This news release constitutes a "designated
news release" for the purposes of the Company's
prospectus supplement dated December 3,
2021 to its short form base shelf prospectus dated
April 22, 2021
CALGARY,
AB, Aug. 18, 2022 /PRNewswire/ - 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,
announced today that it has entered into a binding commitment
letter with Connect First Credit Union Ltd. ("connectFirst")
for a $19 million credit facility
with an initial 5-year term (the "Credit Facility"), at
connectFirst's floor interest rate. The terms of the Credit
Facility were renegotiated with connectFirst to provide a larger
immediately-accessible facility for High Tide, with a smaller total
commitment from connectFirst initially - which High Tide expects
will grow over time. Upon closing the Credit Facility with
connectFirst, the Company expects to use the proceeds to fund
continued organic growth, general working capital requirements, and
potential future M&A activities.
"I am very happy to provide this positive update today. Our
business remains on a strong footing and we continue to gain
traction as the leader in the Canadian cannabis retail market. Once
in place, this facility will help us continue to propel our growth
in an increasingly non-dilutive fashion. Through our conversations
with connectFirst, we expect that this line will expand in tandem
with our business growth, as we continue to execute on our conveyed
business plan. This will enable us to capitalize on attractive
M&A and organic opportunities in North America and Europe," said Raj Grover, President and Chief
Executive Officer of High Tide. "I look forward to sharing our
results and progress for our fiscal third quarter in mid-September,
and we anticipate the closing of this facility around the same
time. I remain as confident as ever in High Tide's growth
trajectory in Canada, the United States, and newly-emerging
international markets," added Mr. Grover.
"We have watched locally based High Tide execute over the last
several years. Accordingly, we are very excited about this new
partnership between High Tide and connectFirst helping to create a
more prosperous Alberta - and
beyond. Our senior debt offering will provide High Tide the capital
to continue to execute their impressive growth trajectory," said
Sourav Neogi, Relationship Manager,
Corporate & Commercial Banking, Connect First Credit Union.
COMMITMENT LETTER TERMS
- CAD$19 Million Term Debt:
Accessible on request by High Tide, blended principal and interest
payments.
- Low Interest Rate: High Tide continues to receive
industry leading interest rates that reflect the strength of its
business.
- Financial Covenants: The Credit Facility will have
a quarterly tested financial covenant of debt service coverage
ratio of not less than 1.40:1, a monthly current ratio covenant of
not less than 1.25:1, and a quarterly tested covenant of funded
debt to EBITDA ratio of not more than 3:1 beginning with the
quarter ending January 31, 2023. High
Tide's 12-month forecast projects it to be comfortably in
compliance with all financial covenants.
The Company expects to close on the Credit Facility during the
first half of September 2022, subject
to certain pre-disbursement conditions and satisfaction of other
customary conditions precedent.
ABOUT CONNECTFIRST
Connect First Credit Union Ltd., one of the largest and most
successful credit unions in Canada, is a full-service financial
institution with over $6 billion in
assets under administration. connectFirst employs 750 Albertans who
provide a range of financial products and advice in more than 40
communities across central and southern Alberta. It serves over 125,000 members
through a community-focused approach to banking.
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 139 current locations spanning
Ontario, Alberta, British
Columbia, Manitoba, and
Saskatchewan. The Company is also
North America's first cannabis
discount club retailer, under the Canna Cabana banner, which is the
single-largest cannabis retail brand in Canada 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,, BlessedCBD.de, and Amazon UK, as
well as its wholesale distribution division under Valiant
Distribution, including the licensed entertainment product
manufacturer Famous Brandz. 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™. 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.
For more information about High Tide Inc., please
visit www.hightideinc.com, its profile page on SEDAR
at www.sedar.com, and its profile page on EDGAR at
www.sec.gov.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
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: High Tide securing the Credit
Facility on the terms and within the timelines set out in this news
release; the use of proceeds from the Credit Facility being
utilized as outlined herein; the anticipated effects of the Credit
Facility on the business and operations of High Tide; the Company
utilizing the Credit Facility to complete future acquisitions; and
High Tide's plans to increase the Credit Facility.
Forward-looking information in this news release are based on
certain assumptions and expected future events, namely: High Tide
will close the Credit Facility (and will have the ability to obtain
all requisite approvals) on the terms and within the timelines
anticipated by High Tide; the use of proceeds from the Credit
Facility will be utilized as outlined herein; the Company will
utilize the Credit Facility to complete future acquisitions; High
Tide's financial condition and development plans do not change as a
result of unforeseen events; there will continue to be a demand and
market opportunity for High Tide's product offerings; current and
future economic conditions will neither affect the business and
operations of High Tide nor High Tide's ability to capitalize on
anticipated business opportunities; and High Tide will extend and
strength its integrated value chain, provide a complete customer
experience and maximize shareholder value. Although considered
reasonable by management of High Tide at the time of preparation,
these statements may prove to be imprecise and result in actual
results differing materially from those anticipated, and as such,
undue reliance should not be placed on forward-looking
statements.
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 risks associated with the cannabis and cannabidiol
industries in general; High Tide being unable to close the Credit
Facility and/or being unable to utilize the Credit Facility on the
terms and within the timelines anticipated; the inability of High
Tide to obtain requisite approvals; the inability of High Tide to
pursue more acquisitions in the future; and the inability of High
Tide to extend and strengthen its integrated value chain, while
providing a complete customer experience and maximizing shareholder
value.
Forward-looking statements, forward-looking financial
information and other metrics presented herein are not intended as
guidance or projections for the periods referenced herein or any
future periods, and in particular, past performance is not an
indicator of future results and the results of High Tide in this
press release may not be indicative of, and are not an estimate,
forecast or projection of High Tide future results. Forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement and reflect our expectations as of the
date hereof, and thus are subject to change thereafter. High Tide
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. Factors that
could cause anticipated opportunities and actual results to differ
materially include, but are not limited to, matters referred to
above and elsewhere in High Tide's public filings and material
change reports, which are and will be available on SEDAR.
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.