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CLS Restructures Debt, Lowers Borrowing Costs, and Reduces Shares Outstanding

CLS Holdings is a vertically integrated operator founded in 2015 in Nevada. The company operates its Oasis dispensary in downtown Las Vegas and has obtained a conditional cannabis consumption lounge permit, with plans to launch in 2024. City Trees is CLS’ extraction and manufacturing business. Products are sold in its Oasis dispensary and through 71 other retail locations in Nevada. City Trees makes cartridges, disposables, dab applicators, custom-blended tinctures, and craft concentrates. CLS has been taking steps to improve its balance sheet. On Monday, the company announced a debt restructuring that will lower borrowing costs, extend the payment period, and reduce the number of shares outstanding. The company retired a total of $1,526,250 in principal and interest repayment obligations owed. This was achieved through the repurchase of $1,200,000 in principal amount of 15% debentures, with interest forgiven in the amount of $326,250. CLS reduced the number of shares outstanding, acquiring 13,274,780 shares previously held by the debenture holder. This results in a reduction of shares outstanding from 137,675,276 to 124,400,496. The debt retirement and share repurchase was financed through a series of four loans totaling $1,350,000 with a 12% interest rate, payable monthly over 24 months. This is a material reduction in the interest rate and a meaningful extension of the duration for payment over the repurchased notes. CEO Andrew Glashow shared his thoughts on the announcement. “One of my main goals since becoming CEO was to reduce and restructure our debt. This is another significant step forward. Our borrowing costs have also been reduced by 850 basis points. The transaction is substantially accretive to our shareholders as it eliminates 9.5% of the issued and outstanding shares.” Investors can learn more about the company by visiting /investors. Accessible link in our full report.