Heritage Cannabis Enters into Note and Warrant Purchase Agreement with Merida Capital
Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF) (“Heritage” or the “Company”), today announced that further to its press release of September 13, 2021 regarding its term sheet with Merida Capital Partners III LP (“Merida Fund III”) and Merida Capital Partners IV LP (“Merida Fund IV”) to fund the Company’s entry into the state of Missouri, it has entered into a Note and Warrant Purchase Agreement, dated October 18, 2021, pursuant to which Merida Fund III and Merida Fund IV have loaned the Company an aggregate amount of USD$1,500,000.
On closing, the Company issued a promissory note to Merida Fund III (the "Note") for a principal amount of USD$660,000 (the "Principal Amount"), set to mature on October 18, 2023. The Note has an interest rate of 15%, which shall be paid in common shares of the Company (the “Common Shares” and such shares issuable as interest payment, the “Interest Shares”). The price of these shares will be the greater of (i) 90% of the volume weighted average price per Common Share as reported on the Canadian Securities Exchange (the "CSE") for the 5 consecutive trading days preceding such issuance, and (ii) the minimum price per Common Share permitted pursuant to applicable securities laws and CSE regulations. The Principal Amount may be repaid in Common Shares (the "Conversion Shares") at a conversion price equal to the greater of: (i) the closing market price of the Common Shares on the CSE on the trading day prior to the earlier of dissemination of a news release disclosing the issuance of the Conversion Shares or the posting of notice by the Company to the CSE website of the proposed issuance of Conversion Shares, and (ii) CAD$0.07. The Company also issued warrants to each of Merida Fund III and Merida Fund IV equal to 50% of the aggregate number of Conversion Shares that would be received upon conversion of 100% of the aggregate amount of principal outstanding under the Note.
The Company has also issued 696,942 shares to each of Merida Fund III and Merida Fund IV as a commitment fee for this transaction, representing USD$31,250 divided by 90% of the volume weighted average price per Common Share as reported on the Canadian Securities Exchange for the 30 consecutive trading days preceding such issuance (the “Commitment Fee”). The shares issued in connection with the Commitment Fee were issued at a price of CAD$0.0556 per share.
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