Mr. Raj Grover reports
HIGH TIDE EXTENDS MATURITY DATE AND REDUCES INTEREST RATE OF CONVERTIBLE DEBT WITH STRATEGIC PARTNER
High Tide Inc. has reached an agreement with a strategic investor to extend the maturity of its $2-million convertible debenture and reduce the applicable interest rate pursuant to a debenture amendment agreement. The debenture amendment agreement extends the maturity date of the convertible debenture from April 18, 2021, to April 18, 2023, and reduces the applicable interest rate from 10.0 per cent to 7.0 per cent. The conversion price of 75 cents remains unchanged. The debenture amendment agreement remains subject to approval from the TSX Venture Exchange.
"I am very pleased to report that this strategic partner has agreed to extend this debenture," said Raj Grover, president and chief executive officer of High Tide. "During the past nine months, we have now announced that four lenders to High Tide have agreed to extend the maturity of their debt by more than one year and simultaneously cut the applicable interest rate -- and this encompasses $42-million in total facilities. Over the past four quarters, we have generated $13.4-million in [earnings before interest, taxes, depreciation and amortization]. Specifically, during our fiscal first quarter ended Jan. 31, 2021, we reported $4.6-million in EBITDA and positive cash flows from operations before working capital of $3.5-million. It is clear that our lenders have realized that this is not the same company they lent to some time ago in terms of risk profile, and many are willing to extend maturity and adjust terms in our favour as a result. With a current cash balance of approximately $33-million, we clearly had enough cash on hand to retire the debt we agreed to extend today; however, given the strategic nature of this partner, we mutually preferred to have them remain on our cap table."
About High Tide Inc.
High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of consumption accessories. The company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 81 branded retail locations spanning Ontario, Alberta, Manitoba and Saskatchewan. High Tide's retail segment features the Canna Cabana, KushBar, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf Cannabis banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its numerous consumption accessory businesses, including e-commerce platforms Grasscity, Smokecartel and CBDcity, and its wholesale distribution division under Valiant Distribution, including the licensed entertainment product manufacturer Famous Brandz. High Tide's strategy as a parent company is to extend and strengthen its integrated value chain while providing a complete customer experience and maximizing shareholder value. Key industry investors in High Tide include Aphria Inc. and Aurora Cannabis Inc.
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