CALGARY, AB, Jan. 4, 2021 /CNW/ - Decibel Cannabis
Company Inc. (the "Company" or "Decibel") (TSXV: DB) (OTCQB:
DBCCF), is pleased to announce that on December 31, 2020 it closed its previously
announced financing with Connect First Credit Union Ltd. in respect
of $30 million of debt capital.
Financing Highlights
- Total Capital & Extended Maturity: The credit
facilities includes $28.5 million of
term debt and a $1.5 million
authorized overdraft to repay Decibel's existing debt of
$26.8 million. The credit facilities
mature 5 years from the funding date and amortize over a 10 year
term (prior debt was on average a 5 year amortization term).
- Improved Liquidity: The financing results in
$3.2 million of immediate gross
proceeds and an additional ~$1
million of principal repayment savings commencing on
December 31, 2020. The proceeds will
support Decibel's continued sales growth and working capital
requirements.
- Alignment to Operational Schedule: The credit facilities
are aligned to Decibel's operational schedule. The Company will
benefit from an interest only period on $16
million of the term debt, ending in the third quarter of
2021. Principal savings over this period will provide Decibel
flexibility and additional resources to support its growth
strategy.
- Lower Interest Rate: The committed interest rate under
the credit facilities is a 5 year fixed rate of 4.75% for the term
debt and Prime + 1.00% for the authorized overdraft. This reflects
a blended interest rate reduction of approximately 1.70%,
representing approximately $360
thousand of annual interest savings for Decibel over the
full year 2021.
- Simplification of Financial Covenants: The credit
facilities have two annually tested financial covenants, a Debt
Service Coverage Ratio of not less than 1.40:1.00, and a Debt to
Equity Ratio of not greater than 0.75:1, to commence following
Decibel's 2021 year end (December 31,
2021). The Debt to Equity ratio in subsequent years will
step down to 0.50:1 in 2022. The Credit Facilities also have a
monthly current ratio covenant of not less than 1.25:1 beginning
January 2021. Decibel's 12 month
forecast projects compliance with all financial covenants.
About Decibel
Decibel is uncompromising in the process and craftsmanship
needed to deliver the highest quality cannabis products and retail
experiences. Decibel has three production houses operating or under
development along with its wholly owned retail business, Prairie
Records. The Qwest Estate in Creston,
BC is a licensed and operating 26,000 square foot
cultivation space which produces the widely championed, rare
cultivar-focused brands Qwest and Qwest Reserve, which are sold in
six provinces across Canada.
Thunderchild Cultivation, an 80,000 square foot indoor cultivation
facility in Battleford, SK is
scheduled to be completed and licensed in 2021. The Plant,
Decibel's extraction facility, in Calgary, AB has 15,000 square feet of Health
Canada licensed extraction and product development space. This
production house will fuel the growth of our brands Qwest, Qwest
Reserve, and Blendcraft, into new and innovative product formats
like concentrates, vapes, edibles and beyond.
Neither 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.
Cautionary Statements
Forward Looking Information
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news
release. Any statement that involves discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions, future events or performance (often but not always
using phrases such as "expects", or "does not expect", "is
expected", "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts", "estimates", "believes" or
"intends" or variations of such words and phrases or stating that
certain actions, events or results "may" or "could", "would",
"might" or "will" be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements.
In this news release, forward-looking statements relate to,
among other things, Decibel's anticipated principal savings,
including the amount, date of commencement and impact thereof;
Decibel's expected compliance with its financial covenants; the
date of repayment of Decibel's ATB facility and the implied closing
date the Credit Facilities; and the anticipated completion and
licensing date of Thunderchild Cultivation. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable, are subject to known
and unknown risks, uncertainties, and other factors which may cause
the actual results and future events to differ materially from
those expressed or implied by such forward-looking statements. Such
factors include, but are not limited to: risks relating to delays,
regulatory changes and impacts, capital requirements, construction
impacts, displacement requirements and unforeseen requirements
resulting from the COVID-19 pandemic, the ability to obtain or
maintain licences to retail cannabis products; review of the
Company's production facilities by Health Canada and receipt or
maintenance of licences (including any amendments thereto) from
Health Canada in respect thereof; future legislative and regulatory
developments involving cannabis; inability to access sufficient
capital from internal and external sources, and/or inability to
access sufficient capital on favourable terms; the labour market
generally and the ability to access, hire and retain employees;
general business, economic, competitive, political and social
uncertainties; the satisfaction of conditions precedent under the
Company's credit facilities; timing and completion of construction
and expansion of the Company's production facilities and retail
locations; and the delay or failure to receive board, regulatory or
other approvals, including any approvals of the TSX Venture
Exchange, as applicable. There can be no assurance that such
statements 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
the forward-looking statements and information contained in this
news release. Except as required by law, the Company assumes no
obligation to update the forward-looking statements of beliefs,
opinions, projections, or other factors, should they change, except
as required by law.
This press release contains future-oriented financial
information and financial outlook information (collectively,
"FOFI") about the Company's prospective results of operations
including, without limitation, the expected results of its costs
cutting measures and, which are subject to the same assumptions,
risk factors, limitations, and qualifications as set forth
above. Readers are cautioned that the assumptions used in the
preparation of such information, although considered reasonable at
the time of preparation, may prove to be imprecise and, as such,
undue reliance should not be placed on FOFI. The Company's actual
results, performance or achievement could differ materially from
those expressed in, or implied by, these FOFI, or if any of them do
so, what benefits the Company will derive therefrom. The Company
has included the FOFI in order to provide readers with a more
complete perspective on the Company's future operations and such
information may not be appropriate for other purposes.
These forward-looking statements and FOFI are made as of the
date of this press release and the Company disclaims any intent or
obligation to update any forward-looking statements and FOFI,
whether as a result of new information, future events or results or
otherwise, other than as required by applicable securities
laws.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/decibel-announces-closing-of-non-dilutive-30-million-debt-financing-301200040.html
SOURCE Decibel Cannabis Company Inc.