Shiny Health & Wellness Obtains Additional Advance Under Amended Loan Agreement
(All amounts are in Canadian dollars unless otherwise stated)
TORONTO, Dec. 12, 2022 /CNW/ - Shiny Health & Wellness Corp. ("Shiny Health" or the "Company") (TSXV: SNYB) announces that its wholly-owned subsidiary, Shiny Bud Inc. (the "Borrower"), has obtained an additional $1,000,000 advance (the "Subsequent Advance") under its existing term loan agreement with FirePower Capital (the "FirePower Loan Agreement"). The Subsequent Advance is incremental to the $2,000,000 in outstanding borrowings (the "Prior Advance") previously advanced under the FirePower Loan Agreement, for a total current principal amount owing of $3,000,000.
"This additional debt was obtained to improve liquidity for near-term working capital requirements as the business continues to grow its operating cash flow," said Kevin Reed, Chairman and Chief Executive Officer. "Store-level EBITDA and gross margins from our retail cannabis line of business remain strong in the third quarter and we continue progressing our pharmacy health and wellness strategy."
The Subsequent Advance bears interest at 16% per annum with a December 31, 2023 maturity date and total net proceeds of $970,000, after payment of a 3% underwriting fee. A bonus payment of $500,000 is payable to the lender at the earliest of (i) the maturity date of the Subsequent Advance, (ii) the occurrence of a mandatory prepayment event, (iii) acceleration on an event of default, and (iv) the date on which all obligations under the FirePower Loan Agreement are satisfied.
In connection with the Subsequent Advance, the FirePower Loan Agreement was amended to change the interest rate on the Prior Advance from 13.75% to 16% per annum and the maturity date from June 17, 2024 to May 1, 2024. The FirePower Loan Agreement was also amended to require that a 'make whole' fee be paid to the lender, equal to all scheduled but unpaid interest payments through maturity (in respect of both the Prior Advance and the Subsequent Advance), in the event of any repayment prior to maturity, or lender demand on an event of default. The revised implicit interest rate and bonus payment implies a total effective rate of 33.67%.
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.
Shiny Health & Wellness Corp. is on a mission to help people never settle, live fully by being a trusted source for health and wellness solutions and services. The Company recently broadened its retail growth strategy beyond adult-use cannabis by establishing mīhī Health & Wellness, a new line of business focused on building a network of community pharmacies across Ontario. Striving to provide a more diverse and accessible cannabis experience for adult consumers, the Company also operates ShinyBud Cannabis Co., a well-established brand in Ontario strategically located in markets less saturated with cannabis retailers. The Company's board of directors and management team hold extensive retail operating experience, a key competitive differentiator in leading its growth strategy. Shiny Health trades on the TSX Venture Exchange (TSXV) under the ticker symbol SNYB. For more information, please visit www.shinyhealthandwellness.com.
This news release contains statements ("forward-looking statements") that constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward looking statements relate to future performance, events, outcomes or circumstances or are otherwise prospective in nature, are based upon internal assumptions, opinions, estimates, plans, beliefs and expectations about future conditions, developments and courses of action. They are inherently uncertain as they depend on the accuracy of such assumptions, opinions, estimates, plans, beliefs and expectations, which cannot be assured, and are subject to known and unknown risks and uncertainties that will cause actual results to differ from those indicated, suggested or anticipated in the forward-looking statements. The differences may be material and adverse to the Company.
All statements other than statements of current or historical fact constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "intend", "seek", "plan", "aim", "budget", "forecast", "target", "estimate", "objective", "propose", "predict", "potential", "project", "continue", "pursue", "may", "will", "might", "should", "could" or similar words suggesting future outcomes or events or statements regarding an outlook.
Without limiting the foregoing, this news release contains forward-looking statements pertaining to: the Company's efforts towards generating positive operating cash flow and its condition entering 2023; and the progression of Shiny Health's pharmacy health and wellness strategy. Forward-looking statements, and the underlying assumptions, opinions, estimates, plans, beliefs and expectations on which they are based, are inherently uncertain as they depend on future conditions, developments and courses of action that may or not occur or come to be. There can be no assurance that the underlying assumptions, opinions, estimates, plans, beliefs and expectations will prove to be correct and, accordingly, no assurance that the future performance, events, outcomes or circumstances expressed or implied in the forward-looking statements herein will occur or be realized. Actual results will differ, and the differences may be material and adverse to the Company.
In addition to the other factors and assumptions that may be identified herein, material factors and assumptions used to develop the forward-looking statements contained in this news release include, among other things, assumptions, opinions, estimates, plans, beliefs and expectations regarding: the effectiveness of our retail cannabis and pharmacy strategy; our ability to identify and consummate accretive acquisitions, expand our store network within budgeted costs and timelines, drive same-store sales growth, improve margins and generate new revenue streams; our ability to obtain additional licenses, authorizations and regulatory approvals (including any required approvals of the TSX Venture Exchange) as and when required to fit our growth and business plan; the size of the cannabis retail market and estimated portion currently unserved, and the migration of customers from the illicit market to legal market; our ability to capture additional market share; our ability to attract franchisees to Shiny Health's brand and model, and the terms of franchise arrangements; the number, type and locations of new stores; the applicability and relevance of our experience in existing centers and locations to new centers and locations; our ability to influence our customer purchase decisions; our ability to maintain, enhance, and grow our appeal within our addressable market, and to customize products and inventory for the market that resonate with our target customer base; our ability to source product that is key to our menu offerings; our ability to leverage our landlord network and build a flexible lease portfolio; our ability to manage costs and drive operating efficiencies; our ability to retain key management and non-management personnel, and to hire, train and motivate staff; the availability of capital, and our ability to obtain any required external financing on acceptable terms; our competitive strengths and the impact of competition; the accuracy of our financial models; trends in the retail cannabis and pharmacy sectors; the regulatory framework applicable to the retail cannabis and pharmacy industries in Canada, and the direction of any changes in that framework and underlying laws; and general economic, political and social conditions affecting the retail cannabis and pharmacy businesses.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that will cause actual results to differ from those indicated, suggested or anticipated in the forward-looking statements, and the differences may be material. Readers must therefore exercise caution and not rely on forward-looking statements, which rest on assumptions, opinions, estimates, plans, beliefs and expectations as of the date made that may change, and are in any event not a guarantee of future performance or a promise of any future outcomes. We believe such risks, uncertainties and other factors to include, without limitation, the following: risks associated with the retail cannabis and pharmacy industries generally; adverse changes in the general economic or market conditions, and to customer spending in the centers where we operate; unforeseen obstacles that prevent, delay or otherwise compromise the execution of our growth plan; inability to obtain additional licenses and authorizations (and other needed regulatory approvals) as and when required to fit our growth and business plan; ineffectively managing our growth; failure to secure desirable store locations; inability to secure leasehold premises for new stores on acceptable terms, risks associated with leasing retail space; adverse changes to the regulatory framework applicable to the retail cannabis and pharmacy industries in Canada, or to other laws and regulations affecting our business (including taxes); unanticipated diminishment of the Shiny Health or mīhī brands or any trademark protections; negative publicity for us or our business; marketing strategies that are less successful than expected; our highly competitive industry and the relative size and resources of some of our competitors; being unable to successfully open and operate new stores; profitability erosion from unexpected cost increases; slower profitability of new stores; failure to identify, recruit and contract with a sufficient number of qualified franchise partners; lack of access to capital to fund expansion, or more costly financing terms than expected; a data security breach that results in improper use or disclosure of confidential customer or employee information; risks associated with industry consolidation; loss of key management or other key personnel, or unexpected difficulty in attracting, training and/or motivating staff as necessary to execute our business plan; unexpected challenges in growing sales or connecting with our customer base; inability to meet other financial targets; any material claims made against us, which could result in litigation; insolvency risks with parties with whom we do business; increased expenses of being a public company; the forward-looking statements contained in this presentation proving to be inaccurate and incorrect despite there being a reasonable basis therefor at the time they were made; and such other risks, uncertainties and other factors as may be discussed or set out from time-to-time in Shiny Health's public disclosure documents (including, without limitation, those risks identified in the Company's management's discussion and analysis filed by the Company with applicable securities regulatory authorities in Canada and available under its issuer profile on SEDAR at www.sedar.com).
The foregoing lists of material assumptions and risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained herein speak only as of the date of this news release. The Company disclaims any intention, obligation or undertaking to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, or to explain any difference between actual results and those indicated, suggested or anticipated in any forward looking statements, except as may be required under applicable securities laws.
All forward-looking statements contained in this news release and in any related reports or disclosures filed or issued by the Company, or made by the Company's directors, officers and other persons authorized to speak on its behalf regarding the subject matter hereof, are expressly qualified by this cautionary statement.
SOURCE Shiny Health & Wellness Corp.
CONTACT INFORMATION: Kevin Reed, Chairman & CEO, P: +1 (647) 988-0371; E: [email protected]; Investor Relations: P: 1-888-833-1260, E: [email protected]
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