Staff
After the market closed on Monday, iAnthus Capital Holdings, Inc . (CSE: IAN) (OTC: ITHUF) reported its financial results for the three months ended March 31, 2021. iAnthus said that revenue rose 70% to $51.8 million. The net loss was $19.5 million, or a loss of $0.11 per share versus a loss of $236.3 million, or a loss of $1.38 per share, in the same quarter in the prior year.
The company noted that due to liquidity constraints it did not make applicable interest payments due on its 13% senior secured convertible debentures and its 8% convertible unsecured debentures due during 2020. The non-payment of interest in March 2020 triggered an event of default, which, as of March 31, 2021, consisted of principal amounts at face value of $97.5 million and $60.0 million, and accrued interest of $19.0 million and $6.0 million, on the Secured Notes and Unsecured Debentures, respectively.
As a result of the default, iAnthus has accrued additional fees and interest of $14.2 million. Most shareholders are aware that in July 2020 iAnthus entered into a restructuring agreement with its debtholders to begin a proposed recapitalization transaction in Canada. However, some of the transactions that the company wants to undertake have triggered the requirement for approval by state-level regulators in certain U.S. states with jurisdiction over the licensed cannabis operations owned, in whole or in part by iAnthus in such states. In February, the Nevada Cannabis Compliance Board approved the proposed change of ownership and control of the company’s wholly-owned subsidiary, GreenMart of Nevada NLV, LLC, contemplated by the Recapitalization Transaction. Similar state-level regulatory approvals are being sought in Florida, Massachusetts, Maryland, New York, New Jersey, and Vermont.
If the Recap plan is consummated, iAnthus said it intends to issue up to an aggregate of 6,072,579,699 common shares upon the extinguishment of (i) $22.5 million of Secured Notes (including the Exit Fees), (ii) $40.0 million of Unsecured Debentures, including interest accrued thereon, and (iii) interest accrued on the interim financing in the amount of $14.7 million provided by the Secured Lenders.
