4Front Ventures Secures Credit Agreement, Issues RSUs

PHOENIX — 4Front Ventures Corp., a prominent multi-state cannabis operator and retailer, declared on [Date] the issuance of restricted stock units (RSUs) linked to its newly established $10-million senior secured credit facility agreement.

The Phoenix-based establishment confirmed it would issue a notable 15.9 million RSUs to ALT Debt II, LP, a recognized affiliate of Altmore Capital. These RSUs, as outlined in the detailed agreement, are primed for conversion into a Class A subordinate voting share of the corporation once specific predetermined conditions are met.

The specified issuance price for these RSUs stands approximately at 25 cents. Should there be a scenario during a Distribution Event where the Shares related to the RSUs decline below the benchmark of 2.12% of the company’s fully diluted Shares, there is a provision. To rectify this, 4Front Ventures will issue further RSUs to ALT Debt II, LP, thus compensating for the discrepancy. Every additional RSU will be determined by the closing market price the day prior to issuance on the Canadian Securities Exchange.

Diving deeper into the company’s recent fiscal maneuvers, 4Front Ventures has undertaken the restructuring of a convertible promissory note. This note was originally agreed upon with partners such as Navy Capital Green Fund, Navy Capital Green Co-Invest Fund LLC, and HI 4Front LLC, with the agreement dated Oct. 6, 2021.

Newly negotiated terms highlight the deferment of payment obligations. Previously set for Oct. 6, 2023, the payment date now extends to Oct. 6, 2024. Furthermore, a revision in the interest rate was made evident, transitioning from 6% to a heightened 10%, with the calculation based on simple interest annually. In another significant change, the conversion price underwent an adjustment from its original $1.03 to the revised rate of 23 cents per Class A subordinate voting share, as unveiled in a recent press release.

As the cannabis industry continues to navigate its fiscal and regulatory landscape, companies like 4Front Ventures are constantly adapting and employing innovative financial mechanisms to stay competitive and sustainable. This recent move is a testament to the ongoing evolution and resilience of the sector.