Gotham Green Partners, LLC Ceases to File Alternative Monthly Reports in Respect of iAnthus Capital Holdings, Inc.

SANTA MONICA, CA, July 14, 2020 /CNW/ - Gotham Green Partners, LLC ("Gotham") announces that it is ceasing to file reports in accordance with the alternative monthly reporting system under Part 4 of National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues ("NI 62-103") in respect of iAnthus Capital Holdings, Inc. ("iAnthus").

On July 13, 2020, iAnthus announced the entering into of a Restructuring Support Agreement (as defined below) with Gotham and all the other Secured Lenders (as defined below) and over 91% of the Unsecured Debentureholders (as defined below) (the "Initial Consenting Unsecured Debentureholders") to effect a proposed recapitalization transaction (the "Recapitalization Transaction").

Gotham and iAnthus currently anticipate that the Recapitalization Transaction will be implemented by way of a plan of arrangement described below.  As a result, Gotham may be disqualified from filing alternative monthly reports in accordance with Section 4.2(1)(b) of NI 62-103 because such plan of arrangement may result in Gotham having "effective control" of iAnthus.  Under Section 1.2 of NI 62-103, the ownership or control of voting securities carrying more than 30% of the votes attached to all of the outstanding voting securities is deemed to be "effective control" for the purpose of Section 4.2(1)(b) of NI 62-103.  Therefore, Gotham will file a Form 62-103F2 ? Required Disclosure by an Eligible Institutional Investor under Section 4.3 and cease to file alternative monthly reports in respect of iAnthus.

Details of Recapitalization Transaction

This news release provides only summary information with respect to the Recapitalization Transaction based on information that was provided by iAnthus in its news release issued on July 13, 2020.  Readers are urged to consult the full text of the iAnthus news release and also the Restructuring Support Agreement, a copy of which will be filed by iAnthus on SEDAR.

iAnthus entered into a restructuring support agreement (the "Restructuring Support Agreement") with 100% of its secured lenders (the "Secured Lenders") that are holders of the 13% senior secured convertible debentures (the "Secured Debentures") included in which are certain Funds (as defined below) affiliated with Gotham, and over 91% of other third party unsecured debentureholders (the "Unsecured Debentureholders") of the 8% convertible unsecured debentures issued by iAnthus (the "Unsecured Debentures") to effect the Recapitalization Transaction, as well as provide Interim Financing (as defined and more fully described below) of US$14 million to iAnthus Capital Management, LLC, a U.S. wholly-owned subsidiary of iAnthus ("iAnthus Subco").

Pursuant to the terms of the Restructuring Support Agreement, the Recapitalization Transaction will be implemented pursuant to arrangement proceedings commenced under the British Columbia Business Corporations Act ("Arrangement Proceedings") or, only if necessary, proceedings under the Companies' Creditors Arrangement Act ("CCAA Proceedings"). The Recapitalization Transaction, if consummated, is expected to have the following key elements:

• The Secured Debentures, after the completion of the Recapitalization Transaction, will be amended to (i) reduce the principal balance from US$97.5 million, plus accrued and unpaid interest and fees, to US$85 million, (ii) reduce the interest rate by 5% per annum; (iii) eliminate cash pay interest; (iv) extend the original maturity date by over four years and (v) remove the conversion feature;
• The US$60 million principal amount of Unsecured Debentures, plus accrued and unpaid interest and fees, will be exchanged and no longer be outstanding;
• iAnthus will issue an aggregate of US$20 million of preferred equity to the Secured Lenders (US$5 million) and Unsecured Debentureholders (US$15 million) with a maturity date of five years and no cash pay dividends (or other form of consideration on substantially similar economic terms);
• The Secured Lenders, on the one hand, and the Unsecured Debentureholders, on the other hand, will each be issued an equal amount of common shares of iAnthus ("Common Shares") such that each will own 48.625% of the Common Shares upon completion of the Recapitalization Transaction (50% each if completed through CCAA Proceedings), allocated pro rata among the holders thereof in accordance with the principal amount of the applicable debt held by each such holder prior to the closing time;
• Only if the Recapitalization Transaction is consummated through the Arrangement Proceedings, the existing holders at the time of completion (the "Existing Shareholders") of Common Shares will retain 2.75% of the ownership of the Common Shares (the "Common Shareholder Interest"). If the Recapitalization Transaction is completed through CCAA Proceedings, the Existing Shareholders will not receive a recovery and the Common Shareholder Interest will instead be allocated equally as among the Secured Lenders and Unsecured Debentureholders; and
• All existing options and warrants of iAnthus will be cancelled upon completion of the Recapitalization Transaction, and iAnthus anticipates allocating an amount of equity to be made available for management, employee, and director incentives.

Subject to compliance with the Restructuring Support Agreement, the Secured Lenders and Initial Consenting Unsecured Debentureholders will forbear from further exercising any rights or remedies in connection with any events of default of iAnthus now or hereafter occurring under their respective agreements and will stop any current or pending enforcement actions respecting same.

Interim Financing

In connection with the Recapitalization Transaction, certain Funds have agreed to provide interim cash financing of US$14 million (the "Interim Financing") to iAnthus SubCo, with a 5% original issue discount (i.e., the principal is to be grossed up to approximately US$14.7 million), which is expected to be funded to iAnthus SubCo within three business days of execution of the Restructuring Support Agreement. If the Recapitalization Transaction is pursued pursuant to the CCAA Proceedings, up to an additional US$1 million of Interim Financing, or more, may be obtained from the Secured Lenders.

Requisite Approvals

Completion of the Recapitalization Transaction through the Arrangement Proceedings will be subject to, among other things, requisite stakeholder approval of the plan of arrangement at meetings expected to be held in September 2020, such other approvals as may be required by the Supreme Court of British Columbia (the "Court"), approval of the Arrangement Proceedings by the Court and the receipt of all necessary regulatory and stock exchange approvals (collectively, the "Requisite Approvals"). If the Requisite Approvals are obtained, the plan of arrangement will bind all Secured Lenders, Unsecured Debentureholders and Existing Shareholders.

Interest in Securities of iAnthus

Gotham is an eligible institutional investor and, together with the Funds as joint actors, has ownership and control over Common Shares, senior secured notes of iAnthus Subco (the "Notes"), exchange warrants exercisable to effect the exchange of the outstanding principal amount of Notes for Common Shares ("Exchange Warrants") and share purchase warrants exercisable for Common Shares ("Warrants").

As previously reported by Gotham on January 10, 2020 in a report in Form 62-103F3, as of December 31, 2019 Gotham, on behalf of the following funds managed by Gotham: Gotham Green Fund 1, L.P., Gotham Green Fund 1 (Q), L.P., Gotham Green Fund II, L.P., Gotham Green Fund II (Q), L.P., Gotham Green Credit Partners SPV 1, L.P. and Gotham Green Partners SPV V, L.P. (together the "Funds"), had control and direction over 59,533,374 Common Shares of iAnthus, representing 26.219% of all of the issued and outstanding shares of iAnthus calculated on a partially-diluted basis assuming the exercise of all Warrants held by the Funds, including the Exchange Warrants exercisable to effect the exchange of the principal amount of Notes.

Gotham has not acquired or disposed of any securities of iAnthus since December 31, 2019.

If the Recapitalization Transaction is consummated in accordance with the Restructuring Support Agreement, the Funds may hold up to 2,563,186,824 Common Shares of iAnthus, and no securities convertible into Common Shares, representing up to 42.2% of the Common Shares anticipated to be outstanding on the consummation of the Recapitalization Transaction.

Other Matters

The Funds together have the right to appoint up to two of their representatives as non-voting observers to iAnthus' board of directors.  In addition to the foregoing, iAnthus agreed that it will appoint a qualified person nominated by the Funds to its board of directors. Such appointment is subject to regulatory approval and the Funds' nominee filing and clearing a personal information form with the Canadian Securities Exchange.

Upon implementation of the Recapitalization Transaction, the board of directors (the "New Board") will be constituted as follows: (i) three nominees by the Secured Lenders; (ii) three nominees by the Initial Consenting Unsecured Debentureholders; and (iii) a new CEO as the seventh member of the New Board, to be agreed upon by the Secured Lenders' and Initial Consenting Unsecured Debentureholders' nominees.

Gotham intends to enter into a shareholder or voting agreement with iAnthus and the Unsecured Debentureholders effective as of the date of the closing of the Recapitalization Transaction setting forth corporate governance matters including the nomination rights above, certain voting requirements and an agreement that the Secured Lenders may not vote in aggregate more than 35.78% of the issued and outstanding Common Shares for a period of three years.

Gotham will receive from one of the Secured Lenders a portion of the gross profit received by such Secured Lender as a result of its investment in the Notes and Warrants.

About Gotham Green Partners

Gotham Green Partners, LLC is a New York and California-based private equity firm focused on deploying capital into cannabis and cannabis-related enterprises on a global scale.  The firm manages a diversified portfolio of investments and is actively investing across the cannabis value chain.

The address of Gotham is 1437 4th Street, Suite 200, Santa Monica, California, 90401 U.S.A.

For Further Information

A report on Form 62-103F2 ? Required Disclosure by an Eligible Institutional Investor under Section 4.3 is being filed by Gotham in accordance with NI 62-103 and will be available under iAnthus' profile at www.sedar.com.  The head office of iAnthus is 505 Fifth Avenue, 23rd Floor, New York, New York, 10017 U.S.A.

SOURCE Gotham Green Partners, LLC