FinCanna Capital (CSE: CALI) (OTCQB: FNNZF), a royalty company for the U.S. licensed medical cannabis industry, this morning announced that it has agreed to a restructured agreement (“RA”) with Cultivation Technologies Inc. (“CTI”) due to CTI’s re-focused business strategy towards extraction, manufacturing, and brand development. Per the agreement, CTI will pay FinCanna approximately $3.9 million as repayment of CTI’s outstanding secured loan. FinCanna will also receive payments equal to 3.44% of the consolidated topline revenue of CTI in perpetuity. CTI recently entered into a sale escrow agreement for $4 million for its 6-acre property in Coachella, California which is expected to close in December 2018 or January 2019 with anticipated net proceeds of approximately $3.9 million after transaction costs will be paid to FinCanna. CTI has the option to increase its cash payment to FinCanna before December 31, 2018. The payments in perpetuity of 3.44% would be modified based on total cash payments. Additionally, FinCanna will continue to earn 50% of the profits of CTI’s Interim Extraction and Manufacturing Facility that is expected to stay in operation until June 2019. FinCanna will also receive certain purchase warrants in CTI’s next equity financing and will hold customary security over its overriding royalty.
“The new agreement is a very positive move forward for FinCanna and allows CTI to finance and execute on its refocused business to create long-term value for both parties. We are very bullish on CTI’s new strategy and anticipate a much quicker path to royalty revenue to FinCanna without any further financing obligations. Lastly, the expected cash proceeds from CTI of $3.9 million will provide us with additional non-dilutive funds to expand our royalty investment portfolio with a goal to leverage additional verticals in the U.S licensed cannabis markets that are in need of financing for rapid growth,” FinCanna Capital President and CEO Andriyko Herchak stated in the news release.
To view the full press release, visit http://cnw.fm/rz8JB
About FinCanna Capital Corp.
FinCanna provides financing to top-tier companies in the licensed medical cannabis industry in exchange for a royalty on revenues. FinCanna, led by a team of finance and industry experts, is building its diversified portfolio of royalty investments in scalable, best-in-class projects and companies in U.S. legal states, with a focus on California. For additional information visit www.FinCannaCapital.com
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