On August 26, 2019, iAnthus New Jersey, LLC (INJ) entered into a
financing, leasing, licensing and services agreement (the NJ Agreement) with MPX New Jersey, LLC (MPX NJ), which is subject to regulatory approval by the New Jersey Cannabis Regulatory Commission (the
CRC) pursuant to which INJ would provide MPX NJ with financial planning services, vendor management services, regulatory guidance and financing for working capital, among other services. Pursuant to the terms of the NJ Agreement,
on October 24, 2019, INJ entered into a loan agreement with MPX NJ pursuant to which INJ would loan to MPX NJ, from time to time, up to an aggregate of $10.0 million, which may be increased by unlimited $1.0 million tranches, subject
to certain conditions. Furthermore, INJ may advance up to an additional $5.0 million to MPX NJ in its sole discretion. Outstanding loans were to mature on December 31, 2021 and bear interest at a rate of 16% per year, subject to adjustment
in the event of default. In connection with the Loan Agreement, on October 16, 2019, MPX NJ issued INJ a convertible promissory note (the INJ Note) in the principal amount of up to $10.0 million. The principal amount of
the INJ Note together with any interest accrued thereon was convertible into such number of Class A units of MPX NJ equal to a 99% equity interest in MPX NJ on a fully diluted basis. In addition, on October 24, 2019, INJ entered into an
option agreement (the Option Agreement) with MPX NJ pursuant to which INJ acquired an option to acquire all of the units of MPX NJ for $1,000. Elizabeth Stavola, our former Chief Strategy Officer and former member of our Board was
the former Chief Executive Officer and majority owner of MPX NJ. On February 3, 2021, INJ sent a notice of conversion to MPX NJ pursuant to the Loan Agreement, notifying MPX NJ of INJs election to exercise its right to convert the entire
principal amount outstanding, plus all accrued and unpaid interest thereon, into a number of Class A units of MPX NJ representing 99% equity interest in MPX NJ. The conversion of INJs debt to equity was subject to approval by the CRC. In
addition, on February 25, 2021, INJ sent to MPX NJ and the current equityholders of MPX NJ a notice of election, notifying MPX NJ and its current equityholders of INJs election to exercise its purchase option pursuant to the Option
Agreement. On January 7, 2022, the CRC approved INJs acquisition of all of the units of MPX NJ, and on February 1, 2022, INJ closed the acquisition of MPX NJ, resulting in INJ owning 100% of the equity interests of MPX NJ. As of
December 31, 2021 and 2020, the outstanding balance of the loan facility including accrued interest was $4.6 million and $3.2 million, respectively.
Our former Chief Executive Officers sister was the Vermont Advisor Executive to iAnthus Capital Management, LLC. As of December 31,
2021 and 2020, we paid her $0.1 million and $0.1 million, respectively.
During the year ended December 31, 2019, funds
affiliated with Gotham Green Partners, LLC (collectively, GGP) invested an aggregate amount of $37.15 million through the purchase of Senior Convertible Notes. During the year ended December 31, 2019, Parallax Master
Fund, L.P. invested an aggregate amount of $15 million through the purchase of Secured Convertible Notes. During the year ended December 31, 2020, GGP invested a further $14.7 million through the Interim Financing. As of
December 31, 2021, the outstanding principal amount of the Secured Convertible Notes was $97.5 million plus accrued interest and fees thereon (December 31, 2020 -$97.5 million in principal amount plus accrued interest and fees
thereon). In connection with the Recapitalization Transaction, these Secured Convertible Notes were forgiven in part and, along with the Interim Financing, exchanged for June Secured Debentures, June Unsecured Debentures, and Shares. See
The Recapitalization Transaction above.
During the year ended December 31, 2019,
Hi-Med invested $5.0 million through the purchase of Unsecured Convertible Debentures. As of December 31, 2021, the outstanding balance of the Unsecured Convertible Debentures was $60.0 million
plus accrued interest (December 31, 2020$60.0 million plus accrued interest). In connection with the Recapitalization Transaction, these Unsecured Convertible Debentures were forgiven in part and exchanged for June Unsecured Debentures
and Shares. See The Recapitalization Transaction above.
SHAREHOLDER PROPOSALS FOR 2023 ANNUAL GENERAL MEETING
Our Annual General Meeting of Shareholders generally is expected to be held by the end of June of each year.
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