Harborside Inc. (CSE:HBOR) (OTCQX:HBORF) closed the first tranche of its previously announced $77.3 million debt financing with Pelorus Equity Group. and provided a business update, including with respect to the proposed acquisitions of UL Holdings Inc. and LPF JV Corporation to form StateHouse Holdings.
Highlights
- Closing of the first tranche $45.4 million of Pelorus Roll Up Financing out of the total expected of $77.3 million
- HSR 30-day waiting period for business combination with Loudpack and Urbn Leaf has expired.
- Enhancement to planned renewable energy microgrid project
Proceeds from the first tranche of the Roll Up Financing will be used to retire certain existing loans, to fund closing costs and interest reserves and to provide additional working capital to the three companies. Proceeds from the second tranche will be used primarily for working capital purposes and for growth capital of StateHouse.
"With the Roll Up Financing, we are unlocking significant value from our combined real estate portfolio, and positioning StateHouse to be a leading consolidator of California's cannabis sector," said Matthew Hawkins, chairman and interim CEO of Harborside. "We are pleased that Pelorus recognized the value of our assets, including over $100 million in real estate value and the potential of our growth strategy. We look forward to a long and productive partnership with the firm.
Pelorus agreed that Statehouse is well-positioned for long-term success in the California cannabis market.
“We are excited to help the company achieve its growth objectives with this innovative financing solution, which is one of the first in our new lower cost stabilized lending program,” said Travis Goad, managing partner of Pelorus.
With the closing of the Roll Up Financing and Harborside's access to an additional $31.9 million of working capital after closing of the transactions, the company has chosen to terminate the proposed US$10 million private placement financing of equity units.
Renewable Energy Microgrid Project
Harborside has made a major enhancement to its planned commercial-scale, renewable energy microgrid project at its 47-acre production campus in Salinas, California. The company expects energy cost savings of 20% in the first year of operation.
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