Net revenue

Aleafia Health Achieves Record Net Revenues of $43.1 Million in 15-Month Fiscal Year 2022 and Closes Debenture Amendment Transaction

Aleafia Health Inc. LEAF Oh revenue for the 12-month period ending March 31, 2022 was $46.3 million compared to $30.08 million in the 12-month period ending March 31, 2021. Fiscal year has been changed to March 31.

Financial Highlights for the 12 months ending March 31, 2022

  • Net income was $36.05 million compared to $28.74 million during 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 for the same period of 2021.

  • Total gross profit was $933,000 compared to $3.28 million for 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 the Debenture Amendment Transaction

The company closed its modification of its unsecured convertible debentures.

“We are delighted to have now completed this transaction,” said Tricia Symme CEO of Aleafia Health. “We would like to thank everyone who participated for demonstrating their confidence in the future of the company. 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 across all key segments of its business: adult, medical and international.

The debenture amendments were effected by exchanging the outstanding principal amount of $37.05 million of unsecured convertible debentures for new secured convertible debentures, which were issued to existing debentureholders in three separate equal series: debentures 8.50% Series A Secured Debentures due June 8.50% Series B Secured Debentures due June 30, 2026 and 8.50% Series C Secured Convertible Debentures due June 30, 2028.

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

In addition, approximately $2.4 million aggregate principal amount of Series C Debentures was issued in payment of consent fees payable to debentureholders who consented in favor of the extraordinary resolution approving the amendments to the debentures, which Consent fees are subject to withholding for non-residents of Canada.

The New Debentures were issued pursuant to a private placement and are subject to a statutory hold period of four months and one day from the date of issuance of the New Debentures in accordance with applicable Canadian securities laws. The new debentures will bear a legend reflecting the above restriction on resale. The Company has applied to list each series of New Debentures on the Toronto Stock Exchange, and such listing is expected to occur after the expiration of the legal hold period, subject to the Company’s satisfaction of customary listing conditions.

The New Debentures are secured by certain assets of the Company, but are fully subordinated to the Company’s existing senior secured debt. The Company is not permitted to incur additional senior secured debt, subject to certain exceptions, including to fund working capital, capital expenditures and strategically accretive acquisitions.

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