Liberty agrees to restructure and repay existing debentures and issue new debentures
TORONTO, Nov. 18, 2020 /CNW/ - Liberty Health Sciences Inc. (CSE: LHS) (OTCQX: LHSIF) www.libertyhealthsciences.com ("Liberty" or the "Company"), a provider of high-quality cannabis, provides the following update on its restructuring offer on its outstanding 12% Senior Secured Convertible Debentures that mature on November 22, 2020 and were originally issued on November 22, 2017 (the "Debentures").
The Company had previously announced on October 26, 2020, that it was offering all holders (the "Debentureholders") of its Debentures a 12-month extension to the maturity date (the "Extension Option") together with certain other amendments to the conversion price, interest rate, and redemption price.
The Debentures were originally issued pursuant to a private placement offering, which closed on November 22, 2017, for gross proceeds of US$12 million. The Company repaid an aggregate principal amount of US$6 million of the Debentures in December 2019, and there is currently an aggregate principal amount of US$6 million of the Debentures remaining outstanding.
Debentureholders holding an aggregate principal amount of approximately US$3.1 million aggregate principal amount have accepted the Extension Option with the balance of the holders, or approximately US$2.9 million aggregate principal amount of the Debentures, being repaid at maturity plus accrued interest.
Certain investors have agreed to subscribe for approximately US$1.25 million aggregate principal amount of a new issue of debentures of the Company (the "New Debentures"), which funds will be used to repay those Debentures that are being repaid at maturity.
The New Debentures will be issued as a new series of debentures pursuant to the original trust indenture dated November 22, 2017, and will have the same terms as the Debentures restructured pursuant to the Extension Option as follows:
i) | the applicable per share conversion price at which the Debentures may be converted by the holders, in whole or in part, into common shares of the Company, will be Cdn $0.85; |
ii) | the interest rate will be 13% per annum; |
iii) | the redemption price, being the price at which the Debentures may be redeemed for cash, will be 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; and |
iv) | the maturity date of the Debentureholders will be November 22, 2021. |
The Company will repay from cash on hand any shortfall between the proceeds from the issue of the New Debentures and the amount remaining outstanding upon the maturity of on the Debentures.
The issue of the New Debentures and the completion of the Extension Option are subject to the receipt of all applicable regulatory and stock exchange approvals.
About Liberty Health Sciences Inc.
Liberty is the cannabis provider committed to providing a high-quality cannabis experience based on our genuine care for all cannabis users and a focus on operational excellence from seed to sale. For more information, please visit: www.libertyhealthsciences.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains certain forward-looking statements within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "believe", "plan", "intend" or the negative of these terms and similar expressions. Forward-looking statements in this news release include, but are not limited to, expectations related to the Company's production capabilities, expectations concerning the receipt of all necessary approvals from the Florida Department of Health, expectations concerning the opening of new dispensaries and the expansion of its greenhouse space, and the Company's future expansion and growth strategies. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving medical marijuana; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favorable terms; the medical marijuana industry in the United States generally, income tax and regulatory matters; the ability of Liberty to implement its business strategies; competition; crop failure; currency and interest rate fluctuations and other risks. Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
SOURCE Liberty Health Sciences Inc.
