- Amended and restated loan increased to $7.5 million from $3.5
million as James E. Wagner
continues to deliver on operational milestones
- Receivables Financing Facility represents new product for
Trichome Financial borrowers
TORONTO, Nov. 7, 2019 /CNW/ - Trichome Financial
Corp. (the "Company" or "Trichome Financial") (TSXV:
TFC) is pleased to announce that on November
6, 2019 it closed a follow-on loan to James E. Wagner
Cultivation Corporation ("JWC") (TSXV:JWCA) of up to an
incremental $4.0 million, by way of
an amendment and restatement of the Company's existing loan
agreement with JWC, for a total aggregate loan of up to
$7.5 million (the "Amended
Loan"). Trichome Financial previously advanced $3.5 million to JWC on February 19, 2019. JWC is a licensed
producer under the Cannabis Act that produces premium
cannabis products using proprietary aeroponic cultivation
practices.
Pursuant to yesterday's closing, Trichome Financial provided JWC
with an initial advance of $2.85
million under the Amended Loan (the "First Advance"),
with the balance of $1.15 million to
be advanced conditionally upon the achievement by JWC of certain
milestones (the "Second Advance"). The proceeds will be used
by JWC to fund its remaining capital expenditures and for working
capital purposes as JWC begins to materially scale revenues out of
its flagship facility at 540 Manitou Drive in Kitchener, Ontario ("JWC2").
The Amended Loan is secured by a perfected first lien on all of
JWC's current and future tangible and intangible assets (including
a share pledge from all subsidiaries of JWC) and bears interest at
a rate of 9.25% per annum. Upon closing of the First Advance,
Trichome Financial received a total of 984,208 common shares (the
"Bonus Shares") of JWC and 1,696,385 common share purchase
warrants (the "Bonus Warrants"), with each warrant having a
term of two years and a strike price of $0.42. Upon closing of the Second Advance,
JWC will issue to Trichome Financial additional Bonus Shares equal
to 14.87% of the Second Advance, divided by the closing price per
common share of JWC on the last trading day preceding the date of
the Second Advance. JWC will also issue additional Bonus
Warrants equal to 25.63% of the Second Advance, divided by the
closing price per common share of JWC on the last trading day
preceding the date of the Second Advance, with each warrant having
a term of two years from the date of the First Advance and a strike
price equal to 105% of the closing price per common share of JWC on
the last day preceding the date of the Second Advance. The
initial $3.5 million of the Amended
Loan will mature on February 19, 2021
and the remaining $4.0 million will
mature on November 6, 2021.
In addition to the Amended Agreement, Trichome Financial and JWC
entered into a Receivables Financing Facility (the
"Facility"), whereby JWC may elect to finance certain
qualified receivables. Total availability under the Facility
is initially capped at $5.0 million
and the financing of any receivables under the agreement will be
subject to Trichome Financial's sole discretion.
"Having closely monitored JWC's performance and success at
hitting milestones since our original loan closed in February, we
are pleased to increase our commitment to JWC. Given its superior
production capabilities, proven product quality and position as a
premium cannabis brand, we feel JWC is well-positioned amongst its
peers in the Canadian market," said Michael
Ruscetta, Trichome Financial's Chief Executive Officer. "As
capital remains very limited in the cannabis sector, our deal flow
has increased significantly, resulting in a more robust pipeline of
attractive lending opportunities for our shareholders."
About Trichome Financial Corp.
Trichome Financial is a specialty finance company focused on
providing flexible and creative credit solutions to the global
legal cannabis market. Trichome was created to address the lack of
credit availability in the large, growing and increasingly complex
cannabis market. Founded by industry leaders Origin House and Stoic
Advisory, Trichome Financial's experienced management team has a
unique edge to capitalize on proprietary deal flow and industry
insight while developing a first mover advantage as a global
cannabis focused specialty finance company. Trichome Financial
provides customized financing solutions across the industry value
chain to support growth, capital expenditures, mergers,
acquisitions, working capital and other needs. Leveraging the
combined resources and knowledge of its founders, it is able to
offer significant value-added financial, product, market and
operational support to its partner companies. Trichome Financial's
current assets are all based in Canada and it has no operations or assets in
the United States.
For further information about Trichome Financial please visit us
at www.trichomefinancial.com or @trichomefinance on Twitter and
refer to the joint information circular of Trichome Financial and
22 Capital dated May 29, 2019 which
is available on the Company's SEDAR profile at www.sedar.com.
READER ADVISORY
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this press
release.
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news
release. Any statement that involves discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often but not always
using phrases such as "expects", or "does not expect", "is
expected", "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts", "estimates", "believes" or
"intends" or variations of such words and phrases or stating that
certain actions, events or results "may" or "could", "would",
"might" or "will" be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements. In this news release, forward-looking statements relate
to, among other things: the advance of the Second Advance and
receipt of bonus consideration in respect thereof; the construction
of JWC2 and the future revenues of JWC; the factoring by JWC of
receivables under the Facility; and the future market opportunity
for Trichome Financial. Forward-looking statements are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable, are subject to known and unknown risks,
uncertainties, and other factors which may cause the actual results
and future events to differ materially from those expressed or
implied by such forward-looking statements. Such factors include,
but are not limited to: general business, economic, competitive,
political and social uncertainties; and the delay or failure to
receive board, shareholder or regulatory approvals. There can be no
assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on the forward-looking statements and
information contained in this news release. Except as required by
law, Trichome Financial assumes no obligation to update the
forward-looking statements of beliefs, opinions, projections, or
other factors, should they change.
SOURCE Trichome Financial Corp.