$0.2004 per Unit - Right sizing debt with some dilution - VIVO Cannabis™ Announces Agreement to Amend Outstanding Debentures
TORONTO, Sept. 16, 2020 /CNW/ – VIVO Cannabis Inc. (TSX: VIVO) ("VIVO" or the "Company") announces that the holders of its 6% unsecured convertible debentures dated February 28, 2018 (each, a "Debenture" and collectively, the "Debentures"), due on February 28, 2021, have approved certain amendments to the Debentures by way of extraordinary resolution of the holders.
VIVO Cannabis Inc. (CNW Group/VIVO Cannabis Inc.)
"We are pleased to have reached an agreement that reduces our total debt obligations by over 75%, and materially decreases our interest expense," commented Barry Fishman, CEO of VIVO. "This transaction also offers remaining debenture holders an improved conversion rate, aligned with current market conditions, and provides additional flexibility for VIVO to execute our growth plans and accelerate the path to near-term profitability."
As a result of these amendments, the Company will have $6.6 million in outstanding 6% convertible debentures, due September 15, 2022, compared to $27.1 million prior to the amendments. The amendments are expected to become effective on or about September 17, 2020.
The amendments to the Debentures provide for, among other things, (i) the prepayment of 44.32% of the outstanding principal amount of the Debentures, being $10,468,384, on a pro rata basis, at a price of $1,000 per Debenture, together with accrued and unpaid interest thereon up to but excluding the repayment date, and (ii) the conversion of 27.84% of the outstanding principal amount of the Debentures, being $6,575,808, on a pro rata basis, in consideration for the issuance of units of the Company (each, a "Unit") at a price of $0.2004 per Unit, leaving a principal amount of $6,575,808 outstanding. Each Unit to be issued will be comprised of one common share in the capital of the Company (each, a "Share") and one half of one share purchase warrant, with each whole warrant entitling the holder to acquire one Share at an exercise price of $0.2672 until September 15, 2022 .
Subject to the issuance of the Units to the holders of the Debentures, the amendments to the Debentures will extend the maturity date of the Debentures from February 28, 2021 to September 15, 2022, and reduce the conversion price of the Debentures from $4.00 per Share to $0.2672 per Share.
Concurrent with the prepayment of the Debentures, the Company intends to repay the $3,500,000 principal amount outstanding on its 7% unsecured convertible debentures due December 21, 2020.
About VIVO Cannabis™
VIVO Cannabis™ is recognized for trusted, premium cannabis products and services. It holds production and sales licences from Health Canada and operates world-class indoor and seasonal airhouse cultivation facilities with proprietary plant-growing technology in Hope, British Columbia and Napanee, Ontario. VIVO has a collection of premium brands, each targeting different customer segments, including Canna Farms™, Beacon Medical™, Fireside™, Lumina™ and Canadian Bud Collection™. The Company is expanding its production capabilities and distribution network. Harvest Medicine, VIVO’s patient-centric, scalable network of medical cannabis clinics, has serviced over 100,000 patient visits. VIVO is pursuing several partnership and product development opportunities and is focusing its international efforts on Germany and Australia. The Company has a healthy balance sheet and is well-positioned to accelerate its path to profitability. For more information visit: vivocannabis.com
Disclaimer for Forward-Looking Information
All dollar amounts in this news release are in Canadian dollars. Certain statements in this news release are forward-looking statements, which are statements that are not purely historical, including statements regarding the beliefs, plans, expectations or intentions of VIVO and its management regarding the future. Forward-looking statements in this news release include statements regarding the proposed amendment to the Debentures. Forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the forward-looking statements, including: that procedural delays may impact the expected timing of completion thereof, and other factors beyond the Company’s control. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors, and the more extensive risk factors included in the Company’s annual information form for the year ended December 31, 2019, which is available on SEDAR, carefully in evaluating the forward-looking statements contained in this news release, and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements in this news release are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
SOURCE VIVO Cannabis Inc.
