Aleafia Health Inc. ALEAF AH has entered into an amendment to the terms of the loan agreement with NE SPC II LP dated as of December 24, 2021 and as previously amended by agreements dated March 28, 2022 and June 17, 2022.
While the original loan agreement provided that the indebtedness owed to NE SPC could be made payable on demand, NE SPC has agreed in the amendment to forbear on enforcing the loan agreement until the earlier of an event of default, or May 31, 2023. The amended terms also provide for additional circumstances that would constitute an event of default as well as additional covenants imposed on the company including an obligation to repay the entire balance owing under the loan agreement in certain circumstances. The company is currently in breach of certain financial covenants under the loan agreement.
In connection with the amendment, and in anticipation of the May 31, 2023 deadline, disinterested members of the company’s board of directors (the “committee”) have commenced a strategic review process to explore and evaluate potential strategic alternatives that may be available to the company with the goal of maximizing value for Aleafia Health shareholders and other stakeholders of the company. These alternatives may include, but are not limited to, the refinancing of the indebtedness under the loan agreement, a sale of all or a portion of the assets of the company, a sale of all or a portion of the common shares of the company, a business combination transaction, new debt or equity financings or refinancings, a strategic investment in the company or other strategic transaction structure.
The committee is leading the process and will manage any expressions of interest related to any potential transaction and will work with professional advisors to assess the fairness of any potential transaction to shareholders and other stakeholders and make recommendations to the board in respect of all such matters.
Price Action
Aleafia Health shares were trading 19.14% lower at $0.3 per share at the time of writing Thursday morning.
Photo: Benzinga edit with photos by Stefan Balaz on Shutterstock and Peter Pike on Pixabay
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