CALGARY,
AB, June 22, 2022 /CNW/ - High Tide
Inc. ("High Tide" or the
"Company") (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA), a
leading retail-focused cannabis company with bricks-and-mortar as
well as global e-commerce assets, is pleased to announce that it
has closed a short-term debt financing from an arm's length credit
provider (the "Lender") for CAD$5
million (the "Loan"). The Company has chosen to
proceed with a small debt facility at this time as the Company's
proposed non-dilutive credit facilities with ConnectFirst Credit
Union for CAD$30 million (as
previously announced on April 18,
2022) has been delayed until July
2022. The Company issued the Lender a non-convertible
subordinated secured debenture of the Company (the
"Debenture").1 The Debenture
matures on June 21, 2023 and bears
interest at a fixed rate of 10% per annum, payable quarterly. The
Company shall have a right to prepay part of or the entire
principal amount of the Debentures at par plus accrued and unpaid
interest at any time by providing a minimum of 5 days and a maximum
60 days notice to the Lender.
"Our first of its kind discount club model is clearly working,
as evidenced by rapid same store sales growth, and has now defined
us as the clear leader in the Canadian cannabis retail landscape as
it continues to gain popularity in communities large and small. We
want to continue building on this momentum by setting up additional
Canna Cabana locations in all Canadian provinces where we operate
with a goal of reaching at least 150 locations by the end of this
year," said Raj Grover, President and Chief Executive Officer of
High Tide. "Our due diligence with Connect First Credit Union
is ongoing, and their facility is expected to close sometime in
July. In the meanwhile, given our growth prospects, inbound
opportunities and the current state of capital markets, we believe
that securing this additional $5
million in debt is the most prudent approach for our
shareholders," added Mr. Grover.
As part of the Loan, the Company issued to the Lender
700,000 warrants (the "Warrants"). Each Warrant entitles the
Lender to purchase one common share of the Company (each a
"Common Share") at an exercise price of CAD$4.98 per Common Share until June 21, 2023. The term of the Loan may be
extended within 90 days prior to the maturity date. If the parties
mutually agree to extend for an additional 12 months, the Warrants
will also extend for an additional 12 months, subject to approval
from the TSX Venture Exchange (the "TSXV"). The net proceeds
of the Loan will be used to fund growth initiatives, general
corporate purposes, and working capital. The Loan is subject to
final approval by the TSXV.
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1 The subordinated debenture
will be secured by a general security agreement over all of the
Canadian assets of the Company and certain subsidiaries, and shall
not include security over the Company's assets held outside of
Canada.
|
ABOUT HIGH TIDE
High Tide is a leading retail-focused cannabis company with
bricks-and-mortar as well as global e-commerce assets. The Company
is the largest Canadian retailer of recreational cannabis as
measured by revenue, with 126 current locations spanning
Ontario, Alberta, Manitoba, and Saskatchewan. High Tide was featured in the
third annual Report on Business Magazine's ranking of Canada's Top Growing Companies in 2021 and was
named as one of the top 10 performing diversified industries stocks
in the 2022 TSX Venture 50™. The Company is also North America's first and only cannabis
discount club retailer, featuring Canna Cabana, Meta Cannabis Co.,
and Meta Cannabis Supply Co. banners, with additional locations
under development across the country. High Tide's portfolio also
includes retail kiosk and smart locker technology – Fastendr™. High
Tide has been serving consumers for over a decade through its
established e-commerce platforms including Grasscity.com,
Smokecartel.com, Dailyhighclub.com, and Dankstop.com and more
recently in the hemp-derived CBD space through Nuleafnaturals.com,
FABCBD.com, BlessedCBD.co.uk, and BlessedCBD.de, as well as its
wholesale distribution division under Valiant Distribution,
including the licensed entertainment product manufacturer Famous
Brandz. High Tide's strategy as a parent company is to extend and
strengthen its integrated value chain, while providing a complete
customer experience and maximizing shareholder value.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
for the adequacy or accuracy of this release.
For more information about High Tide, please visit
www.hightideinc.com, its profile page on SEDAR at www.sedar.com,
and its profile page on EDGAR at www.sec.gov.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Certain information in this news release constitutes
forward-looking statements under applicable securities laws. Any
statements that are contained in this news release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified by
terms such as "may", "should", "anticipate", "expect", "potential",
"believe", "intend" or the negative of these terms and similar
expressions. Forward-looking statements in this news release
include statements relating to: the Company securing the Loan and
proposed credit facilities on the terms and within the timelines
set out in this news release; the use of proceeds from the Loan and
proposed credit facilities being utilized as outlined herein; the
anticipated effects of the Loan and proposed credit facilities on
the business and operations of the Company; the Company receiving
all necessary approvals, including TSXV approval; the Company
adding the number of additional cannabis retail store locations the
Company proposes to add to the Company's business upon the
timelines indicated herein; and the Company's plans to extend and
strengthen its integrated value chain, while providing a complete
customer experience and maximizing shareholder
value.
Forward-looking information in this press release are
based on certain assumptions and expected future events, namely:
current and future members of management will abide by the
Company's business objectives and strategies from time to time
established by the Company; the Company will retain and supplement
its board of directors and management, or otherwise engage
consultants and advisors having knowledge of the industries (or
segments thereof) within which the Company may from time to time
participate; the Company will have sufficient working capital and
the ability to obtain the financing required in order to develop
and continue its business and operations; the Company will continue
to attract, develop, motivate and retain highly qualified and
skilled consultants and/or employees, as the case may be; no
adverse changes will be made to the regulatory framework governing
cannabis, taxes and all other applicable matters in the
jurisdictions in which the Company conducts business and any other
jurisdiction in which the Company may conduct business in the
future; the Company will be able to generate cash flow from
operations, including, where applicable, distribution and sale of
cannabis and cannabis products; the Company will be able to execute
on its business strategy as anticipated; the Company will be able
to meet the requirements necessary to obtain and/or maintain
authorizations required to conduct the business; general economic,
financial, market, regulatory, and political conditions, including
the impact of the COVID-19 pandemic, will not negatively affect the
Company or its business; the Company will be able to successfully
compete in the cannabis industry; cannabis prices will not decline
materially; the Company will be able to effectively manage
anticipated and unanticipated costs; the Company will be able to
conduct its operations in a safe, efficient and effective manner;
general market conditions will be favourable with respect to the
Company's future plans and goals; Cabana Club loyalty program
membership will continue to increase; the Company will add the
additional cannabis retail store locations to the Company's
business and remain on a positive growth trajectory; the Company
will complete the development of its cannabis retail stores; the
Company will secure the Loan and proposed credit facilities (and
will have the ability to obtain all requisite approvals) on the
terms and within the timelines anticipated; the use of proceeds
from the Loan and proposed credit facilities will be utilized as
outlined herein; and the Company will utilize the Loan and proposed
credit facilities as outlined herein.
These statements involve known and unknown risks,
uncertainties and other factors, which may cause actual results,
performance or achievements to differ materially from those
expressed or implied by such statements, including but not limited
to: the Company's inability to attract and retain qualified members
of management to grow the Company's business and its operations;
unanticipated changes in economic and market conditions (including
changes resulting from the COVID-19 pandemic) or in applicable
laws; the impact of the publications of inaccurate or unfavourable
research by securities analysts or other third parties; the
Company's failure to complete future acquisitions or enter into
strategic business relationships; interruptions or shortages in the
supply of cannabis from time to time available to support the
Company's operations from time to time; unanticipated changes in
the cannabis industry in the jurisdictions within which the Company
may from time to time conduct its business and operations,
including the Company's inability to respond or adapt to such
changes; the Company's inability to secure or maintain favourable
lease arrangements or the required authorizations necessary to
conduct the business and operations and meet its targets; the
Company's inability to secure desirable retail cannabis store
locations on favourable terms; risks relating to projections of the
Company's operations; the Company's inability to effectively manage
unanticipated costs and expenses, including costs and expenses
associated with product recalls and judicial or administrative
proceedings against the Company; risk that Cabana Club loyalty
program membership will decrease and/or plateau; risk that the
Company will be unable to add additional cannabis retail store
locations to the Company's business and remain on a positive growth
trajectory; risks that the Company will be unable to complete the
development of any or all of its cannabis retail stores; and risk
that the Company will be unable to secure the Loan and/or proposed
credit facilities and/or will be unable to utilize the Loan and/or
proposed facilities on the terms and within the timelines
anticipated.
Readers are cautioned that the foregoing list is not
exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking statements, as there can be no
assurance that the plans, intentions or expectations upon which
they are placed will occur. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated.
Forward-looking statements contained in this press
release are expressly qualified by this cautionary statement and
reflect the Company's expectations as of the date hereof and are
subject to change thereafter. The Company undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, estimates or opinions, future events or
results or otherwise or to explain any material difference between
subsequent actual events and such forward-looking information,
except as required by applicable law.
This news release does not constitute an offer to sell or
a solicitation of an offer to buy any of the securities in
the United States of America. The
securities have not been and will not be registered under the
United States Securities Act of 1933 (the "1933 Act") or any state
securities laws and may not be offered or sold within the United States or to U.S. Persons (as
defined in the 1933 Act) unless registered under the 1933 Act and
applicable state securities laws, or an exemption from such
registration is available.
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SOURCE High Tide Inc.