Gotham Green Archives - Green Market Report

Debra BorchardtSeptember 3, 2021


The saga of the once-promising cannabis company iAnthus (OTC: ITHUF) continues as the company has now turned against its lender (and one-time savior) Gotham Green Partners. The latest move comes just as a New York court dismissed a shareholder lawsuit led by Hi-Med LLC that claimed iAnthus had the money to make its debt payments to Gotham Green but instead defaulted and created a situation that would allow Gotham Green to take the company from shareholders. Green Market Report was able to view the case filed by iAnthus against Gotham Green for this story.

iAnthus Wants Gotham Gone

The new case is filed by current iAnthus CEO Randy Maslow in the Ontario Supreme Court against Gotham Green after the lender asked the court to give it an indefinite amount of time to restructure. When iAnthus didn’t make its debt payments to Gotham Green, the lender moved to take over the company. The problem that the reorganization is facing is that Gotham Green has investments in many of the cannabis companies competing against iAnthus. Several states have restrictions against cross-ownership and so Gotham Green is having trouble getting approvals in many states. States often don’t want one company owning too many licenses in any given area so that there is healthy competition and opportunities for less-funded applicants.

The case stated, “Despite the passage of a further two months, approval is still outstanding from four of the five U.S. state regulators, specifically those in Florida, Maryland, Massachusetts and New York. These states represent over 80% of iAnthus’ storefronts and over 70% of iAnthus’ operational facility space. Their importance is only expected to increase in the coming years.” The original restructuring agreement occurred in July 2020 and gave the company a year to get the approvals. iAnthus also accuses Gotham of causing the delays leaving the company in limbo. The only state that has given its approval is Nevada.

MedMen is specifically mentioned as an issue of cross-ownership problems. The case says that Gotham owns approximately 60% of the MedMen voting shares due to the financing Gotham provided the company. Confusing this situation, even more, is that Tilray (NASDAQ: TLRY) just announced it was buying the majority of the outstanding senior secured convertible notes of MedMen that were originally held by Gotham Green. However, Tilray can’t remain on the Toronto Stock Exchange if it owns a U.S. cannabis company, so it can’t convert the shares until cannabis is federally legal. So,  MedMen and GGP amended the restrictive covenants and extended the debt maturity to 2028, and said claimed it was meant to give MedMen more time execute its strategy, but it also buys Tilray more time. Still, Gotham Green will continue to 0wn 9% of MedMen even after the sale and continue to have a board member.

Gotham has claimed that the pandemic among other things was the reason for the delays. In Florida, Gotham cited the Surfside condominium collapse as a reason as well as vacations.

New Lenders?

Back in 2020, iAnthus was in a cash crunch and convinced shareholders that the only way out was to let its lender take over. Now it seems other lenders are happy to step in and help. The case stated, ” the Company has received at least three unsolicited written offers (and multiple unsolicited telephonic expressions of interest) to recapitalize the Company, all of which would
provide for a full and immediate payment of all principal, interest and fees owing to the Lenders and meaningfully better terms for Existing Shareholders than the 2.75% equity interest
contemplated by the Recapitalization Transaction. The debt repayments contemplated by these offers would result in the Secured Lenders receiving a return on investment of over 15% and the Unsecured Debenture Holders receiving a return on investment of approximately 8%. In addition to the Lenders’ return on their debt instruments, the Secured Lenders and Unsecured Debenture Holders hold approximately 15.9 million warrants and 3.7 million warrants, respectively. ”

Hi-Med Loss

Hi-Med was one of iAnthus’ largest shareholders. It alleged in its case that an escrow account set up by iAnthus to cover interest payments was never tapped. Hi-Med also alleged that there was a conspiracy between iAnthus’ former CEO Hadley Ford and Gotham Green to trigger a default.  On April 6, 2020, iAnthus announced it had defaulted on $4.4 million in interest payments to the private equity firm Gotham Green Partners because of the coronavirus pandemic, as well as a decline in cannabis markets overall. The investors said there was an escrow of more than $5.7 million to pay one year’s interest on the 2018 debentures in the event of an iAnthus default. That agreement was amended in September to provide an additional $20 million to iAnthus, according to court documents.

The loss though hinged on the definition of the shares being traded. The investor’s case said that the iAnthus’ shares they bought are listed on the Canadian Stock Exchange and also trade in the U.S. on the OTCQX market. However, the Judge overseeing the case said that the OTC didn’t qualify as an exchange transaction. Still, Hi-Med was given until September 30 to file amended complaints.

iAnthus Gets Stronger

Since the cash crunch of 2019, iAnthus has continued to operate and get stronger by the quarter. iAnthus has reported $227 million in revenue (representing 110% growth) and positive adjusted EBITDA in the five publicly reported quarters since it defaulted in April 2020. Last month the company reported its financial results for the quarter ending June with revenue increasing 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.


Debra BorchardtJanuary 26, 2021


It’s a bombshell recording between former iAnthus Capital Holdings Inc. (OTC: ITHUF) Hadley Ford and an unidentified investor that has been leaked to the internet. A transcript was published online in which Ford candidly discusses the company’s dealings with its lenders Gotham Green Partners and Oasis Management. Green Market Report reached out to both companies for comment but has yet to receive a response. The most explosive exchange alleges that the lenders conspired to wipe out the unsuspecting shareholders. The stock was plunging another 30% to lately sell at 29 cents as it has also found itself mired in a lawsuit with MPX NJ, a class-action lawsuit, and a fight over the company’s recapitalization or bankruptcy plan.

Well, How Did We Get Here?

At the beginning of 2020, iAnthus was looking like it would become one of the top MSO’s (multi-state operators) in the business, and then the company unraveled in spectacular fashion. In 2019, iAnthus was delivering solid earnings, making acquisitions, and getting capital from Gotham Green Partners (GGP). It closed on its huge $835 million acquisition of MPX Bioceuticals, whose COO was Beth Stavola. The company also acquired Stavol’s CBD For Life brand and made her a board member. In January of 2020, the company completed its commitment to Stavola of $11 million. This raised eyebrows at the time as many believed the company should have restructured the payment or that Stavola as a board member and Chief Strategy Officer should have made it easier for the company to repay her. In hindsight, she was smart to get her money quickly before the company fell apart. Ford’s opinion of these actions are discussed on the call.

In April 2020, Ford abruptly resigned from the company after an investigation by the board’s special committee. The company’s President and Co-founder Randy Maslow was appointed as the interim CEO. The company formed a special committee to look into allegations made in an online media report that Hadley had misused company funds for his own benefit and that there was a conflict of interest. The committee determined that two of the allegations were substantiated and recommended further action.

According to a company statement, the Special Committee determined that Ford entered into two undisclosed loans (one loan for $100,000 with a related-party and the other for $60,000 with a non-arm’s length party) and those loans created a potential or apparent conflict and should have been disclosed to the board in a timely way. On The alleged call, Ford says he believed Stavola leaked the loan information because she wanted to become CEO of the company.

Stavola at the time said, “I look forward to working closely with Randy as interim CEO and the Special Committee as the Company explores strategic alternatives.” iAnthus initiated a Strategic Alternatives Review Process and has hired Canaccord Genuity Corp. as its financial advisor.

Recapitalization To Avoid Bankruptcy

In August 2020, iAnthus reported a staggering net loss of $237.3 million, which included a $199.4 million impairment loss. While the revenue rose 12% sequentially to $30.4 million, the net losses and defaulting on debt payments have overshadowed any good news. iAnthus said in its earnings statement that it did not make interest payments due on its Secured Notes and Unsecured Debentures due on March 31, 2020. “This non-payment of interest triggered an event of default with respect to these components of the Company’s long-term debt, consisting of principal amounts at face value of $97.5 million and $60.0 million and accrued interest amounts at March 31, 2020, of $3.2 million and $1.2 million on the Secured Notes and Unsecured Debentures, respectively.”

The company had an accumulated deficit of $622 million according to the filing. On July 10, the company entered into a Restructuring Support Agreement with some of its lenders. “If the Recapitalization Transaction is completed through CCAA Proceedings, then the Existing Shareholders (defined as the existing holders of Common Shares) will not receive a recovery.” In other words, the shareholders lose everything.


In addition to the Recapitalization plan, Stavola left the company. Since that time, Stavola has filed a lawsuit against iAnthus regarding MPX NJ.  In late 2020, MPX NJ sued iAnthus Capital Management and its New Jersey subsidiary. MPX is saying that iAnthus is improperly going after the operation of the Pleasantville Alternative Treatment Center by trying to negotiate with regulators. The judge ruled against iAnthus according to a story on The two companies have a shared lease for the dispensary, but MPX NJ is insisting that it is the company that was awarded the permit in 2018 and that the master services agreement that iAnthus cites as its authority, has not been approved by the New Jersey State of Health. iAnthus disputes the allegations of the Complaint and disputes that it ever engaged in the conduct that was the subject of the temporary restraints in the first place.

Oasis Management Debt

In addition to the money invested by GGP, Oasis Management stepped in with $25 million. In March 2020, Oasis began to complain publicly that iAnthus was in breach of the terms. This topic is discussed in detail on the call transcript with regards to Alex Shoghi, the contact at Oasis. Ford is quoted in the published transcript, which hasn’t been verified as saying:

So then we get to June of 2019 and I get this phone call from, uh, Alex Shoghi at Oasis saying, Oh, you’re in violation of your maintenance covenants. I’m like, what are you talking about? Well, the stock price is so low. Um, you know, you violated the maintenance component, so there are no maintenance covenants of the deal. Uh, there’s only a current test. And he said, nah, that’s not the way I read it. I don’t care how you read it. You and I negotiated the deal. We both know there’s no maintenance covenant. Like it’s not in any of my notes. It’s not in any of the language and any of the usual things. So yeah, he tried to stick us up for some better economics, but he had his lawyers involved and there wasn’t a maintenance covenant. So he went away.

Ford according to the call contact Adler at GGP to tell him what Shoghi was up to and Adler allegedly said he wouldn’t negotiate with terrorists and they should play hardball with Oasis. They felt that Oasis wanted better terms for his deal and that by threatening to take it public he could tank the stock price. Ford was very concerned according to the call that Shoghi was going to publish what he deemed were lies about the company. As it turned out, Shoghi did go public and the stock price dropped as expected.

The Phone Call

Initially, according to the phone call. GGP wasn’t too happy with Oasis and was on the side of iAnthus. iAnthus was trying to get more investment money from GGP and at first it seemed Adler was on board. GGP was going to invest $20 million, but then delays began to happen and the paperwork looked to be changing in GGP’s favor. Ford started to get concerned and began to look elsewhere to raise money as the $20 million dropped down to $15 million and investors were getting nervous about the Shoghi situation. As all of this is happening, the stock price continues to fall. Then it seems, Adler and GGP began to side with Oasis. Ford says on the alleged call:

 guys, you know, we got an interest payment in a week. You guys have said that you were going to forbear that, or, you know, push that off for us. I haven’t seen any paperwork. I need to get the paperwork. And Alex says, and Jason let’s Alex talk, And Alex says, oh, we’re happy to continue to have a conversation on forbearances but there’s nothing that I ask this to give us that would make them forbear. And then Jason says, I had a thought. More of a Gotahm led action. We’re going to take the company private. I’m like, well, that’s interesting. I said, you know, stocks low enough. Um, and I’ve got some ideas on that. You could, uh, offer a warrant and all these other things, and you could actually make it a very shareholder friendly, uh, going private transaction. You could have guys showing more than 1% roll into it and keep the cash need down. And the stock guys with less than that could get a long day warranted. Um, you know, give some upside when the company comes back public again, and there’s enough juice for everyone to make a lot of money.

And Jason says, well, actually had different concepts are going private. Um, uh, we’re going to take out, we’re going to wipe out the public shareholders and the junior guys, and then we’re going to recharge the management team.

At this point, Ford starts to think about the shareholders.

I’ve got a responsibility to the public shareholders. I agree to likehose the public shareholders and junior guys and enrich myself and Jason’s well, think about it. Don’t send any texts, don’t send any emails. Um, and, um, you know, we’ll talk about it. Um, and I went and spoke with our outside counsel, spoke with my board and they’re like, well, Gotham’s not your friend. And we said, okay, let’s go to the mattresses. You know, we got a lot of people already in the data room booking to, uh, finance this, we’ll hire an outside advisor, which ended up being canaccord to do kind of a strategic review. We will start to hoard cash. We’ll start to lay people off. we’ll stop all our spending. We won’t pay any interest. Um, and we’ll fight these bastrdds and there’s enough assets value here that will emerge successful.

By this time, iAnthus had approached Canaccord Genuity to help with raising money. According to the call, Ford supposedly gave names of wealthy individuals who could invest in the company, but he felt that Canaccord never pursued those options. The other unidentified person on the supposed call complained that Canaccord did receive bids for iAnthus, but never pass those offers along to the company. Had that been pursued, iAnthus shareholder value may have been saved.

More Shareholder Disrespect

The transcript of the supposed call is quite lengthy. While Ford mostly fights for the shareholders, it seems others in the company have no concern for those investors. Ford says at one point:

They’re saying, what’s my liability going forward or saying the board is not going to get rich on a shareholder friendly outcome.

And this:

 So the optimization was never about getting the best deal for the shareholders, although they will claim that, but I know the optimization was around getting something that looked prudent and thoughtful.

In Closing

Again, Green Market Report hasn’t verified the call, although New Cannabis Ventures wrote, ” We were able to confirm with the investor, who was aware that it had been leaked, that the recording is legitimate, though he claimed to have no involvement in sharing the information and had no intention for it to become public.”

With regards to the Recapitalization Plan, there is an appeal with respect to the Supreme Court of British Columbia’s final approval for the plan of arrangement to implement the Recapitalization Transaction, iAnthus confirmed that the appeal is scheduled to be heard on January 26, 2021. The submissions will be held virtually before a three-member panel of the British Columbia Court of Appeal. iAnthus considers the appeal to be without merit and intends to vigorously defend its interest in court.

In March of 2019, the stock traded at roughly $5.67. It is now trading at approximately 31 cents.

Debra BorchardtOctober 29, 2019


Following its earnings announcement on Monday after the close, MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) said that it was making certain amendments to its $250 million senior secured convertible credit facility arranged by Gotham Green Partners including changes to the company’s board. MedMen said it has agreed to form a committee to select new independent directors to be appointed or elected to the board, which directors would form a majority of the board. MedMen said it will propose director candidates to this committee for consideration and approval.

Changes To The Terms

MedMen said that the aggregate amount that remains available to be borrowed has not changed, but “In order to minimize dilution given the current capital market environment, both parties have agreed to amend the size of both Tranche 3 and Tranche 4, as well as the timing of Tranche 3. Tranche 3 now consists of $10 million in available credit and Tranche 4 consists of $115 million in available credit. The parties anticipate that Tranche 3 will be funded within 30 days instead of the originally proposed date in December 2019.”

The larger Tranch 4 will require the consent of both MedMen and Gotham Green under the Facility. Some of the reporting and financial covenants under the Facility have also been modified to provide MedMen with additional balance sheet flexibility. Changes in the covenants included a reduction in required minimum cash balances, removal of restrictions on equity issuances and an additional ability to spin-out or borrow against certain non-core assets, in addition to sales and indebtedness that were permitted prior to the amendment.

MedMen’s Deals With Gotham Green


In March of this year, MedMen signed a binding term sheet for a senior secured convertible credit facility of up to $250 million from funds managed by cannabis investor Gotham Green Partners.  MedMen said at the time that it thought this was the largest investment to date by a single investor in a publicly-traded cannabis company with U.S. operations. At that time, the stock was trading over C$4  on the CSE and $3 plus change on the OTC.


Then in July, MedMen went back to Gotham Green with participation from Wicklow Capital, agreed to an additional $30 million in an equity commitment to MedMen, bringing the total financing commitment to $280 million. To date, Gotham Green Partners had funded $100 million of the total commitment.

The terms were amended to reflect the drop in the company’s share price.  “Pursuant to Tranche 1 of the Facility will be changed from $3.29 to $2.55, which represents a 12% premium over the Company’s 20 trading day VWAP as of July 8, 2019.” In addition, Gotham Green Partners and Wicklow Capital have committed to a $30 million non-brokered financing of Subordinate Voting Shares at a price equal to $2.37 per share. The Equity Placement is conditional upon the satisfaction of customary conditions, including but not limited to the receipt of all necessary approvals. MedMen shares in July were trading at approximately $2.53.


One month later, the deal was amended again. In August, MedMen said that the conversion price was lowered to $2.55 for the first Tranche. The second Tranche conversion price was dropped to $2.17. The second Tranche was expected to be for $75 million and that has dropped to $50 million. “The gross proceeds from the Equity Placement together with the remaining financing commitment under the Facility total US$155 million.”

So, in August it was no longer a $250 million investment, but now it is back to being characterized as a $250 million investment.

Debra BorchardtSeptember 30, 2019


Gotham Green Partners has invested an additional $20 million in iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) through the purchase of senior secured convertible notes. Green Gotham said it was part of a broader $100 million financing plan to support the buildout of all existing markets in which iAnthus currently operates.

iAnthus has been building its market share at a rapid pace. Over the past 16 months, Chief Operating Officer Pat Tiernan said in a statement that the company currently has 27 open dispensaries, 11 of which have opened in the last ten months and the company is aggressively working to open another 12 in the next six months. Tiernan added, “We are growing in each of our markets and are one of the only MSOs that has meaningful revenue in multiple states, including ArizonaColoradoFloridaMarylandMassachusetts and Nevada, with strong same-store sales growth across our footprint.”

“We are pleased to be working with a leading financial investor in the U.S. cannabis sector. The new notes will allow us to build out operations in our key markets and continue to develop our retail and product brands,” said Hadley Ford, CEO of iAnthus.   “We believe this level of support from GGP will fully fund the development of our existing assets and provide the necessary capital for iAnthus to achieve positive and sustainable EBITDA and operational free cash flow in 2020.”


The notes have an annual coupon of 13%, payable quarterly, which will mature on May 14, 2021, subject to the iAnthus’ right to extend the maturity date by twelve months, and are exchangeable into common shares of the company at a conversion price of $1.89, which represents a 25% premium to the closing price of the common shares on Friday, September 27, 2019. The notes are being issued with $10 million of attached three-year warrants with an exercise price of $1.97.  Any additional notes will have substantially the same terms, including conversion price and warrant coverage, subject to compliance with the policies of the CSE. The note purchase agreement provides GGP the right to purchase additional notes of up to $66.5 million for a total of $86.5 million. The company may obtain an additional $13.5 million from potential financing sources, including GGP or others, to fulfill its $100.0 million plan, with any such additional financing subject to the negotiation of pricing, terms, and conditions in the context of the market.

“We have viewed iAnthus as a key partner since our initial investment in May 2018 and have closely watched the Company’s evolution as it has continued to execute on its operational strategy across multiple markets. The Company has made significant strides in broadening and operationalizing its footprint, which we do not believe is reflected in the Company’s current trading price,” said Jason Adler, Managing Member of Gotham Green Partners. “We look forward to working alongside iAnthus and continuing to support the growth of the Company.”


William SumnerJuly 10, 2019


It’s time for your Daily Hit of cannabis financial news for July 10, 2019.

On the Site

Canaccord Genuity Increases Its Long-Term Growth Outlook for U.S. Cannabis

Analysts with Canaccord Genuity (CG) have increased their 2019 to 2022 long-term growth outlook for the U.S. cannabis industry from 19% CAGR to 20%. According to the report, the modest increase was attributed primarily to increased expectations for Illinois’ adult-use market, as well as recent positive trends in the Nevada and Massachusetts market.

Gotham Green

Gotham Green Partners, with participation from Wicklow Capital, has agreed to an additional $30 million in an equity commitment to MedMen Enterprises Inc. (CSE:MMEN) (OTCQX:MMNFF), bringing the total financing commitment to $280 million. To date, Gotham Green Partners has funded $100 million of the total commitment.


KushCo Holdings, Inc. (OTCQX: KSHB) announced its financial results for the third quarter ending on May 31, 2019, after the market closed on Tuesday. Net revenue was $41.5 million, representing a quarter-over-quarter increase of 17.9%.On a GAAP basis, gross profit was 17.8%. On a GAAP basis, the net loss was $10.6 million, up from $9.2 million in the same period of the previous year.

Extractors Celebrate Their 710 Holiday – Dab Day

Extractors get their own holiday every year. July 10, also known as 7/10 has been fondly named “Dab Day” within the cannabis community. Spelling “OIL” when flipped upside-down, 7/10 is the day when cannabis concentrates and extracts are celebrated, and sales data is showing that cannabis consumers are eagerly participating in the celebration.

In Other News

GrowGeneration Corp.

GrowGeneration Corp. (OTCQX: GRWG) announced today that former Home Depot CEO, Bob Nardelli, will join the company as a strategic advisor, providing advice to the company’s CEO and Board of Directors on matters related to supply chain, merchandise, branding, distribution, new product introductions, pricing and channel selection. “Bob is a globally recognized business visionary.  He comes with a strong track record of executive operations to generate accelerated, profitable growth and shareholder value across many industry verticals that are of great interest to us,” said GrowGeneration CEO Darren Lampert.

Veritas Pharma

Veritas Pharma Inc. (CSE: VRT) (OTC: VRTHF) (Frankfurt: 2VP) announced that it has sold its 50% interest in 3 Carbon Extractions to Yari Nieken for $375,000. According to interim CEO Peter McFadden, the sale of its interest is part of the company’s wider restructuring efforts. “The sale of our interest in 3 Carbon was taken as part of the restructuring of the Company with aims to consolidate and focus the Company through assets that directly contribute to the advancement of our mission. Currently neither our research nor our operations aligned with our interest in 3 Carbon,” McFadden said.

Debra BorchardtMarch 22, 2019


MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF)  has signed a binding term sheet for a senior secured convertible credit facility of up to $250 million from funds managed by cannabis investor Gotham Green Partners.  MedMen said that it thinks this is the largest investment to date by a single investor in a publicly traded cannabis company with U.S. operations.

The investment from GGP will be in the form of convertible senior secured notes issued by MM CAN USA, Inc., a subsidiary of the company, totaling up to $250 million on a private placement. MedMen will receive the investment in three tranches assuming the company achieves certain price thresholds and other conditions. The first tranche is for $100 million, with the second tranche of $150 million delivered in two chunks of $75 million. That second investment will be made available at the six-month mark of the closing date and the third six months following the second.

“This strategic partnership with Gotham Green Partners represents another key milestone for MedMen and stems from our long-standing relationship with The Cronos Group and GGP’s brand portfolio,” said Adam Bierman, CEO of MedMen. “The growth capital will be used to operationalize the balance of our footprint and we look forward to creating further alignment with GGP and their global cannabis platform.”

The company said it plans to use the money from drawdowns on the facility for the following purposes:

  • Operationalize existing retail licenses, with a focus on Florida, where the Company is licensed for 30 stores
  • Integrate assets acquired through pending transactions, including those related to PharmaCann, LLC
  • Accelerate geographic expansion through bolt-on acquisitions and investments in core markets
  • Support national roll-out of higher-margin in-house branded products
  • Continue to invest in technology and digital infrastructure, with a focus on delivery and loyalty programs
  • Consolidate the supply chain and enhance margins by ramping up cultivation and production capabilities

“We continue to be impressed with MedMen’s industry-leading retail execution and iconic branding. With MedMen’s fortified balance sheet, the Company’s future has never been brighter,” said Jason Adler, managing member of GGP. “We feel fortunate to have the opportunity to take such a significant stake in MedMen and begin to work actively with the management team and the board to help the Company achieve its goals.”


The statement outlined how MedMen will pay back the investment:

All Notes will have a maturity date of 36 months from the closing date (“Maturity Date”), with a 12-month extension feature available to the Company on certain conditions, including payment of an extension fee. Notes will bear interest from their date of issue at LIBOR + 6.0% per annum. During the first 12 months, interest may be paid-in-kind at the company’s option such that any amount of PIK interest will be added to the outstanding principal of the Notes. The Company shall have the right after the first year, to prepay the outstanding principal amount of the Notes prior to maturity, in whole or in part, upon payment of 105% of the principal amount in the second year and 103% of the principal amount thereafter.

All or a portion of the Notes will be convertible, at the option of the holder, into class B subordinate voting shares of the company at any time prior to the close of business on the last business day immediately preceding the Maturity Date. The conversion price of each tranche of Notes is as follows:

i) for Tranche I Notes, the conversion price will be equal to 115% of the lesser of  (a) US$3.10, which represents the closing price of the Subordinate Voting Shares on the Canadian Securities Exchange on the trading day immediately preceding the announcement of the Facility, and (b) the closing price of the Subordinate Voting Shares on the trading day immediately preceding the closing date; and

ii) for Tranche II and Tranche III Notes, the conversion price will be equal to the lesser of (a) 115% of the 20 trading day volume weighted average trading price of the Subordinate Voting Shares as of the trading day immediately preceding the date of issue of such tranche, and (b) US$7.00.

The company may force the conversion of up to 75% of the then outstanding Notes at the applicable conversion price(s) if the volume weighted average trading price of the Subordinate Voting Shares (translated to US dollars) is US$8.00 for any 20 consecutive trading day period. If 75% of the then outstanding Notes are converted by the company, the term of the remaining 25% of the then outstanding Notes will be extended by 12 months.

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