CanadaBis Capital Inc. Acquires $3.5 Million In Bank Financing and Extends the Terms of Existing Warrants
CanadaBis Capital Inc. (“CanadaBis” or “the Company”) (TSXV:CANB), through its subsidiary 1998643 Alberta Ltd. (“Stigma Grow”), is pleased to announce that it has successfully executed its option to purchase its leased cultivation facility, located in Red Deer County, Alberta.
The operating facility currently holds a Health Canada-issued cultivation, processing and sales license, which the Company has applied to amend to include dried flower. This amendment will provide the Company with the ability to sell ultra-premium cannabis products to licensed provincial retailers for sale to consumers. Having just completed its third harvest, Stigma Grow continues to build inventory of high-THC dried flower in anticipation of the approval of this amendment, as well as for use in a variety of new products to become available upon the anticipated legalization of extracts and topicals.
Servus Credit Union has extended a $3.5 million fixed mortgage to assist in facilitating the purchase of the facility, with $0.7 million in cash making up the remainder of the $4.2 million purchase price. The mortgage has a 14-year term at an interest rate of prime + 1% and is interest-only until March 1, 2020.
Stigma’s cultivation facility is the cornerstone of CanadaBis’ vertically integrated structure. Having it wholly owned by Stigma allows the Company to have greater control over operating cost structure, and provides full ownership of a high-value, scalable asset.
In addition, the Company intends to extend and reprice all existing and outstanding share purchase warrants. Each warrant entitles the holder to acquire one common share in CanadaBis for every one share purchase warrant. The warrants have a term of one year and an exercise price of $1.00 per warrant. The Company intends to reprice these warrants to $0.50 and extend the life of the warrants by an additional two years. The warrant extension and repricing will be communicated to each warrant holder and is also subject to TSXV Exchange approval.
Finally, the Company has received TSXV Exchange approval for the previously announced acquisition of 2103157 Alberta Ltd., operating as INDICAtive Collection. INDICAtive Collection is now open and serving customers in Red Deer’s high-traffic ‘Gasoline Alley’.
Under the terms of the agreement, CanadaBis paid $100 cash for all outstanding shares of the Acquiree, which was comprised of a building valued at $2.5 million, other liabilities of $0.3 million, a vendor-take-back mortgage of $0.2 million and a $0.8 million fixed mortgage from Servus Credit Union. The vendor-take-back mortgage has a two-year term at an interest rate of 8%. Both principle and interest are due on maturity. The fixed mortgage has a 19-year term at an interest rate of prime + 1.8%. Repayments are interest-only until February 2020.
About CanadaBis Capital Inc.
CanadaBis Capital Inc. (TSXV:CANB) is a vertically integrated Canadian cannabis company focused on achieving large-scale growth in the fast-emerging global cannabis market. By targeting organic growth opportunities alongside the right-fit partners, we remain focused on finding and capitalizing on chances to grow, diversify and continue to lead our industry.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to our business and operations including development and expansion plans; intention to develop property in British Columbia; increasing our product lines to include CBD distillates; and our general business plans. Forward-looking statements are necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause 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: compliance with extensive government regulation, the general business, economic, competitive, political and social uncertainties; successful negotiation of necessary agreements to get our product to market; requirement for further capital, delay or failure to receive board, shareholder or regulatory approvals; the results of operations and such other matters as set out in the Filing Statement available on SEDAR at www.sedar.com. 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 forward-looking statements. Investors are cautioned that forward-looking information is not based on historical facts but instead reflects management’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although we believe that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have a material adverse effect on our future results, performance or achievements.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. CanadaBis Capital does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
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