Medcolcanna Organics Announces Bridge Loan Arrangement
Bogotá, Colombia--(Newsfile Corp. - February 4, 2021) - Medcolcanna Organics Inc. (NEO: MCCN) ("Medcolcanna", "MCCN" or the "Company"), a leading Colombian and globally integrated cannabis company, announces an update with respect to the previously announced bridge loan arrangement with certain executive officers (the "Lenders") of the Company (the "Bridge Loan"), as more particularly set forth in the press release dated January 4, 2021. Under the terms of the Bridge Loan, the Lenders provided an initial bridge loan financing amount of $275,000 for a two-year term at an annual interest rate of 7.85%, with interest payments completed quarterly and with amortization of same commencing fifteen months from the date of the loan. Pursuant to recent amendments to the term of the Bridge Loan, an additional amount of $225,000 is to be made available pursuant to the Bridge Loan on or after January 21, 2021 with an option commencing that date and lasting until February 21, 2021 for an additional $250,000 (the "Override Amount"), bringing the total available loan amount to $750,000.
Payments on the principal of the Bridge Loan are deferred until fifteen months after the commencement of the Bridge Loan, unless certain financing events or positive cash flow milestones are achieved by the Company wherein repayment of the Bridge Loan would be accelerated. As part of the Bridge Loan arrangement, 7.5 million warrants with an exercise price of $0.10 over a two-year term will be issued to the Lenders, with an additional 3.75 million warrants on the same terms issuable if and when the Override Amount is advanced. Final details of the Bridge Loan and the issuance of the warrants referred to above are subject to approval of NEO Exchange Inc.
This loan is considered to be a "related party transaction" pursuant to Multilateral Instrument 61-101, but the Company is availing itself of the exemptions from obtaining a formal valuation and obtaining "majority of the minority" approval due to the exemptions available in Sections 5.5(a) and 5.7(1)(a) of said instrument.
Medcolcanna is a Canadian integrated medical cannabis company, whose fully licensed operations are based in Colombia. Led by a proven and successful management team, Medcolcanna has facilities in optimal growing locations which positions the Company to become a global leader in the medical cannabis market.
Medcolcanna employs state of the art organic agricultural technology and innovative pharmaceutical processes to produce high-quality products. The Company's scalable production model and network of pharmaceutical partnerships globally ensures that they remain at the forefront of the medical cannabis industry.
Additional information about Medcolcanna can be found on its web site at www.medcolcanna.com
Medcolcanna Investor Relations Contact:
Chris Reid, CFO
Carrera 49b # 93-62
Phone: +571 642-9113
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals for any proposed transaction, including those discussed herein. 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. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.
Medcolcanna assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/73634