Heritage Cannabis Holdings Corp. (OTCQX:HERTF) (CSE:CANN) has entered into a second loan amending agreement to an original loan agreement dated March 29, 2021, as amended October 4, 2021 with BJK Holdings Ltd. in the total amount of $19.775 million across four facilities.
As a result of the second amending agreement, the maturity date on the loan has been extended to November 30th, 2024, and an additional loan facility in the amount of $4.985 million 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 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 million common shares 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 entitled BJK to subscribe for 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 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.
Photo: Benzinga; Sources: courtesy of Kindel Media via Pexels
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