The Cannabist Company Holdings Inc. CBSTF 3LP announced Friday that it intends to complete a private placement of up to $19.5 million aggregate principal amount of 9% senior secured convertible debentures due 2027.
The company said in a press release that it has received binding commitments for $17.5 million and may enter into additional commitments for $2 million of notes before closing.
Additionally, the company plans to issue $6.25 million of notes in exchange for the cancellation of previously issued 6% senior secured convertible notes due 2025 held by certain offshore institutional investors.
The notes will be senior secured obligations of the company and mature in March 2027, unless earlier converted or repurchased. The conversion rate will be 3,278.6 common shares in the capital of the company per $1,000 principal amount of notes, equivalent to a price of approximately $0.305 per common share.
The closing of the offering is expected to occur on or about March 19, 2024, and is subject to the completion of formal documentation and receipt of all regulatory approvals, including the approval of the exchange.
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The Cannabist plans to use net proceeds from the offering to repay debt, including the remaining $13.2 million of 13% senior secured notes due May 2024, working capital and general corporate purposes.
In the meantime, the company entered into a binding agreement with certain offshore institutional investors to effect a previously announced repurchase of up to $25 million of the principal amount of the company’s 6% senior secured convertible notes due June 2025.
On Wednesday, Cannabist reported its financial and operating results for the three months and full year ended Dec. 31, 2023, revealing a 76% year-over-year decrease in a net loss to $72.5 million in the fourth quarter. Quarter-over-quarter net loss grew by 100% in the fourth quarter.
The New York cannabis producer reported its 2023 revenue was consistent with 2022, hovering around $511 million.
CBSTF Price Action
Cannabist’s shares traded 3.2349% lower at $0.2393 per share at the time of writing on Friday.
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