Aleafia Health Announces Closing of a New $19 Million Credit Facility and Extension of Existing Credit Facility
-- Credit Facility provides the Company with liquidity to fund operations and organic growth initiatives -- Two-year term provides additional financial flexibility
TORONTO, Dec. 29, 2021 (GLOBE NEWSWIRE) --
Aleafia Health Inc. (TSX: AH, OTCQX: ALEAF) ("Aleafia Health" or the "Company") is pleased to announce the closing of a credit facility of up to $19 million (the "Credit Facility").
"This financing improves our liquidity and capital structure as the Company's senior secured debt obligations will now mature in December 2023 rather than in August 2022," said Aleafia Health CEO Geoffrey Benic.
"The transaction allows us to continue the growth of our core adult-use and medical cannabis sales channels, as we again expect to realize sequential growth in both channels over the previous quarter." The Credit Facility is financed by the Garrington Group of Companies, a Toronto-based private lender providing working capital financing to the underserved, small to mid-sized middle market sector across North America, providing credit facilities that generally range from $1 million to over $30 million. It consists of a revolving receivables facility of up to $7 million and a term loan of $12 million. The maturity date is December 2023. The term loan was fully drawn by the Company upon closing. The revolving receivables facility is expected to be drawn in January 2022 and further thereafter as receivables grow with the Company's revenue. The interest rate is in-line with the Company's existing credit facility and is payable monthly. The Credit Facility is secured primarily by way of first lien mortgages on the Company's Paris, Ontario and Grimsby, Ontario production facilities, and includes customary financial and restrictive covenants. The net proceeds from the Credit Facility will be used to fund working capital, to repay $5 million in principal on the existing senior secured credit facility, announced on August 23, 2021 (the "August Credit Facility"), along with accrued interest and fees, and for general corporate purposes.
The term of the August Credit Facility has been extended from August 2022 to December 2023. In connection with that facility, a first lien mortgage will be granted on the Company's Port Perry, Ontario outdoor cultivation property.