iAnthus Revenues Increase Despite Plodding Restructuring

iAnthus Capital Holdings, Inc . (CSE: IAN) (OTCPK: ITHUF) reported its financial results for the three ending June 30, 2021 as revenue increased 57% to $54.2 million. The company trimmed its net losses to $15.3 million, or a loss of $0.09 per share, versus a loss of $24.8 million, or a loss of $0.14 per share, in the same quarter in the prior year.

Despite a gross profit of $31 million, iAnthus did not make interest payments due on its 13% senior secured convertible debentures and its 8% convertible unsecured debentures due during 2020. As previously disclosed, the non-payment of interest in March 2020 triggered an event of default with respect to these components of the company’s long-term debt, which, as of June 30, 2021, consisted of principal amounts at face value of $97.5 million and $60.0 million, and accrued interest of $22.9 million and $7.2 million, on the Secured Notes and Unsecured Debentures, respectively. In addition, as a result of the default, as of June 30, 2021, the Company has accrued additional fees and interest of $14.6 million (“Exit Fees”) in excess of the aforementioned amounts that are further detailed in the company’s financial statements.

Restructuring Continues

In 2020, iAnthus entered into a restructuring support agreement that was amended on June 15, 2021 with the holders of its Secured Notes and a majority of the holders of its Unsecured Debentures to effectuate a proposed recapitalization transaction to be implemented by way of a court-approved plan of arrangement under the Business Corporations Act British Columbia ). The company is required to issue an aggregate of 6,072,579,699 common shares upon the extinguishment of (i) $22.5 million of Secured Notes (including the Exit Fees) plus interest accrued thereon, (ii) $40.0 million of Unsecured Debentures plus interest accrued thereon, and (iii) interest accrued above the principal amount of $14.7 million of the interim financing provided by the Secured Lenders.

iAnthus said in its statement that on February 23, 2021, 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. On June 17, 2021, the Massachusetts Cannabis Control Commission approved the proposed change of ownership and control of the current licenses held by the Company’s wholly-owned subsidiaries, Mayflower Medicinals, Inc., and Cannatech Medicinals, Inc. contemplated by the Recapitalization Transaction. Similar state-level regulatory approvals are being sought in FloridaMarylandNew YorkNew Jersey, and Vermont.

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