Next Green Wave has completed an asset-backed financing with Landrace Financial (the “Lender”) for a loan (the “Loan”) in the amount of CDN$5,300,000.
“A financing collateralizing US cannabis assets is extremely rare; the fact that we were able to accomplish an asset-backed financing at our relatively early stage of existence is very encouraging and speaks to the Lender’s high confidence in the potential of our Company. It is our expectation that we will achieve both positive cash flow and profitability in the first half of 2020. NGW’s world class indoor cultivation facility has been in a perpetual harvest (with a harvest approximately every second week) for several weeks now and the Loan will allow us to accelerate our distribution, branding and marketing initiatives across the State of California. We now have almost $1 million of premium inventory that we are readying for sale – our goal is to turn all our flower and trim into premium cannabis products yielding a much higher return than selling in bulk.” said Chief Executive Officer Michael Jennings.
The Loan is for a two-year term. Interest on the Loan will be paid monthly in cash: (i) at a rate of 10.5% per annum; plus (ii) the greater of (a) 2.5% and (b) LIBOR rate; plus any default rate. The outstanding principal of the Loan and all outstanding interest thereon will be payable in full on the maturity date. In addition, the Lender will receive a total of 6,500,000 common share purchase warrants having a term of 36 months from the date the Loan is disbursed to NGW (the “Advance Date”) exercisable into common shares of NGW (the “Share”) at a price of CDN$0.20 per share.
Furthermore, the Company has agreed to a non-brokered private placement of 6,666,666 Shares at a price of CDN$0.15 per Share for gross proceeds of CDN$1,000,000 (the “Financing”). The parties to the Financing are all at arm’s-length and there are no finder’s fees payable. Closing is subject to a number of conditions, including regulatory approval. All securities will be held for a period of 4-months from closing of the Financing.
The proceeds from the Financing plus CDN$500,000 will be used to reduce outstanding unsecured convertible notes from CDN$3,000,000 to CDN$1,500,000. Concurrent with the closing of the Financing, the Company will amend the terms of the remaining CDN$1,500,000 of convertible debentures from a conversion rate of CDN$0.388 per share to a price of CDN$0.15. In addition, the Company will reprice the 7,732,357 share purchase warrants previously issued with the notes (CDN$0.48) to a price of CDN$0.20 per warrant (for a period of 24 months from the date of issue), collectively (the “Re-pricing”). The Re-pricing is also subject to a number of conditions, including regulatory approval.
Full terms of the Notes were referenced in the Company’s news release dated May 30, 2019.
In addition, 1,000,000 warrants issued on Sep 12, 2019, have been re-priced from $0.35 to $0.25, all other terms remain the same.
The Company has granted 3,530,000 stock options under its stock option plan (the “Grant”) exercisable at a price of CDN$0.15 per Share to a director, employees and HR consultants of the Company. As per the Company’s stock option plan, the options granted are exercisable until November 19, 2024. The Grant has a vesting period of 25%, every 6 months, for a period of 24 months.
The Company also announces that pursuant to the SDC Purchase Agreement (described in the Company’s News Release of March 12, 2019), effective Nov 19, 2019 it has released the 16,167,092 SDC shares from escrow. The Release is still subject trading restrictions under the Securities Act of 1933, as amended, and applicable State securities laws.
About Next Green Wave
NGW is a fully integrated premium cannabis producer with 8 legacy brands and over 45 products marketed through its WEARESDC brand house. Based in Coalinga, California the company owns and operates a 35,000 sq ft. state-of-the-art indoor cultivation facility and is currently expanding extraction and other operations on its cannabis zoned campus. NGW has a seed library of over 120 cannabis strains which include multiple award-winning genetics and cultivars and is developing its nursery cloning operations with bio-tech leader Intrexon. To find out more visit us at www.nextgreenwave.com or follow us on Twitter, Instagram, or LinkedIn.
On behalf of the Board,
Michael Jennings, CEO
Next Green Wave Holdings Inc.
For more information regarding Next Green Wave, contact:
VP Corp. Development
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, are “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward looking statements. Such risks and uncertainties include, among others; NGW’s financial estimates, its ability to raise capital as a going concern and the effect of capital market conditions and other factors on capital availability; NGW’s ability to repay its current debt; the dependence on maintaining regulatory approvals, including renewing state, local or other licenses and any inability to obtain all necessary governmental approvals licenses and permits to complete construction of its additional proposed facilities in a timely manner; engaging in activities which currently are illegal under US federal law and the uncertainty of existing protection from U.S. federal or other prosecution; regulatory or political change such as changes in applicable laws and regulations, including U.S. state-law legalization, particularly in California, due to inconsistent public opinion, perception of the medical-use and adult-use marijuana industry, bureaucratic delays or inefficiencies or any other reasons; any other factors or developments which may hinder market growth; NGW’s limited operating history and lack of historical profits; reliance on management; ; competition, including from more established or better financed competitors; and the need to secure and maintain corporate alliances and partnerships, including with customers and suppliers. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. Although NGW has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. NGW no obligation to update any forward-looking statement, even if new information becomes available as a result of future events, new information or for any other reason except as required by law.