Debt maturities extended to April 2025
Additional liquidity significantly strengthens the balance sheet
The proceeds will be used to finance the expansion of Florida, Pennsylvania and Michigan
MIAMI, April 30, 2021 / PRNewswire / – Cansortium Inc. (“Cansortium” or the “Company”) (CSE: TIUM.U), (OTCQB: CNTMF), a vertically integrated cannabis company operating under the Fluent ™ brand, announced today the closing of a US $ 71 million Senior secured term loan due April 29, 2025 (the “Term Loan”) from a syndicate operated by US-based institutional lenders.
The term loan will bear interest at the rate of 13% per annum, with a term of four years and call protection of 18 months. The term loan consists of a $ 50 million tranche valued with an initial issue discount of 3% which includes warrants to acquire 12.5 million ordinary shares at an exercise price of $ 1.20 per share, as well as a $ 21 million tranche valued with an initial issue discount of 7% with no equity component. Subject to certain conditions of the term loan, the Company may increase the term loan up to a maximum of $ 20 million.
“Today marks a new start for Cansortium as we now have the financial flexibility and liquidity the company needs to continue to grow its attractive asset base,” said the CEO. Robert beasley. “The proceeds of the term loan were used to settle substantially all of the Company’s existing debt, including the repayment $ 27.1 million convertible debentures due in May. These actions have resulted in more than $ 40 million of liquidity added to our balance sheet thanks to the term loan and the equity offering concluded earlier this month. With a strengthened balance sheet and a simplified capital structure, we are now firmly positioned to execute our growth and expansion initiatives in our core business Florida, Pennsylvania and Michigan markets. ”
Neal hochberg, the Chairman of the Board of Directors of Cansortium added: “Over the past two years, the management and the board of directors of the Company have worked tirelessly to adapt the operations of the Company and strengthen its balance sheet. We deeply appreciate the support of many of our key stakeholders during this time, and we are delighted to welcome a new group of institutional investors to the Company. By extending the terms of our debt by four years and strengthening our liquidity, the Company can now focus all of its attention on maximizing value. “
Mr Beasley added: “Since taking office as CEO in September 2020, we have made dramatic improvements in key aspects of our business, particularly in Florida where we dramatically increased crop yields, introduced new benchmarks and new form factors such as edibles, and increased cultivation and production capacity to better supply our 24 operational dispensaries (which are expected to grow to 27 of here the end of the year). Florida remains the largest limited license cannabis market in the United States and we currently have the sixth largest footprint in the state. I am proud of our team’s early accomplishments so far and look forward to capitalizing on the many growth opportunities to come. “
Seaport Global Securities LLC acted as principal placement agent and Canaccord Genuity Corp. acted as co-manager of the term loan. INFOR Financial Inc. acted as financial advisor to the Company.
Company to Announce Fourth Quarter and Year Ended Results December 31, 2020 to May 3, 2021, and host a live audio conference call and webcast on May 4, 2021 at 5:00 p.m. Eastern Time, to discuss its financial results for 2020 and the first outlook for 2021. The details of the call will be included in the May 3, 2021 Release.
Certain directors of the Company participated in the total amount of $ 6 million, as a member of $ 21 million portion of the term loan, which constitutes a “related party transaction” as that term is defined in National Instrument 61-101: Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company intends to avail itself of the exemptions from the assessment and minority shareholder approval requirements of NI 61-101 contained in Sections 5.5 (a) and 5.7 (1) (a) of NI 61-101 as total amount of the portion of The directors’ term loan does not exceed 25% of the market capitalization of the Company.
The Company did not file a material change report more than 21 days prior to the expected closing of this transaction, as the details and amounts of the directors’ participation in the transaction were not finalized until the end of this transaction. The closing approach and the Company wished to close the transaction as soon as possible, which the Company considered reasonable as it was striving to improve its financial situation by refinancing its debt as soon as possible.
No securities regulatory authority has approved or disapproved of the contents of this press release. The warrants and the underlying securities will be subject to a four month hold period from the closing date for Canadian Holders. The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) or any state securities law. Consequently, these securities cannot be offered or sold in the United States unless they are registered under the US Securities Act and applicable state securities laws or under exemptions from the registration requirements of the US Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of Cansortium in any jurisdiction where such an offer, solicitation or sale would be illegal.
About Cansortium inc.
Based at Miami, Florida, and operating under the Fluent ™ brand, Cansortium aims to be the highest quality cannabis company in the Florida State driven by an unwavering commitment to operational excellence, from seed to sale. Cansortium has developed strong skills in each of the cultivation, processing, retail and distribution activities which has enabled it to operate successfully in the highly regulated cannabis industry. In addition to Florida, Cansortium seeks to create significant shareholder value in the attractive markets of Texas, Michigan, and Pennsylvania, where the Company has obtained licenses and established operations.
Common shares of Cansortium Inc. trade on the CSE under the symbol “TIUM.U” and on the OTCQB Venture Market under the symbol (OTCQB: CNTMF). Investors can find current financial information and real-time Level 2 quotes for the company at www.otcmarkets.com.
Certain information contained in this press release may constitute forward-looking information. In some cases, but not necessarily in all cases, forward-looking information may be identified by the use of forward-looking terms such as “plans”, “targets”, “expects” or “does not expect”, “Is expected”, “an opportunity exists”, “is positioned”, “believes”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of these words and expressions or declares that certain actions, events or results “may”, “could”, “would be”, “could”, “will be” or “will be taken”, “occur” or “be achieved”. In addition, any statement that refers to expectations, projections or other characterizations of future events or circumstances contains forward-looking information. Statements containing forward-looking information are not historical facts but rather represent management’s expectations, estimates and projections regarding future events.
Forward-looking information is necessarily based on numerous opinions, assumptions and estimates which, although considered reasonable by the Company at the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including, but not limited to, the factors described in the documents Company audiences available on www.sedar.com. These factors are not intended to represent a complete list of factors that could affect the Company; however, these factors must be considered with care. There can be no assurance that these estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company expressly disclaims any obligation to update or modify any statements containing forward-looking information, or factors or assumptions that underlie them. tend, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Cansortium Inc