Medipharm Labs (TSX: LABS) appears to be focused on cleaning up its balance sheet. The firm this morning indicated it has settled an unsecured convertible debenture eighteen months ahead of schedule.
The debenture in question originated as a $41.0 million unsecured convertible facility, originally issued on June 8, 2020. Repayment began three months later via bi-monthly payments, which could be settled in either cash or shares.
Originally issued for a three year term at a 7.75% discount, the debt was to see bi-monthly payments of $320,000 payable in shares, with such shares to be issued at 90% of the 5 day volume weighted average price at the time of settlement. That rate fell to 87% of the 5 day volume weighted average price in the event the company was trading below $1.00 per share.
Effectively, the repayment of the debt blew up the firms cap table. As of September 30, just $23.8 million in principal had been repaid in the nine month period, and the firm had already issued 50.2 million common shares to settle debt. In 2020, the firm issued a total of 13.5 million common shares to settle $8.8 million in principal amount of the note.
While the firm indicated the debt has now finally been settled, well in advance of the original due date, its unclear just how many shares in total were issued to settle the debt on an accelerated basis. The firm however saw its equity slide from $1.89 all the way down to $0.185 per share in the process.
With the debt now settled, the firm has indicated it has no other material debt, and maintains full ownership over its assets.
Medipharm Labs last traded at $0.185 on the TSX.
Information for this briefing was found via Sedar and MediPharm Labs. 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.
