This morning iAnthus (CSE: IAN) announced a plan to issue upto $100M of convertible notes, with $20M already closing.
The terms of the deal are:
- The first $20M tranche has closed to Green Gotham Partners (GGP)
- 19.5 months / 1.625 years (assuming iAnthus extends the notes an extra 12 months)
- 13% coupon per annum, paid quarterly
- $1.89 US ($2.50 CAD) conversion price
- 50% warrant coverage, 3 year warrants with $1.97 exercise price
- GGP has the right to purchase $66.5M of additional notes.
- iAnthus may find another partner for an additional $13.5M of notes under the same terms.
- The additional $80M of notes will have essentially the same terms.
How This Stacks Up Against the Torian Deal
This deal is not quite the sweetheart deal offered by Torian Capital, which came with 9% interest and 20% warrant coverage, but more importantly was not convertible. Allowing iAnthus to hold off on diluting at such depressed levels.
In a piece on the Deep Dive over the weekend titled “Vanishing Vultures: Are iAnthus, Harvest and TILT’s Debt Deals A Predatory Trap Or A False Bottom?“, we speculated on the possibility that iAnthus, Harvest and TILT would have to find alternative financing as their recent debt deals were unlikely to close.
iAnthus Still Executing
A quote by current COO Pat Tiernan sums up how iAnthus management team has been executing their plan:
“Our business has never been stronger. We currently have 27 open dispensaries, 11 of which have opened in the last ten months. We are working aggressively to open another 12 in the next six months. We are growing in each of our markets and are one of the only MSOs that has meaningful revenue in multiple states, including Arizona, Colorado, Florida, Maryland, Massachusetts and Nevada, with strong same-store sales growth across our footprint. Pro forma for our pending Sierra Well acquisition, we are generating in excess of $10 million of reported and managed revenue per month, with a rational cost structure that has us well-positioned for future success.”
Information for this briefing was found via iAnthus Capital. The author has no securities or affiliations related to these organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
SmallCapSteve started blogging in the Winter of 2009. During that time, he was able to spot many take over candidates and pick a variety of stocks that generated returns in excess of 200%. Today he consults with microcap companies helping them with capital markets strategy and focuses on industries including cannabis, tech, and junior mining.