Aleafia Health Hits Record $43.1M Net Revenue In 2022 15-Month Fiscal Year, Closes Debenture Amendment Transaction

Aleafia Health Inc. ALEAF AH revenue for the 12 months period ending March 31, 2022 was $46.3 million compared to $30.08 million in the12 month period ending March 31, 2021. The fiscal year was changed to end on March 31.

Financial Highlights For the 12 Months Ending March 31, 2022

  • Net Revenue was $36.05 million compared to $28.74 million in the 12 month period ending March 31, 2021.

  • Total gross profit was $4.3 million compared to $11.91 million in 2021.

  • Adjusted EBITDA was a loss of $18.97 million compared to a loss of $5.88 million in 2021

Quarter Ended March 31 2022 (“Q5”)

  • Net Revenue was $7.04 million compared to $7.06 million in the same period of 2021.

  • Total gross profit was $933,000 compared to $3,28 million in the same period of 2021.

  • Adjusted EBITDA was a loss of $4.41 million compared to a loss of $3.03 million in the same period of 2021

Closing of Debenture Amendment Transaction

The company has closed its amendment of its unsecured convertible debentures.

“We are delighted we have now completed this transaction,” stated Tricia Symmes Aleafia Health’s CEO. “We want to thank all those who participated for demonstrating their confidence in the company’s future. Coupled with the closing of the $5.6 million private placement announced last week, the company is now much better positioned to execute on its ambitious growth plans in all key segments of its business: adult-use, medical and international.”

The debenture amendments were effected by the exchange of the outstanding $37,05 million principal amount of unsecured convertible debentures for new, secured convertible debentures, which were issued to existing debenture holders in three equal, separate series: 8.50% series A secured debentures due June 30, 2024, 8.50% series B secured debentures due June 30, 2026 and 8.50% series C secured convertible debentures due June 30, 2028.

As previously disclosed, the interest rate will remain at 8.5%, but there is no mandatory cash interest payment for between 24 and 30 months as interest will initially be paid-in-kind with additional new debentures reducing near-term debt servicing requirements.

In addition, an aggregate of approximately $2.4 million principal amount of series C debentures were issued in payment of the consent fee payable to debenture holders who consented in favor of the extraordinary resolution approving the debenture amendments, which consent fee is subject to withholding for non-residents of Canada.

The new debentures were issued on a private placement basis and are subject to a statutory hold period of four months and one day commencing on the date of issuance of the new debentures in accordance with applicable Canadian securities laws. The new debentures will bear a legend reflecting the foregoing restriction on resale. The company has applied to list each series of the new debentures on the Toronto Stock Exchange, and such listing is expected to occur following the expiration of the statutory hold period, subject to the satisfaction by the company of customary listing conditions.

The new debentures are secured against certain assets of the company, but are fully subordinated to the company’s existing senior secured debt. The company is not entitled to incur further senior secured indebtedness, subject to certain exceptions including to fund working capital, capital expenditures, and strategically accretive acquisitions.

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