Delta 9 Agrees to Increase Bank Credit Facility to $18.1 Million
WINNIPEG, Aug. 14, 2019 /CNW/ - DELTA 9 CANNABIS INC. (TSX-V: DN) (OTCQX: VRNDF) ("Delta 9" or the "Company") is pleased to announce that it has come to terms on an amendment to the Company's borrowing arrangement with Canadian Western Bank (the "Bank") to provide for an increase to its existing loan and credit facility by the addition of certain loan segments and amendments to certain existing loan segments. The changes will bring the Company's total credit facility with the Bank to approximately $18.19 Million.
"This increased debt financing, together with our recently completed short form prospectus offering of debenture units have well-positioned us to continue the Company's growth and implementation of its business plan for the remainder of the year," said Delta 9 CEO John Arbuthnot.
The Company announced the terms of its financing arrangements with the Bank on July 24, 2018 (the "Original Financing"). The principal terms of the amendment to the Original Financing provide for the following:
- The limit for the demand operating loan under the Original Financing, for the purpose of financing day-to-day operations of the Company, will increase to $4,000,000 from its limit of $2,000,000 under the Original Financing. The interest rate under this loan segment is unchanged from its rate under the Original Financing at 1.00% per annum above the Bank's prime lending rate.
- A credit facility in the amount of $500,000 for the purpose of enabling the delivery of letters of credit required in connection with the Company's operations is added.
- A non-revolving credit facility in the amount of $4,000,000 for the purchase or lease of equipment required for the operation of the Company's business is added, with interest to float at a rate of 1.70% above the Bank's prime lending rate, with fixed rate pricing to be the subject of negotiation up to the date of drawdown.
- The principal amounts of a demand non-revolving loan and a non-revolving equipment credit facility under the Original Financing have been reduced to reflect repayment of principal that was made by the Company since the date of the Original Financing.
"The relationship between our Company and the Bank since the date of the Original Financing has grown steadily, and the proposed terms for these amendments demonstrate the strength of our mutual trust. We have watched Canadian financial institutions becoming more comfortable with the cannabis industry each day, and our experience with the Bank over the past year is a testament to the mutual benefits that can follow from collaboration between the two industries," said Arbuthnot.
The availability of the amended financing arrangements with the Bank is conditional on the Bank's satisfactory due diligence of the Company and finalization of documentation relating to the arrangement.
About Delta 9 Cannabis Inc.
Delta 9 Cannabis Inc. is a vertically integrated cannabis company focused on bringing the highest quality cannabis products to market. Delta 9's wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a licensed producer of medical and recreational cannabis and operates an 80,000 square foot production facility in Winnipeg, Manitoba, Canada. Delta 9 owns and operates a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9's shares trade on the TSX Venture Exchange under the symbol "DN" and on the OTCQX under the symbol "VRNDF". For more information, please visit www.delta9.ca.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Disclaimer for Forward-Looking Information
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's future business plans and other matters. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future.
Forward-looking statements in this news release include statements relating to: (i) the eventual availability of the amended financing arrangements; and (ii) the Company's growth and implementation of its business plan. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including that the Bank may not be satisfied with its due diligence review of the Company, the Company and the Bank may not be able to agree on the final documentation to reflect to amended financing arrangements as well as the risk factors set forth in the annual information form of Delta 9 dated April 30, 2019 which has been filed on SEDAR.
No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors carefully in evaluating the forward-looking statements contained in this news release and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. These forward-looking statements are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
SOURCE Delta 9 Cannabis Inc.
Investor & Media Contact: Ian Chadsey VP Corporate Affairs, Mobile: 204-898-7722, E-mail: [email protected]
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