Delta 9 Reaches Terms on $12 Million Financing with Tier 1 Bank

Delta 9 Reaches Requirements on $12 Million Financing with Tier 1 Bank

 DELTA 9 CANNABIS INC. (TSXV: NINE) is very happy to announce it has come to terms on a $12,000,000 loan and credit facility with a Tier 1 Canadian chartered bank. The name of the Bank isn’t being released at this time as a non-disclosure arrangement is in effect until the signing of a definitive loan agreement.

Under the conditions agreed to between Delta 9 and the Bank, there will be four separate loan segments, each of which is allocated for a different purpose, and each with its own terms:

  1. A demand operating loan of $2,000,000 to be used to finance day-to-day operations. Interest will float at a rate of 1.00% per annum over the Bank’s prime lending rate, which at the current time is 3.45% per annum.
  2. A need revolving loan of $4,500,000 that is meant to aid in funding the purchase of Delta 9’s current production facility. Interest will initially float at 1% over prime, but the Bank will use its best efforts to obtain funds on a fixed rate acceptable to Delta 9 and the Bank, which is meant to be at between 4.68percent per annum for a 1 year term up to 5.45percent per annum for a five year term.
  3. A need non-revolving loan of $4,500,000 to assist in the purchase of lands adjacent to the Company’s current production facility.
  4. A non-revolving credit facility of $1,000,000 for the purchase or lease of equipment needed for the performance of the business’s business. Interest will float at a rate of 1.75% over prime, with fixed rate pricing to be the subject of discussion up to the date of draw down.

“We are extremely pleased to have reached agreement on this loan facility,” said Delta 9 CFO Brent Bottomley. “Our Company is aggressively expanding to increase our reach in Canada and abroad, although equity markets for cannabis issuers generally have pulled back from highs reached early in 2018. To be able to preserve shareholder value over the long run, it was important to us to find a non-dilutive source of funds to help finance our growth.”

Delta 9 CEO John Arbuthnot says the loan agreement marks a shift in the thinking of chartered banks about the cannabis industry.

“This agreement shows real confidence in our Company’s business operations, but also a shift in attitude toward our whole industry, as we approach the entire legalization of recreational cannabis in October,” Arbuthnot says. “More importantly, this debt facility combined with our 23 million prospectus financing which closed last December makes us fully funded for the execution of our business plan in 2019.”

The closing of this definitive loan agreement is subject to final due diligence by the Bank.

About Delta 9 Cannabis Inc..

Delta 9’s wholly-owned subsidiary, Delta 9 Bio-Tech Inc., is a certified manufacturer of medical marijuana pursuant to the ACMPR and operates an 80,000 square foot manufacturing facility in Winnipeg, Manitoba, Canada. Delta 9’s shares trade on the TSX Venture Exchange under the symbol “NINE”.

SOURCE

Published at Wed, 25 Jul 2018 14:35:49 +0000

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