Christina Lake Cannabis Secures Credit and Equipment Lease
Introduction to Christina Lake Cannabis' Latest Developments
Christina Lake Cannabis Corp., a notable name in the cannabis industry, has taken significant steps to enhance its financial standing. Recently, the company announced that it has secured a credit facility alongside a leasing agreement for equipment, aimed at improving its operational capabilities and strategic growth.
Details of the Credit Facility
The newly established credit facility allows Christina Lake Cannabis access to a revolving line of credit up to $1,500,000. This facility, which has a two-year term, carries an interest rate of 15% per annum on any outstanding amounts borrowed. Notably, the lender—an entity managed by Mervin Boychuk, a director of the company—has the provision to demand repayment with 30 days’ notice. Importantly, the company can repay the facility at any time without incurring penalties.
Security and Terms of the Credit Facility
The credit facility is secured by a second mortgage on the company’s property and a general security agreement, establishing a solid foundation for this financial support. It's essential to highlight that this facility does not convert into other company securities, ensuring that existing shareholders' stakes remain unaffected.
Leasing Agreement for Equipment
Alongside the credit facility, Christina Lake Cannabis has negotiated a lease agreement for essential equipment. This agreement spans a period of 18 months with a monthly fee of $4,683.39 plus applicable taxes. At the conclusion of this lease, the company holds the option to purchase the equipment, reflecting its commitment to maintaining efficient operations.
Related Party Transactions
Given that Mr. Boychuk is a director and thus a related party, these agreements qualify as related party transactions. The company is leveraging exemptions from formal valuation under Multilateral Instrument 61-101, as the values of these transactions do not exceed 25% of the company's market capitalization, thus complying with regulatory requirements.
About Christina Lake Cannabis Corp.
Operating under strict regulations, Christina Lake Cannabis is licensed for cannabis production under the Cannabis Act. Its operations are notable for a vast 32-acre facility featuring over 950,000 square feet dedicated to outdoor growing. The company is dedicated not only to cultivating high-quality cannabis flower but also focuses on extraction practices to provide superior products for its B2B clientele.
Production and Facilities
The company boasts a diverse portfolio of facilities, including a 342-acre property designated for licensed outdoor grow space and additional infrastructure, such as greenhouses and drying rooms. This strategic positioning enhances their production capabilities, reinforcing their market presence.
Conclusion
The recent arrangements exemplify Christina Lake Cannabis Corp.'s dedication to solidifying its financial structure while concurrently expanding operational capabilities. With the backing of a strategic credit facility and advantageous leasing options, CLC is well-positioned to pursue growth in a competitive landscape.
Frequently Asked Questions
What is the purpose of the new credit facility?
The credit facility of $1,500,000 is aimed at enhancing the financial flexibility of Christina Lake Cannabis, allowing for operational improvements and growth initiatives.
Who is the lender for the credit facility?
The lender is an entity controlled by Mervin Boychuk, who is also a director of Christina Lake Cannabis, thus categorizing this transaction as a related party agreement.
What are the terms of the lease agreement?
The lease agreement spans 18 months with a monthly cost of $4,683.39. The company retains the option to purchase the equipment afterwards, providing an opportunity for ownership.
How does this affect existing shareholders?
Since the credit facility is secured and non-convertible, existing shareholders’ stakes in Christina Lake Cannabis are maintained, without dilution resulting from these transactions.
What strategies does Christina Lake Cannabis employ for production?
Christina Lake Cannabis emphasizes high-quality outdoor cultivation and efficient extraction processes, catering primarily to a B2B client base seeking quality cannabis products.
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