CubicFarm Systems Corp. announces $6.25 million secured term loan

CubicFarm Systems Corp. announced that it entered into a binding term sheet for a senior secured revolving term loan to support its business operations. 

The Term Sheet commits to a total of CAD6.25 million, with an option to increase the commitment to CAD8.0 million. The Term Loan will have a term of two years, subject to prepayment obligations upon the Company achieving certain milestones or disposing of assets outside of the ordinary course of business and will bear and pay interest at a rate of 10.0% per annum.

The Term Loan is provided by a group of lenders (the "Lender") that includes one non-independent director of the Company whose loan amount is less than 20% of the total facility size.

The Term Loan will be supported by security in favour of the Lender, evidenced by a general security agreement over all of the assets of the Company and its subsidiaries. The Term Loan will be subject to an upfront fee equal to 1.0% of the commitment amount.

The closing of the Term Loan will be subject to execution of a term loan agreement and satisfaction of certain conditions precedent by the Company, including the subordination of an existing loan from a senior lender.

For each Term Loan draw, the Lender will receive share purchase warrants in HydroGreen, Inc., a wholly-owned subsidiary of the Company, at a number and price determined by the amount of a Term Loan draw divided by a price per HGI share calculated using a formula at the time of such Term Loan draw. Such exercise price for the Warrants shall initially be at a pre-money valuation of HGI that is the lesser of USD20.0 million and the market capitalization of the Company at the time of the draw. The Warrants will have a term of five (5) years.

"We believe that this Term Loan will provide the additional liquidity necessary to successfully pivot our strategy to a focused, scalable business model," said Edoardo De Martin, interim Chief Executive Officer.

"The Term Loan complements our ongoing cost control measures and will allow us to execute key strategies that will accelerate our path to profitability, including HydroGreen sales and our carbon credit commercialization program. It's rare to have a globally scalable technology that can improve animal health and performance, deliver meaningful environmental benefits, and position us to enter the rapidly growing carbon credit market to support companies and institutions with net-zero goals."

For more information:
CubicFarms
1-888-280-9076
info@cubicfarms.com
www.cubicfarms.com


Publication date:



Receive the daily newsletter in your email for free | Click here


Other news in this sector:


Sign up for our daily Newsletter and stay up to date with all the latest news!

Subscribe I am already a subscriber