Heritage Cannabis Announces Second Amendment to Senior Secured Loan and a Facility Increase to $19.775 Million
Toronto, ON, Sept. 29, 2022 (GLOBE NEWSWIRE) — Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF) (“Heritage” or the “Company”), today announced that it has entered into a second loan amending agreement (the “Second Amending Agreement”) to an original loan agreement dated March 29, 2021, as amended October 4, 2021 with BJK Holdings Ltd. (“BJK”) in the total amount of $19.775 million across four facilities (collectively the “Loan”).
As a result of the Second Amending Agreement, the maturity date on the Loan has been extended to November 30th, 2024 (the “Maturity Date”), and an additional loan facility in the amount of $4,985,000 has been extended to the Company, bringing the total amount of proceeds that the Company has access to through the Loan to $19.775 million. A one-time loan amendment fee of $985,000 was paid to BJK on September 29, 2022.
On closing, the monthly interest rate of the Loan will be calculated at the Royal Bank of Canada prime lending rate (“RBC Prime”) minus 1.75%, with the exception of the third facility of the Loan which will be calculated at 15% per annum. The interest rate of the Loan will be increased in increments up to a maximum amount on the Maturity Date of RBC Prime plus 10% but in no case greater than 18%, with the exception of the third facility of the Loan which on the Maturity Date will be RBC Prime plus 10% but in no case less than 15% per annum.
In connection with the Loan, Heritage issued a new warrant certificate to BJK on September 29, 2022 entitling BJK to subscribe for and purchase up to 50,000,000 common shares in the capital of Heritage at an exercise price of $0.10 per common share (the “Additional Warrants”). The Additional Warrants have an expiry date of February 28, 2025. Heritage has also agreed to amend an existing warrant certificate held by BJK dated October 8, 2021 which entitled BJK to subscribe for and purchase up to 10,000,000 common shares in the capital of Heritage at an exercise price of $0.25 per share (the “Existing Warrants”). Effective September 30, 2022, the Company will amend the Existing Warrants so that the expiry date for BJK to exercise the Existing Warrants is extended from October 8, 2023 until February 28, 2025.
Heritage will use the proceeds of the Loan for general corporate purposes.
“We are thrilled that BJK has extended the maturity of our loan and given us additional capital allowing us to continue to execute our strategy,” stated David Schwede, CEO of Heritage.
About Heritage Cannabis Holdings Corp.
Heritage is a leading cannabis company offering innovative products to both the medical and recreational legal cannabis markets in Canada and the U.S., operating under two licensed manufacturing facilities in Canada. The company has an extensive portfolio of high-quality cannabis products under the brands Purefarma, Pura Vida, RAD, Premium 5, feelgood., CB4, Thrifty and ArthroCBD.
ON BEHALF OF THE BOARD OF DIRECTORS OF HERITAGE CANNABIS HOLDINGS CORP.
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The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release.
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”.
By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements.
An investment in securities of the Company is speculative and subject to several risks including, without limitation, the risks discussed under the heading “Risks and Uncertainties” in the Company’s annual management discussion and analysis for the year ended October 31, 2021 and dated May 10, 2022. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this notice.