Heritage Cannabis Holdings Corp. HERTF CAN entered a second loan amendment agreement to an initial loan agreement dated March 29, 2021, as amended on October 4, 2021 with BJK Holdings Ltd. in the total amount of $19.775 million spread over four establishments.
Following the second amendment agreement, the maturity date of the loan was extended to November 30e, 2024, and an additional loan facility in the amount of $4.985 million has been granted to the company, bringing the total amount of proceeds the company can access through the loan to $19.775 million. A one-time loan modification fee of $985,000 was paid to BJK on September 29, 2022.
At closing, the monthly interest rate on the loan will be calculated at Royal Bank of Canada prime rate less 1.75%, except for the third facility of the loan which will be calculated at 15% per year. The interest rate on the loan will be increased in installments up to a maximum amount on the maturity date of RBC Prime plus 10% but in no event greater than 18%, except for the third facility of the loan which, on the Maturity Date will be RBC Prime plus 10% but in no event less than 15% per annum.
As part of the loan, Heritage issued a new mandate certificate to BJK on September 29, 2022 allowing BJK to subscribe for and buy up to 50 million ordinary actions in the capital of Heritage at an exercise price of $0.10 per common share. 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 authorized BJK to subscribe and purchase up to 10 million common shares in the capital of Heritage at an exercise price of $0.25 per share. Effective September 30, 2022, the Company will amend the existing warrants so that the expiration date for BJK to exercise the existing warrants will be extended from October 8, 2023 to February 28, 2025.
Heritage will use the loan proceeds for general corporate purposes.
“We are delighted that BJK has extended the maturity of our loan and given us additional capital to allow us to continue to execute our strategy,” said David SchwedeCEO of Heritage.
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