Liberty Health Sciences to extend debentures

Liberty Health Sciences to extend debentures

The cannabis company is prepared to extend the expiration of the debt by 12 months

Cannabis provider Liberty Health Sciences (CNQ: LHS has made a huge impact on Florida’s dispensary market, launching a number of new shops as 2020 has progressed. It is one of the leading cannabis companies in the state, and recent changes to Florida’s medical cannabis laws have given it even more stability to continue its growth. As it looks to keep the forward momentum going, Liberty Health Sciences has announced that it is giving investors who purchased certain senior secured convertible debentures an extra year to hold the products.

Liberty Health Sciences issued 12% senior secured convertible debentures in November 2017, for which it received gross proceeds of $12 million. The investment funds were used to help the company expand its footprint in Florida, and Liberty Health Sciences already repaid half the aggregate principal amount, $6 million, in December of last year. That left another $6 million outstanding.

They are set to expire next month; however, holders can now opt to keep the debentures until the same date next year. If holders choose to accept the option, the debentures can later be converted to common shares at a reduced rate of $0.65, down from their current value of $1.52. However, the interest rate will move from 12% to 13% per year, and the redemption price (the price at which the Debentures may be redeemed for cash) “will be reduced to 100% (expressed as a percentage of the principal amount to be redeemed) plus accrued and unpaid interest as of the date of any such redemption.”

The company adds in a statement, “Those Debenture holders who do not select the Extension Option or that make no selection by the applicable deadline of November 10, 2020, will have their Debentures repaid at the current maturity date of November 22, 2020, in accordance with their terms. The Company expects to repay those Debentures that are maturing and tendered for repayment on November 22, 2020, out of existing funds, available credit facilities or as a result of a concurrent issue of new debentures. The Extension Option is subject to the receipt of all applicable regulatory and stock exchange approvals.”

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