Nova Leap Health (TSXV: NLH) began the process of cleaning up its balance sheet this morning. The company has announced that it is forcing the conversion of certain outstanding 8% convertible debentures that are due December 30, 2024.

The conversion is being conducted via a clause included in the indenture, whereby the company can force the early conversion of the debt in the event that the company trades above $0.78 per share for 20 consecutive days on a volume weighted basis. As a result, $2.2 million in debt is to be converted into common shares of the issuer at a price of $0.52 per share.

The forced conversion reportedly follows $0.2 million in debentures voluntarily converting previously.

The conversion effectively cleans up a large portion of the firms current long-term liabilities, which as of September 30, 2020, amounted to $3.0 million in total. Long term debt now only appears to consist of a $0.2 million promissory note that it is outstanding. The company however does have a demand loan outstanding for $2.4 million that is marked as current as a result of the terms contained within.

Nova Leap Health last traded at $0.80 on the TSX Venture.

Information for this briefing was found via Sedar and Nova Leap Health. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.