DionyMed Brands Inc. (DionyMed or Company) (CSE:DYME), a multi-state cannabis brand and delivery platform, today announced it has signed a definitive agreement (the Agreement) for a two-year, up to US$40 million senior secured credit facility from a syndicate of investors. The credit facility consists of a US$15 million term loan facility and a US$25 million asset-backed loan facility. DionyMed will draw US$13 million following the completion of certain conditions to the satisfaction of the investors. Currently, the syndicate of investors have committed to provide US$13 million of the credit facility. Future commitments from existing or future lenders are expected for the full amount. Amounts drawn under the facility will be guaranteed by DionyMed and its subsidiaries and will be secured by all assets of DionyMed and each subsidiary, including, inventory, trade receivables and real property.
This credit facility will be used for acquisitions, capital expenditures, refinancing existing debt, working capital and general corporate purposes.
The credit facility provides DionyMed an efficient capital structure as it continues to expand its US operational footprint and product portfolio, through both inorganic and organic growth opportunities. The facility will bear interest of LIBOR plus 8% rate with a commitment fee, an arrangement fee and an annual fee. The credit facility includes up to an aggregate of 7.1 million warrants with warrants issued to investors based on the amount drawn on the credit facility proportionate to the maximum credit facility size of $40 million. Each warrant provides the investor the right to purchase one subordinated voting (common) share and the warrants expire after 36 months. If the credit facility is fully drawn, the warrants would have a weighted-average exercise price of C$5.16 per share based on the C$3.25 share price as of the close of business on January 16, 2019.
An efficient capital structure is an essential part of DionyMeds strategic plan as we continue our growth trajectory and further scale our operations. Building upon our capital raise in November 2018 of C$35 million, this credit facility provides non-dilutive capital to help us further achieve our aggressive growth goals, which focus on advancing our deal pipeline and building upon our existing cannabis to consumer platform. The cannabis industry will continue to consolidate at an increasing rate and DionyMed is strongly positioned to play a leading role in this stage of the industrys rapid growth. We look forward to continuing to share our progress with investors on our many growth initiatives over the coming year. We want to thank our investment partners for their ongoing commitment and support to our future, commented Edward Fields, CEO of DionyMed.
A copy of the Agreement is available on the Companys SEDAR profile at www.sedar.com.
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Founded in 2017, DionyMed is a multi-state cannabis brands and delivery platform, supporting cultivators, manufacturers and award-winning brands in the medical and adult-use cannabis markets. DionyMed sells branded products in every category from flower to vape cartridges, concentrates and edibles. DionyMed serves more than 700 dispensaries and completes over 40,000 Direct-To-Consumer deliveries each month with its growing portfolio of products and brands. Learn more at www.DionyMed.com and follow @DYME_Inc on Twitter and LinkedIn.
Forward-Looking Information and Statements
This news release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Companys beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Companys control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate, or believes, or variations of such words and phrases or may contain statements that certain actions, events or results may, could, would, might or will be taken, will continue, will occur or will be achieved and include, without limitation, statements related to the ability of the Company to satisfy the conditions for future draws under the Agreement and to make future draws under the credit facility, the Companys expectations with respect to future commitments for the full amount of the credit facility, the use of funds made available under the credit facility, the expansion of the Companys US operational footprint and product portfolio, the number and weighted-average exercise price of the warrants issued in connection with the credit facility, the expansion of the Companys online platforms, enhancing the Companys distribution reach and product variety and changes to the Companys revenue drivers.
In connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions, including but not limited to: the Company having the requisite borrowing base and being able to satisfy the conditions for future draws under the Agreement in the Lenders discretion and being able to make future draws under the credit facility, the Company being able to obtain future commitments from existing or future lenders for the full amount of the credit facility, the Companys business plan necessitating the use of proceeds as set out herein, the Companys share price maintaining relative stability with respect to the weighted-average exercise price of the warrants issued in connection with the credit facility.
By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements, including but not limited to: the Company not having the requisite borrowing base or not being able to satisfy the conditions for future draws under the Agreement in the Lenders discretion, the Company not being able to make future draws under the credit facility, there not being future commitments from existing or future lenders for the full amount of the credit facility, material changes in the Companys business plan that would affect the use of proceeds as set out herein, there being material fluctuations in the Companys share price and certain other risk factors set out in the Listing Statement of the Company available on the Companys profile on SEDAR at www.sedar.com.
Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward- looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.
Edward Fields, CEO
Peter Kampian, CFO