High Tide Inc (CSE: HITI) has managed to bolster its balance sheet as of this morning, with the announcement that it has somehow managed to convince a key investor to extend the maturity of $10.8 million in debt from December 2020 to that of January 2025. The kicker, is that interest has also been removed from the debt.
The debt, given the timing of the debentures and size of the issuance, is believed to be held by that of Aurora Cannabis (TSX: ACB) (NYSE: ACB). However, High Tide simply refers to the party as a “key industry investor.”The debt was originally issued in 2018 under an 8.5% unsecured convertible debenture.
Under the amended terms, the unsecured debenture will now be converted to a secured debenture, secured by the assets of the company and certain subsidiaries. While no interest will accrue on the debt, High Tide will be required to make “certain structured installment payments,” over a period of three years commencing November 1, 2021. These payments are to be credited to the principal amount of debt, and not classified as interest payments. The new debt will also be convertible at $0.425, a decline from the original $0.75 per share conversion price.
Any unpaid amounts on the maturity date, which is now January 1, 2025, will bear interest at a rate of 8.5% per annum. $1.33 million in principal is believed to remain outstanding on the initial unsecured debenture.
High Tide last traded at $0.15 on the CSE.
Information for this briefing was found via Sedar and High Tide Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
