Aleafia Health Closes $10M Credit Facility, Improves Financial Flexibility To Continue Sales Growth

Aleafia Health Inc. AH ALEAF has raised $10 million to pursue accretive growth opportunities.

Based in Toronto, the company announced Monday the closing of a senior secured term, non-revolving credit facility, which carries a 12-month term, with an option for early repayment and accrues interest at a rate of 12% annually.

Aleafia granted 1 million of its common share purchase warrants to the lender as part of the consideration for the credit facility.

Each warrant gives the holder the right to purchase one of Aleafia’s common shares at 32 cents until August 20, 2023.

The warrants vest in equal installments of 250,000 warrants beginning on November 20, 2021, and subsequently every three months thereafter, subject to adjustment in certain circumstances, the company said.

“This Credit Facility provides us with the greater financial flexibility to pursue strategic opportunities and continue the robust sales growth realized during our most recent quarter,” Geoffrey Benic, the company’s CEO, disclosed. “This transaction improves our capital structure and provides a lower cost of capital that we believe directly benefits our shareholders.”

The company also said that the credit facility significantly improves liquidity by growing cash and marketable securities balance to $25 million.

In addition, it plans to utilize net proceeds to improve the availability of products in the recreational cannabis business as well as boost operations at its manufacturing facility in Paris, Ontario.

The company recently reported its financial results for the three and six months ended June 30, revealing significant sequential growth in cannabis net revenue, which hit $9.6 million in the second quarter of 2021.

Price Action

Aleafia’s shares traded 4.55% higher at $0.23 per share after market close on Friday.

Photo: Courtesy of Michael Longmire on Unsplash