Convertible Notes |
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| Convertible Notes | 12. Convertible Notes On July 7, 2025, the Company retired the existing convertible notes, and issued a $10,000,000 convertible note (the “New Convertible Notes”) to Chicago Atlantic Opportunity Finance, LLC, also with a second priority interest, that matures on October 2, 2028 with an option to extend for an additional year subject to a 1% extension fee of all Chicago Atlantic loans advanced, has a cash interest rate of the (subject to a 7.5% floor) plus 5.0% per year, and is convertible into that number of the Company’s subordinate voting shares determined by dividing (i) the sum of (A) the result of $10,000,000 minus 50.00% of the aggregate amount of all the New Convertible Notes repaid plus (B) all accrued but unpaid interest on the New Convertible Notes on the date of such conversion by (ii) a conversion price equal to $18.75. In connection with the Bridgewell Acquisition (Note 3), the Company issued the Bridgewell Convertible Notes to the Bridgewell Sellers on June 5, 2026, with an aggregate principal amount of approximately $13.7 million and a fair value of $14.3 million. The Bridgewell Convertible Notes bear interest at a rate of 3.85% per annum and mature five years from the date of issuance. The Bridgewell Convertible Notes are not convertible prior to the second anniversary of issuance. On or after the second anniversary, the Bridgewell Convertible Notes are convertible, at the option of the Bridgewell Sellers, into an aggregate estimated 734,551 subordinate voting shares of the Company at a deemed conversion price of $18.60 per share, subject to final adjustment in accordance with the terms of the Bridgewell SPA and applicable CSE policies. All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan. As of each of June 30, 2026 and December 31, 2025, $0 deferred financing costs remained unamortized, respectively. The following table shows a summary of the Company’s convertible debt as of June 30, 2026 and December 31, 2025:
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