High Tide Extends Maturity Date and Reduces Interest Rate of Convertible Debt with Strategic Partner

Rhea-AI Summary

High Tide Inc. (OTCQB: HITIF) announced an agreement to extend the maturity of its $2 million convertible debenture from April 18, 2021, to April 18, 2023, while reducing the interest rate from 10.0% to 7.0%. The conversion price remains at $0.75. This strategic change follows similar agreements with four lenders involving $42 million in total facilities. Recently, High Tide generated $13.4 million in EBITDA over the past four quarters, with $4.6 million in the fiscal first quarter ending January 31, 2021. The company holds a cash balance of approximately $33 million.

Positive

• Successful agreement to extend convertible debenture maturity and lower interest.
• Recent EBITDA of $13.4 million demonstrates financial growth.
• Cash balance of approximately $33 million allows for future investments.

Negative

• None.

CALGARY, AB, April 8, 2021 /PRNewswire/ - High Tide Inc. ("High Tide" or the "Company") (TSXV: HITI) (OTCQB: HITIF) (FRA: 2LY), a retail-focused cannabis corporation enhanced by the manufacturing and distribution of consumption accessories, announced today that it has reached an agreement with a strategic investor to extend the maturity of its $2,000,000 convertible debenture and reduce the applicable interest rate pursuant to a debenture amendment agreement (the "Debenture Amendment Agreement"). The Debenture Amendment Agreement extends the maturity date of the convertible debenture from April 18, 2021, to April 18, 2023, and reduces the applicable interest rate from 10.0% to 7.0%. The conversion price of $0.75 remains unchanged.  The Debenture Amendment Agreement remains subject to approval from the TSX Venture Exchange.

"I am very pleased to report that this strategic partner has agreed to extend this debenture," said Raj Grover, President & Chief Executive Officer of High Tide. "During the past nine months, we have now announced that four lenders to High Tide have agreed to extend the maturity of their debt by more than one year and simultaneously cut the applicable interest rate – and this encompasses $42 million in total facilities. Over the past four quarters we have generated $13.4 million in EBITDA. Specifically, during our fiscal first quarter ended January 31, 2021, we reported $4.6 million in EBITDA, and positive cash flows from operations before working capital of $3.5 million.  It is clear that our lenders have realized that this is not the same company they lent to some time ago in terms of risk profile, and many are willing to extend maturity and adjust terms in our favour as a result.  With a current cash balance of approximately $33 million, we clearly had enough cash on hand to retire the debt we agreed to extend today; however, given the strategic nature of this partner, we mutually preferred to have them remain on our cap table."

About High Tide Inc.

High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of consumption accessories. The Company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 81 branded retail locations spanning Ontario, Alberta, Manitoba and Saskatchewan. High Tide's retail segment features the Canna Cabana, KushBar, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf Cannabis banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its numerous consumption accessory businesses including e-commerce platforms Grasscity.com, Smokecartel.com and CBDcity.com, and its wholesale distribution division under Valiant Distribution, including the licensed entertainment product manufacturer Famous Brandz. High Tide's strategy as a parent company is to extend and strengthen its integrated value chain, while providing a complete customer experience and maximizing shareholder value. Key industry investors in High Tide include Aphria Inc. (TSX:APHA) (NYSE:APHA) and Aurora Cannabis Inc. (NYSE:ACB) (TSX:ACB).

Neither the TSX Venture Exchange (the "TSXV") nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this news release are forward-looking information or forward-looking statements. Such information and statements, referred to herein as "forward-looking statements" are made as of the date of this news release or as of the date of the effective date of information described in this news release, as applicable. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (generally, forward-looking statements can be identified by use of words such as "outlook", "expects", "intend", "forecasts", "anticipates", "plans", "projects", "estimates", "envisages, "assumes", "needs", "strategy", "goals", "objectives", or variations thereof, or stating that certain actions, events or results "may", "can", "could", "would", "might", or "will" be taken, occur or be achieved, or the negative of any of these terms or similar expressions, and other similar terminology) are not statements of historical fact and may be forward-looking statements.

Such forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to the ability of High Tide to execute on its business plan and that High Tide will receive one or multiple licenses from Alberta Gaming, Liquor & Cannabis, British Columbia's Liquor Distribution Branch, Liquor, Gaming and Cannabis Authority of Manitoba, Alcohol and Gaming Commission of Ontario or the Saskatchewan Liquor and Gaming Authority permitting it to carry on its Canna Cabana Inc. and KushBar Inc. businesses. High Tide considers these assumptions to be reasonable in the circumstances. However, there can be no assurance that any one or more of the government, industry, market, operational or financial targets as set out herein will be achieved. Inherent in the forward-looking statements are known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements, or industry results, to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements.

The forward–looking statements contained herein are current as of the date of this news release. Except as required by law, High Tide does not have any obligation to advise any person if it becomes aware of any inaccuracy in or omission from any forward-looking statement, nor does it intend, or assume any obligation, to update or revise these forward-looking statements to reflect new events or circumstances. Any and all forward-looking statements included in this news release are expressly qualified by this cautionary statement, and except as otherwise indicated, are made as of the date of this news release.

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SOURCE High Tide Inc.

FAQ

What is the maturity date extension for High Tide's convertible debenture?

High Tide extended the maturity date of its convertible debenture from April 18, 2021, to April 18, 2023.

What is the new interest rate for High Tide's convertible debenture?

The interest rate for High Tide's convertible debenture has been reduced from 10.0% to 7.0%.

How much cash does High Tide currently have?

High Tide has a current cash balance of approximately $33 million.

What financial performance did High Tide report recently?

High Tide generated $13.4 million in EBITDA over the past four quarters, with $4.6 million reported in the fiscal first quarter ended January 31, 2021.

What is the stock symbol for High Tide?

The stock symbol for High Tide is HITIF.