Jushi Holdings Inc. (OTCQX: JUSHF) announced $15.25 million in debt financing. To date, The company said it has received cash proceeds of $16.325 million and additional binding subscriptions, for a pro forma total issuance of $17.425 million of 10% senior secured notes and warrants to acquire a subordinate voting share. The company also received non-binding indications of interest for up to an additional $10 million of financing.
The money will be used for the cash portion of a previously announced Pennsylvania grower-processor permit holder transaction. Last month the company said it was planning on buying Vireo Health’s (OTC:VREOF) Pennsylvania Medical Solutions in an effort to strengthen its position in the state’s market. Jushi was to pay Vireo $16.3 million in cash, a $3.8 million seller note, and assume a $17 million facility associated with a long-term lease obligation. The $37 million deal is expected to close by the end of August 20.
The company said in a statement that all Notes would mature on January 15, 2023, and will bear interest of 10.0% per annum payable in cash quarterly. Jushi’s obligations under the Notes are secured by the assets of Jushi and certain of its subsidiaries (subject to certain exclusions) and are also guaranteed by certain subsidiaries of the Company and rank pari passu with the currently outstanding 10% senior secured notes of the Company. In connection with the Offering, the purchasers of the Notes will also receive Warrants to acquire subordinate voting shares of the Company at 75% coverage with an expiry date of December 23, 2024, at an exercise price equal to US$1.25 (~CAD$1.70 as of 7/10/20). The Warrants contain a cash-less exercise (net settlement) option available 12 months after issuance.
Jushi’s Chairman & CEO Jim Cacioppo subscribed for US$1.5 million of the Notes with other insiders and management subscribing for US$3.475 million of the Notes.