Creso Pharma to Raise Millions via a Series of Secured Loans

| By | Creso Pharma, Loan
0
53

On 11th April 2019, the company announced that it has received commitments to raise $5.35 million through a series of secured loans from sophisticated and professional investors. Some of the investors who gave firm commitments are Parry Capital, Penn Financial and Pheakes Pty Ltd. The interest payable on the loan is 15% per annum and will be paid on a quarterly basis.

As it will be a secured loan, it will be backed by general security granted over the cannabis cultivation facility located in Nova Scotia, Canada. This facility is owned by Mernova Medical Inc which is a wholly owned subsidiary of the company and a property mortgage over land held by Mernova.

The company is expecting to repay the principal amount of loan through the issue of 107 secured convertible notes to the debtholders. It is seeking the shareholders’ approval for the same in the coming Annual General Meeting (AGM) of the company which is to be held in May 2019. Some of the terms and conditions of the convertible notes are;

  • Each convertible note will have a face value of $50,000.
  • An annual premium of 15% would be payable on a quarterly basis.
  • The maturity period of the convertible notes will be 12 months.
  • The face value of each convertible note is convertible into shares at the conversion price of $0.50, together with three free attaching listed CPHO options for every two shares issued. The investor may elect for the conversion of shares at any time from the date of issue until the maturity date.
  • In the case, the investor chooses not to convert the notes into shares before, or on the maturity date then the company must repay the face value of the convertible notes together with any accrued interest on the maturity date.
  • The convertible notes will be extinguished if and when the Convertible Notes are converted or otherwise repaid in full.

The proceeds from the loan will be used to improve the sales and marketing of CBD based products in Europe and Canada. A debt of approximately $ 1 million is also intended to be repaid with the proceeds. It is also looking to increase the cannabis cultivation and production build at the Mernova facility, and finally, the working capital requirements of the company will also be fulfilled by the loan amount.

SOURCE: kalkinemedia.com
SHARE
GMP news
Pharmaceutical industry News and events. Technology transfer and contract manufacturing of medicines.