Origin House (CSE: OH) announced this morning that it had secured an additional short term loan from Opaskwayak Cree Nation, an Aboriginal band based in Northern Manitoba. The band had originally provided short term financing for Origin House back in July following the termination of a financing by Sprott Inc.
The additional funding, which amounts to C$15 million, is to be used towards closing the merger agreement with Cresco labs (CSE: CL), for the cost of constructing and expanding Origin House’s production facility in Sonoma County, and for general corporate purposes. The same justification was used in July when Origin House borrowed an initial C$12 million from the Opaskwayak Cree Nation.
The loan, which has a 7.5% commitment fee, bears interest at a rate of 10% per annum. The loan, similar to the first from Opaskwayak, matures on December 31, 2019. As per an earlier news release, Origin House expects the arrangement with Cresco Labs to be closed by this point in time which may be the reasoning behind an additional short term loan.
As of June 30, Origin House had $14.7 million in cash, which has been on a significant decline over FY2019. The firm started the year with $69.2 million, and has seen a steady outflow as its operations continue to consume cash. $27.9 million has been consumed year to date just in operating, before further investment or financing activities have been taken into consideration.
It’s anticipated that the US$61.1 million currently held in cash by Cresco Labs will be utilized to pay off the total C$27 million that Origin House owes in short term loans to Opaskwayak.
Origin House is currently trading at $7.23 on the Canadian Securities Exchange.
Information for this briefing was found via Sedar, Cresco Labs and Origin House. 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.
