Decibel announces $ 30 million non-dilutive debt financing from Connect First Credit Union

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CALGARY, AB, Dec. 30 2020 / PRNewswire / – Decibel Cannabis Company Inc. (the “Company” or “Decibel”) (TSXV: DB) (OTCQB: DBCCF), is pleased to announce that it has entered into a Letter of Commitment with Connect First Credit Union Ltd. (“First of all Calgary“) in respect of $ 30 million of the debt capital (the “Amount committed“). The Committed Amount is made up of $ 28.5 million term debt (the “Term debt“) and one $ 1.5 million authorized overdraft on State claims (the “Overdraft“) (collectively, the”Credit facilities“). The funds will be used to repay the existing debt of Decibel ($ 26.8 million) and provide additional funds for working capital.

Logo Decibel Cannabis Company Inc. (CNW Group / Decibel Cannabis Company Inc.)

Funding highlights

  • Total capital and extended maturity: Credit facilities include $ 28.5 million term debt and a $ 1.5 million Overdraft authorized to repay Decibel’s existing debt of $ 26.8 million. The credit facilities mature 5 years from the closing date and are amortized over 10 years (previous debt had an average amortization period of 5 years).

  • Improved liquidity: Funding translates into $ 3.2 million immediate gross product and a supplement ~ $ 1 million savings on the repayment of capital on December 31, 2020. The product will support the continued growth of sales and working capital needs of Decibel.

  • Alignment with operational schedule: The credit facilities are aligned with Decibel’s operational calendar. The Company will benefit from an interest period only on $ 16 million Debt Term, ending in the third quarter of 2021. The main savings over this period will provide Decibel with additional flexibility and resources to support its growth strategy.

  • Lower interest rate: The interest rate incurred under the credit facilities is a 5-year fixed rate of 4.75% for the term debt and prime rate + 1.00% for the authorized overdraft. This reflects a reduction in the blended interest rate of around 1.70%, which is about $ 360,000 annual interest savings for Decibel over the whole of 2021.

  • Simplification of financial commitments: The credit facilities have two financial covenants tested annually, a debt service coverage ratio of at least 1.40: 1.00 and a debt ratio of not more than 0.75: 1, effective the end of the year 2021 of Decibel (December 31, 2021). The debt ratio in subsequent years will drop to 0.50: 1 starting in 2022. Credit facilities also have a running monthly ratio clause of at least 1.25: 1 starting in January 2021. Decibel’s 12-month forecasts provide for compliance with all financial covenants.

Debt financing and ATB repayment

The Company expects to repay its credit facilities with ATB Financial (“ATB“) on or before January 5, 2021 as part of its closing and funding arrangements with First Calgary. The Company would like to thank ATB for its commitment and confidence in the Company from the start and for its support in the transition of its banking relationship to First Calgary.

Appointment of the Chief Financial Officer

Decibel is pleased to announce the appointment of Stuart Boucher as CFO, in force December 30, 2020.

“We would like to congratulate Stuart on his appointment as CFO,” said Cody Church, Interim CEO and President of Decibel. “Over the past year, the Board of Directors has been impressed with Stuart’s strategic leadership.

About decibels

Decibel is uncompromising in the process and know-how necessary to deliver the highest quality cannabis products and retail experiences. Decibel has three active or developing production houses as well as its wholly owned retail business, Prairie Records. The Qwest estate at Creston, British Columbia is a 26,000 square foot licensed and operating grow space that produces the widely championed, rare cultivar-focused Qwest and Qwest Reserve brands that are sold in six provinces across Canada. Thunderchild Cultivation, an 80,000 square foot indoor grow facility in Battleford, SK should be completed and licensed in 2020. The Plant, the Decibel extraction facility, in Calgary, AB owns 15,000 square feet of extraction and product development space licensed from Health Canada. This production house will fuel the growth of our Qwest, Qwest Reserve and Blendcraft brands, in new and innovative product formats such as concentrates, vapes, edibles and beyond.

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.

Warnings

Forward-looking information

This press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as of the date of this press release. Any statement involving discussions regarding predictions, expectations, beliefs, plans, projections, goals, assumptions, future events or performance, “anticipates” or “does not anticipate”, “plan”, “budget”, “planned”, ” provides for “,” believes “,” believes “or” intends “or variations of these words and expressions or asserting that certain actions, events or results” may “or” could “,” would “,” could ”Or“ could ”be considered to occur or be achieved) are not statements of historical fact and may be forward-looking statements.

In this press release, forward-looking statements relate, among other things, to the principal anticipated savings of Decibel, including the amount, start date and impact thereof; the respect expected by Decibel of its financial covenants; the repayment date of the Decibel ATB facility and the implicit closing date of the credit facilities; and the expected completion and authorization date for Thunderchild Cultivation. Forward-looking statements are necessarily based on a number of estimates and assumptions which, while believed to be reasonable, are subject to known and unknown risks, uncertainties and other factors that may cause actual results and future events differ materially from those expressed or implied. by such forward-looking statements. These factors include, but are not limited to: risks associated with delays, regulatory changes and impacts, capital requirements, construction impacts, travel requirements and unforeseen requirements resulting from the COVID-19 pandemic , the ability to obtain or maintain licenses to retail cannabis products; the review of the Company’s production facilities by Health Canada and the receipt or maintenance of licenses (including any amendments thereto) from Health Canada in this regard; future legislative and regulatory developments regarding cannabis; inability to access sufficient capital from internal and external sources, and / or inability to access sufficient capital on favorable terms; the general labor market and the ability to access, hire and retain employees; general business, economic, competitive, political and social uncertainties; the satisfaction of the conditions precedent of the Company’s credit facilities; the timing and completion of the construction and expansion of the Company’s production facilities and retail locations; and delay or failure to receive board approvals, regulatory or otherwise, including approvals from the TSX Venture Exchange, if applicable. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Therefore, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Company assumes no obligation to update any forward-looking statements of beliefs, opinions, projections or other factors, should it change, except as required by law.

This press release contains forward-looking financial information and financial outlook information (collectively, “FOFI”) relating to the Company’s forward-looking results of operations, including, without limitation, the expected results of its management measures. cost reduction and, which are subject to the same assumptions, risk factors, limitations and qualifications as stated above. Readers are cautioned that the assumptions used in the preparation of this information, while believed to be reasonable at the time of preparation, may prove to be imprecise and, as such, FOFI should not be relied on unduly. The actual results, performance or achievements of the Company could differ materially from those expressed or implied by these FOFIs, or if any of them do, what benefits the Company will derive from them. The Company has included FOFI in order to provide readers with a more complete perspective on the Company’s future operations and this information may not be appropriate for other purposes.

These forward-looking statements and FOFI are made as of the date of this press release and the Company disclaims any intention or obligation to update any forward-looking statements and FOFIs, whether as a result of new information, events or results. future or otherwise, other than as required by applicable securities laws.

Cision

Cision

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SOURCE Decibel Cannabis Company Inc.


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