms of its unsecured convertible debentures
- It has also entered subscription agreements for units for $5.6 million
- The conversion price will be reduced from $1.47 to $0.25 but will increase over time
- The debenture amendments and the private placement will close during this quarter
- Aleafia is a cannabis health and wellness company
- Aleafia Health Inc. (AH) is down 5.88 per cent trading at $0.08 per share as of 1:31 p.m. ET
Aleafia Health (AH) has reached an agreement with a nominated committee to amend certain terms of its unsecured convertible debentures.
The company has also entered subscription agreements for units, which are to be made up of common shares and warrants, for $5.6 million on a private placement basis.
Under the amended terms, 68.1 million units will be issued on a private placement basis at a price of $0.0825 each. Each unit will include one common share and half of one common share purchase warrant. A warrant is exercisable into one common share at an exercise price of $0.1025 for a four-year period.
The convertible debentures will be exchanged over three separate tranches every two years until 2028. The company believes this will allow more flexibility to finance its growth initiatives. The interest rate is 8.5 per cent, but there will be no mandatory cash interest payment for 30 months.
The conversion price will be reduced from $1.47 to $0.25 for the first tranche of debentures which will be issued in 2024. Following that it will change to $0.30 in 2026 and $0.35 in 2028.
The debenture amendments and the private placement are expected to close during this quarter. The debentures (AH.DB) will mature on June 27th.
The net proceeds will fund working capital, capital expenditures, and other general corporate purposes.
There is no insider participation in the private placement, but a finder’s fee of 3.4 million common shares will be paid to certain finders.
Aleafia Health Inc. (AH) is down 5.88 per cent trading at $0.08 per share as of 1:31 p.m. ET.