Cannabis company Vireo Growth Inc. (formerly Goodness Growth Holdings, Inc.) (CSE:VREO) (OTCQX:VREOF) reported Thursday that it has extended its credit facility with Chicago Atlantic. Additionally, Chicago Atlantic decided to convert all its convertible notes into equity shares.
The Minnesota-based company extended the due date for its loans to January 29, 2027.
Vireo postponed sale deadline of its New York operations to July 31, 2025. The company will issue 12.5 million subordinate voting shares to the lenders in consideration for the credit facility amendment.
"It's not been an easy path for us, but I'm incredibly pleased with our team and I'm appreciative of the collaborative approach Chicago Atlantic has taken to working with us to establish a more stable foundation from which to build," stated Josh Rosen chief executive officer of Vireo. "As our team knows, we have much work left to do and while this announcement feels good and represents a meaningful step forward, we're focused on realizing our potential to capitalize on the opportunities in front of us with prudent capital allocation, investing in and trusting our talent, and executing our CREAM and Fire strategy. This industry gets more competitive every day which means we must keep improving on a daily basis."
Read Also: Jushi Cuts $53M Debt With New $48M Loan, Now Holds Less Than $1M In Short-Term Debt
Voluntary Conversion Of All Outstanding Convertible Notes
Chicago Atlantic notified the Ccompany of its intent to voluntarily convert all of the outstanding convertible notes issued in connection with its April 2023 convertible loan financing. The $10.5 million loan carries an interest rate of 12.0%, and could be converted into shares at a price of $0.145 per share. As a result of the conversion, Vireo will issue approximately 73.0 million shares to Chicago Atlantic and its affiliates.
The early, voluntary conversion of all outstanding convertible notes is expected to result in interest expense savings of approximately $1.2 million and PIK interest savings of approximately $1.1 million which would have resulted in the issuance of an additional approximately 7.7 million subordinate voting shares if the debt had been converted at maturity.
Managing partner of Chicago Atlantic, Peter Sack commented, "With the substantial improvements in Vireo's underlying operational and financial performance over the past eighteen months, as well as the upcoming implementation of adult-use sales in Minnesota, we are excited to support the Company's ongoing initiatives to strengthen its business."
Price Action
Vireo Growth shares traded 10.7% higher at 47 cents per share.
- Scotts Miracle-Gro's Cannabis-Focused Subsidiary Reports 28% YoY Drop In Q3 Net Sales, Reaffirms 2024 Outlook
Photo: Courtesy of Plateresca via Shutterstock