Multi-state operator iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) said that it has entered into a senior secured term loan of up to $50 million from one or more investment funds managed by Torian Capital Partners. The loan will be doled out in two tranches of $25 million each with similar terms.
iAnthus said it will use the money for its expansion efforts in Florida and the company’s new Be. retail locations in Nevada, New Jersey and New York. The company is expected to report its second-quarter earnings on August 27. Last month the company noted that its CBD For Life products will be sold in Dillards Department Stores.
“Reducing our cost of capital has been one of our key goals for this year. We believe this is a great opportunity to add strength to our balance sheet as we continue to invest in our key expansion initiatives, along with people, systems, and brands,” said Hadley Ford, CEO of iAnthus. “This transaction will position us well as we continue our strategic investments to take advantage of the once-ever opportunity presented by the cannabis industry.”
iAnthus said that the loan will be secured by a first-priority lien on all current and future assets of the company and its affiliates, subject to certain exceptions, including applicable cannabis regulations, and will be guaranteed by all current and future affiliates of the Company. Each tranche of the Term Loan will bear interest at a rate of 9.0% per annum, payable quarterly in arrears during their respective terms and each tranche will mature 36 months from the date of its advance. Following the 12-month anniversary from the date of advance of each tranche, iAnthus may prepay the outstanding principal amount of the such tranche: (i) in year two, upon payment of 109% of the principal amount outstanding and (ii) in year three, upon payment of 104.5% of the principal amount outstanding.
Further, upon completion of each tranche, Torian Capital will be issued share purchase warrants (“Warrants”) from iAnthus in an amount equal to 20% coverage of each tranche. Each Warrant will entitle Torian Capital to purchase one common share for a period of 36 months from the date of issue. The Warrants issued will, subject to the policies of the Canadian Securities Exchange (“CSE”), have an exercise price equal to a 25% premium to the closing price of iAnthus’ common shares on the CSE on the day prior to the applicable closing of the relevant tranche. The Warrants may be called by iAnthus if the volume-weighted average price of iAnthus’ common shares on the CSE exceeds 2.0x the exercise price for 20 days within any 30-day period, and the daily average trading volume of iAnthus’ common shares on the CSE equals or exceeds 25% of the Warrants then outstanding.