Glass House Brands (NEO: GLAS.u) is already in need of additional capital following its de-SPACing earlier this year. The firm has managed to enter a senior secured term loan arrangement with a private credit investment fund.
The arrangement will see the company provided with up to US$100 million in funding, with the initial draw pegged at US$50 million, followed by two further US$25 million draws once certain undisclosed conditions are met. The debt comes with a variable interest rate, which is currently set at a rate of 10% and is reportedly capped at 12%.
While an overall maturity was not provided by the company, it was indicated that repayment is to begin on December 1, 2023, with 1.25% of the initial $50 million loan to be paid back on a monthly basis. If further drawdowns are made on the loan, 1.25% of those drawdowns are also to begin being repaid on this date on a monthly basis as well.
In addition to the variable interest rate, the company was required to issue warrants in connection with the financing, with a total of 2,000,000 warrants with an exercise price of US$11.50 and an expiry of June 26, 2026 issued.
Funds obtained from the loan are to be used for the retrofit of the firms 5.5 million square foot facility in California, as well as for general corporate purposes.
Glass House Brands last traded at $4.17 on the Neo.
Information for this briefing was found via Sedar and the companies mentioned. 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.
