MTL Cannabis closes $27-million credit facility

Mr. Michael Perron reports MTL CANNABIS CORP. CLOSES $27 MILLION CREDIT FACILITY WITH CANADIAN SCHEDULE 1 BANK MTL Cannabis Corp. has closed a credit agreement with a leading Canadian Schedule 1 bank for an aggregate of approximately $27-million. The purposes of the credit facility are to: (i) assist with growth capital expenditures; (ii) finance working capital needs for the company; and (iii) refinance pre-existing debts. The credit facility is composed of: (i) an uncommitted demand revolving credit facility of up to $4-million, margined against the eligible account receivables of the company; (ii) a committed non-revolving term credit facility available by way of a single drawdown in an amount equal to $6.75-million with a contractual term of three years; (iii) a committed non-revolving term credit facility available by way of a single drawdown in an amount equal to $12.15-million, with a contractual term of three years; and (iv) an uncommitted delayed draw non-revolving term credit facility available by way of one or more drawdowns in a total aggregate amount of $4.12-million. The credit facility will bear an interest rate of prime or adjusted-term Canadian overnight repo rate average plus an applicable margin. The credit facility is secured against: (i) all of the present and after-acquired undertakings, property and assets of the company and its material operating subsidiaries; and (ii) the property located at 551 Rue Saint-Marc, Louiseville, Que., by a first-ranking collateral mortgage. "We are incredibly excited to partner with the team to finance the continued growth of the business and strengthen our balance sheet," said Michael Perron, chief executive officer of the company. "We fully appreciate the confidence that the bank has in our management team and the business we have built, and we look forward towards repaying that trust with continued performance as we grow together in the coming years." The existing debts being refinanced under the credit facility were derived solely from the predecessor business of Canada House Cannabis Corp. and incurred prior to the completion of the business combination of Canada House Cannabis Corp. and Montreal Cannabis Medical Inc., and include the entirety of the $8,316,830.21 in amounts payable pursuant to the convertible debenture issued on Aug. 4, 2020, as amended, to Archerwill Investments Inc., and delivery of all remaining related 14,466,568 prepayment warrants with an exercise price 57.49 cents; $10,041,094.94 in amounts payable pursuant to the historical acquisition of IsoCanMed Inc. that closed June 12, 2020; and approximately $575,000 in amounts payable pursuant to the secured debentures issued on Dec. 5, 2017. "We view the refinancing of the legacy Canada House creditors as the final chapter in the closing of the business combination between Canada House and MTL Cannabis," added Richard Clement, chairman and co-founder of MTL Cannabis. "We are extremely proud of management's financial stewardship of the combined company and the turnaround of our financial position that this milestone symbolizes." About MTL Cannabis Corp. MTL Cannabis is the parent company of Montreal Medical Cannabis Inc., a licensed producer operating from a 57,000-square-foot licensed indoor grow facility in Pointe Claire, Que.; Abba Medix Corp., a licensed producer in Pickering, Ont., that operates a leading medical cannabis marketplace; IsoCanMed Inc., a licensed producer in Louiseville, Que., growing best-in-class indoor cannabis, in its 64,000-square-foot production facility; and Canada House Clinics Inc., operating clinics across Canada that work directly with primary care teams to provide specialized cannabinoid therapy services to patients suffering from simple and complex medical conditions. As a flower-first company built for the modern street, MTL Cannabis uses proprietary hydroponic growing methodologies supported by handcrafted techniques to produce products that are truly craft for the masses. MTL Cannabis focuses on craft quality cannabis products, including lines of dried flower, prerolls and hash marketed under the MTL Cannabis, Low Key by MTL and R'belle brands for the Canadian market through nine distribution arrangements with various provincial cannabis distributors. MTL Cannabis has also developed several export channels for bulk and unbranded good agricultural collection practice quality cannabis. It is the company's goal for Abba Medix Corp. to become the leading distributor of medical cannabis in Canada and for Canada House Clinics to be the leading Canadian provider of medical cannabis clinic services. We seek Safe Harbor.