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Multistate cannabis operator 4Front Ventures Corp. hired a new CEO and plans to convert $23 million worth of its senior secured debt into equity.
Approximately 44% of the company’s senior secured debt will be converted into subordinate voting shares at a price of 0.125 Canadian dollars ($0.094) per share, according to a news release published Monday.
Phoenix, Arizona-based 4Front also is providing 15% warrant coverage at an exercise price of CA$0.144, with each warrant exercisable for one subordinate voting share over a period of three years.
The remaining $28.7 million loan will stay unchanged, with a 12% interest rate.
The amendment is subject to approvals.
Meanwhile, 4Front announced Andrew Thut as its new CEO, effective Jan. 8.
Thut previously was the company’s CFO; before that, he served as 4Front’s chief investment officer, according to LinkedIn.
He succeeds Leo Gontmakher, who served as CEO since May 30, 2020.
Gontmakher will remain on the company’s board of directors.
4Front borrowed $10 million to invest in its Illinois operations last November; the company also operates in Massachusetts and Washington.
“Our latest actions demonstrate a commitment to transforming our balance sheet, safeguarding the financial health of the company and focusing on long-term growth, where we are still bullish on our ability to double the revenue of our company over the next 12-18 months in Illinois alone,” Thut said in a statement announcing his new role.
4Front Ventures trades on the Canadian Securities Exchange as FFNT.