Heritage Cannabis Announces Strategic Re-financing with $7.0 Million Senior Secured Term Loan
Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF) (“Heritage” or the “Company”), today announced that it has entered into an 18 month non-revolving loan agreement (the “Loan Agreement”) with BJK Holdings Ltd. (“BJK”) in the amount of $7.0 million (the “Loan”). Pursuant to the Loan Agreement, BLK advanced the Company $7.0 million on April 1, 2021 (the “Closing Date”).
The Loan is payable in full upon maturity of the Loan, 18 months following the Closing Date, with monthly interest only payments made based on the outstanding balance of the Loan, calculated monthly, in arrears. Monthly interest will be calculated at the Royal Bank of Canada prime lending rate plus 1.25%. A one-time setup fee of $965,000 is due to BJK on the Closing Date. The Loan may be prepaid in full at any time without penalty.
A portion of the proceeds from the Loan was used to repay all of the Company’s credit facility obligations to Trichome Financial Corp. (“Trichome Credit Facility”) which was set to mature on January 30, 2022. The total payout to retire the Trichome Credit Facility was approximately $4.7 million and includes accrued interest, voluntary prepayment fees, and closing fees.
“With our positive long-term financial outlook, we are extremely pleased to be in a position to secure capital that increases our flexibility to grow our business internationally as a result of the improved terms over our prior loan arrangement and at the same time extends our re-payment date to October 2022 from January 2022,” commented Clint Sharples, CEO of Heritage. “In combination with our recent equity financing, we have strengthened our financial position and are poised for our product launches in the U.S. market. This new financing furthers our flexibility to execute our international strategy and allows for growth in a controlled but faster pace.”
“We have been following Heritage and their subsidiary Premium 5 for some time now and are excited to become their lending partner given that they are well on their way to establishing the Company as a leader in the cannabis extract and extract derivatives space,” commented David Thiessen of BJK. “We are confident in their ability to execute on their strategy and look forward to being a strong supporter and helping them as they expand their domestic presence internationally.”