EDMONTON, Alberta, Feb. 10, 2020 (GLOBE NEWSWIRE) -- Radient Technologies Inc. (“Radient” or the “Company”) (TSX Venture: RTI; OTCQX: RDDTF), a global commercial manufacturer of high quality cannabinoid-based ingredients, formulations and products, is pleased to announce a total financing package of up to CAD $15,400,000 through the issuance of up to $10.4 million of unsecured convertible notes (the “Notes”) and up to $5 million of unsecured debentures (the “Debentures”).
$10.4 Million Note Financing with Institutional Investor
Radient has entered into a non-binding Letter of Intent (the LOI”) with an institutional investor to subscribe for up to CAD $10,400,000 of convertible notes (the “Notes”). Attached to the Notes will be share purchase warrants with the terms described below (the “Warrants”).
The Notes and accompanying Warrants shall be issuable in separate tranches (each a "Tranche"). The Notes shall be convertible into, and the Warrants shall be exercisable for, common shares ("Common Shares") in the capital of the Company, at prices to be determined at the closing of each Tranche.
The Company shall issue the Notes in the principal amount of $2,000,000 for the two initial tranches (the "Initial Tranche") and shall issue Notes in the principal amount of $800,000 for each subsequent Tranche (each, a "Subsequent Tranche") based on a liquidity multiple and, in respect of each Tranche, accompanying Warrants, as described herein. The subscription price for each Note is 95% of its face value and the Notes shall bear no interest and the maturity date of the Notes shall be for a month.
The conversion price of the Notes will be based on the closing volume weighted average trading price at the time preceding signing. The First Tranche and each Subsequent Tranche will also include Warrants exercisable for a period of one year for such number of Common Shares as is equal to 30% of the total commitment The exercise price of the Warrants will be determined at each closing and will be priced at a minimum 5% premium to the applicable conversion price for such Tranche.
There will be no maintenance fees paid and an 8% commitment fee will be paid in shares for the total commitment. The closing of this transaction is subject to due diligence, regulatory approvals including approval of the TSX Venture Exchange (“TSXV”) and execution of definitive documentation.
CAD $5 Million Debenture Financing
In addition to the above, Radient announces a CAD $5 million non-brokered debenture financing (the “Debenture Financing”). The Debentures are unsecured and have an interest rate of 15% per annum. The Debentures will mature on the date that is the 12-month anniversary from the Closing Date (the “Maturity Date”). The Company will issue to the Debenture holders such number of common share purchase warrants (the “Warrants”) equal to 50% of the principal value of the Debentures. Each Warrant will be exercisable into one common share of the Company at an exercise price of CAD $0.70 per share and have a 24-month expiry from the Closing Date. The Debenture Financing is expected to close in tranches and is subject to TSXV approval.
The Company plans to use the proceeds from the both financings for growth initiatives and for general working capital purposes.
Denis Taschuk, President & CEO of Radient commented, “We are pleased to have this financing along with the sale/leaseback in place as it will allow us to continue along our current growth trajectory, which includes the completion of the building construction of our 89,000 sq ft Edmonton III facility. In addition, the access to working capital that this financing provides gives us a strong foundation as we continue to accelerate our ‘Cannabis 2.0’ initiatives.”
Corporate Update:
Cannabis 2.0 Initiatives
As the Canadian Cannabis industry prepares for Cannabis 2.0 product introductions the Company is well placed to support industry participants through its own product offerings. Within the Company's near-term product pipeline is a range of intermediate, white-label, and formulated offerings to support prospective customers' Cannabis 2.0 initiatives. These offerings range from resins and high purity distillates to stable infusions and emulsions, all of which enable the development of food and beverage, vaping, and personal care products both at large and "craft" scale. The initial intermediate products from this pipeline are expected to launch in February 2020, followed by additional oil and oil capsule products, THC concentrates, and topical products over the subsequent two to three months.
Sale-Leaseback Transaction
Further to the news release dated January 14, 2020, Radient is pleased to announce progress on the sale leaseback transaction. This is part of an asset-backed financing incorporating both the land and buildings and equipment financing. As per the binding LOI previously announced on January 14, 2020, 223801 Alberta Ltd (the “Purchaser’) will purchase the land and buildings comprising the Company’s Edmonton I, II and III facilities (the “Land’) for approximately CAD $20 million. Due diligence is substantially complete and the parties are proceeding to finalizing definitive documentation. The Company continues to work on arranging additional equipment financing (the “Equipment Financing”) that was initially announced in Radient’s press release dated November 29, 2019. The Equipment Financing is expected to incorporate the equipment contained within the Edmonton I, II, and III facilities that will include equipment upgrades for high purity distillates, resins, downstream finishing and processing. Radient will update shareholders when the terms of this Equipment Financing have been finalized. The purchase and sale agreement is expected to close in calendar Q2, 2020.
About Radient
Radient Technologies is a commercial manufacturer of high quality cannabinoid based formulations, ingredients and products. Utilizing a proprietary extraction and downstream processing platform that recovers up to 99% of cannabinoids from the cannabis plant, Radient develops specialty products and ingredients that contain a broad range of cannabinoid and terpene profiles while meeting the highest standards of quality and safety. Please visit www.radientinc.com for more information.
SOURCE: Radient Technologies Inc.
Contact: Caitlin Cheadle, Director of Communications: ccheadle@radientinc.com
Forward Looking Information:
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, without limitation, statements regarding the closing of the proposed Note and debenture financings and the sale and leaseback transaction, the growth of the Company’s business operations; the construction of the Company’s facilities; the Company’s ability to grow its business in the cannabis sector and the Company’s future plans. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Radient, as the case may be, to be materially different from those expressed or implied by such forward-looking information. Although Radient has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Radient does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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