Aleafia Health announces amendment to its loan agreement

Aleafia Health Inc. ALEAF AH has entered into an amendment to the terms of the loan agreement, 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 amendments also provide 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 owed under the loan agreement in certain circumstances. The company is currently in breach of some financial covenants under the loan agreement.

In addition to the amendment, and in preparation for the May 31, 2023 deadline, disinterested members of the company s board of directors have commenced a strategic review process to explore and evaluate potential strategic alternatives that may be available to the company with the aim of maximizing value for Aleafia Health shareholders and other stakeholders of the company. These alternatives may include the refinancing of the indebtedness under the loan agreement, a sale of all or a portion of the assets of the company, a transaction 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 interest expressed 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.

Aleafia Health shares were trading 1914% lower at $0.3 a share at the time of writing Thursday.

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