Acreage Holdings (CSE: ACRG.u) this morning finally announced the closing of previously its previously announced credit facilities and loan transactions, albeit at significantly lower values and less favourable terms than previously provided. Collectively, the US$79 million expected to be received by the end of February 2020 has now whittled down to just $43 million, a sizable portion of which was provided by Acreage’s own CEO.
Under the previously announced $100 million credit facility, which was released to the public on February 7, Acreage was to receive an initial draw down of $49 million in association with the facility, with interest payable monthly. That interest was to take the form of 2.55% per annum on the first advance, 1.25% per annum on the second advance, and an undetermined rate for the third advance.
Instead, Acreage has only managed to secure US$21 million within the first advance, which comes well past the deadline of the end of February. Additionally, interest on the first advance has been raised to 3.55%, while the second and third advances have interest rates of 1.85% and 1.55% respectively.
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The remaining $78 million within the credit facility will be available upon Acreage securing additional cash collateral, plus $1.0 million per advance.
In connection with the initial credit facility draw down, Acreage has secured $22 million from that of IP Investment Company, LLC. The funds will be placed in a blocked account, which has been used as security for the aforementioned credit facility.
Of the $22 million raised from IP Investment Company, $21.0 million comes from that of Acreage’s own Kevin Murphy, who the company is quick to point out does not act as an officer or director to that of IP. That investment has been secured by Acreage’s non-US intellectual property as well as certain assets. Additionally, the requirement of IP to raise at least an additional $65 million for Acreage has been waived – suggesting that little to no more funding will come from the firms associated credit facility.
Acreage Holdings last traded at US$1.75 on the CSE.
Information for this briefing was found via Sedar and Acreage Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
