Entourage Health
Corp. (
TSX-V:ENTG)
(OTCQX:ETRGF) (FSE:4WE)
(“
Entourage” or the “
Company”), a
Canadian producer and distributor of award-winning cannabis
products and brands, is pleased to announce it has successfully
closed the second $15 million tranche of its upsized credit
facility (the “
Credit Facility”) with an affiliate
of the LiUNA Pension Fund of Central and Eastern Canada
(“
LPF”), as announced on October 31, 2022. The
Credit Facility will be used by Entourage for general working
capital purposes as the Company continues to execute its commercial
goals to achieve profitable growth by the end of 2023.
Amended and Restated Credit Agreement
Concurrent with the closing, the Company and LPF
entered into an amended and restated credit agreement (the
“ARCA”) in connection with the Credit Facility,
which reflects amendments to the Credit Facility up to and
including the date of the ARCA, as well as revised financial
covenants consistent with the amendments to the Company’s senior
secured credit agreement; namely, (i) the EBITDA target covenant
was modified to reflect the Company’s updated strategic plan as
announced by the Company on November 15, 2022, (ii) the liquidity
covenant was amended to provide that the Company must maintain
liquidity coverage of not less than $5 million at all times, and
(iii) additional security in the form of $2 million must be
maintained in a blocked account held by the senior lender, which
can be applied against the Company’s senior secured credit facility
in certain events.
Credit Facility Terms
The Credit Facility continues to bear an
interest rate of 15.25% with the option, at the Company’s
discretion, to capitalize interest in lieu of cash payments of
interest and is set to mature on December 31, 2024. The Credit
Facility is secured by the assets of the Company and its
subsidiaries, including the Company’s production facilities, and
contains customary financial and other covenants, as well as
typical conditions precedent for a transaction of this nature.
LPF’s security under the Credit Facility is in the second position
to the Company’s senior creditor.
Related Party Transaction
LPF is an insider of the Company as it owns
greater than 10% of the common shares of the Company. Accordingly,
the amending of the Credit Agreement represents a “related party
transaction” under Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions (“MI
61-101”). The Company is relying on the exemption from
minority shareholder approval requirements under MI 61-101 as the
Credit Facility is considered a non-equity loan as described under
Section 5.7(f) of MI 61-101, and obtained by the Company on
reasonable terms that are no less advantageous to the Company than
if the Credit Facility was obtained from an arm’s length party. The
funds borrowed under the Credit Facility are not convertible into
or repayable by the issuance of equity or voting securities of the
Company. The material change report will not be filed more than 21
days prior to the entering into of the amended Credit Agreement due
to the timing of the announcement and closing thereof occurring in
less than 21 days.
A copy of the ARCA will be available under the
Company’s profile on SEDAR at www.sedar.com.
Visit Entourage’s website here to access the
latest Company updates.
About Entourage Health
Corp.Entourage Health Corp. is the publicly traded parent
Company of Entourage Brands Corp. and CannTx Life Sciences Inc.,
licence holders producing and distributing cannabis products for
both the medical and adult-use markets. The Company owns and
operates a state-of-the-art hybrid greenhouse and processing
facility located on 158-acres in Strathroy, ON and a fully licensed
26,000 sq. ft. Aylmer, ON processing facility. With its Starseed
Medicinal medical-centric brand, Entourage has expanded its
multi-channeled distribution strategy. Starseed’s industry-first,
exclusive partnership with LiUNA, the largest construction union in
Canada, along with employers and union groups complements
Entourage’s direct sales to medical patients. With the launch of
Syndicate, Entourage now hosts another unique medical marketplace
that offers patients a collective of Canadian micro-cultivators’
products, along with Entourage’s family of brands. Entourage’s
elite adult-use product portfolio includes Color Cannabis and
Saturday Cannabis – sold across eight provincial distribution
agencies. It is the exclusive Canadian producer and distributor of
award-winning U.S.-based wellness brand Mary’s Medicinals sold in
both medical and adult-use channels. Under a collaboration with The
Boston Beer Company subsidiary, Entourage is also the exclusive
distributor of cannabis-infused beverages ‘TeaPot’ in Canada, which
launched in summer 2022, starting in select provinces.
For more information, please visit us at
www.entouragehealthcorp.com
Follow Entourage and its brands on LinkedIn
Twitter: Entourage, Color Cannabis, Saturday
Cannabis, Starseed & Syndicate
Instagram: Entourage, Color Cannabis, Saturday
Cannabis, Starseed, & Syndicate
For Investor & Media
Enquiries: Catherine FlamanSenior Director, Communications
& Corporate
Affairs416-910-0279Catherine.flaman@entouragecorp.com
Forward Looking Information
This press release contains "forward-looking information" within
the meaning of applicable Canadian securities legislation which are
based upon Entourage's current internal expectations, estimates,
projections, assumptions and beliefs and views of future events.
Forward-looking information can be identified by the use of
forward-looking terminology such as "expect", "likely", "may",
"will", "should", "intend", "anticipate", "potential", "proposed",
"estimate" and other similar words, including negative and
grammatical variations thereof, or statements that certain events
or conditions "may", "would" or "will" happen, or by discussions of
strategy. Forward-looking information included in this press
release includes, but is not limited to, statements with respect of
the Company’s anticipated achievement of profitability.
The forward-looking information in this news
release is based upon the expectations, estimates, projections,
assumptions, and views of future events which management believes
to be reasonable in the circumstances. Forward-looking information
includes estimates, plans, expectations, opinions, forecasts,
projections, targets, guidance or other statements that are not
statements of fact. Forward-looking information necessarily involve
known and unknown risks, including, without limitation, risks
associated with general economic conditions; adverse industry
events; loss of markets; future legislative and regulatory
developments; inability to access sufficient capital from internal
and external sources, and/or inability to access sufficient capital
on favourable terms; the cannabis industry
in Canada generally; the ability of Entourage to
implement its business strategies; the COVID-19 pandemic;
competition; crop failure; and other risks.
Any forward-looking information speaks only as
of the date on which it is made, and, except as required by law,
Entourage does not undertake any obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise. New factors emerge from
time to time, and it is not possible for Entourage to predict all
such factors. When considering this forward-looking information,
readers should keep in mind the risk factors and other cautionary
statements in Entourage’s disclosure documents filed with the
applicable Canadian securities regulatory authorities on SEDAR at
www.sedar.com. The risk factors and other factors noted in the
disclosure documents could cause actual events or results to differ
materially from those described in any forward-looking
information.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS
REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR
THE ADEQUACY OR ACCURACY OF THIS RELEASE
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