Cannabis edibles producer Indiva Limited NDVA (OTCQX: NDVAF) confirmed Tuesday that it has received an additional $8.5 million in available funds from Canadian cannabis company Sundial Growers Inc. (NASDAQ: SNDL). The two companies amended the terms of their existing non-revolving term loan facility bringing the total principal amount of the term loan including accrued and deferred interest to $19.75 million.
Back in February Sundial made a $22 million strategic investment in Indiva through the deal, which required a brokered private placement directed by ATB Capital Markets Inc. of 25 million Indiva shares with a price of 44 cents per share, to collect gross proceeds of $11 million and a non-revolving loan facility to Indiva in the amount of $11 million.
The amended term loan matures on February 23, 2024, or upon an event of default, and bears an interest rate of 15% per annum. 100% of accrued interest is payable in cash and accrued on a monthly basis.
In addition, Indiva reported it has signed a settlement and termination agreement with Dycar Pharmaceuticals Ltd. terminating all matters between them in relation to the licensing and manufacturing agreement, entered into on February 18, 2020.
The company plans to use the additional funds to satisfy its obligations under the termination agreement, under which Dycar has received total cash consideration of $8.38 million and the manufacturing agreement has been terminated.
Furthermore, Indiva announced the launch of various new products and seasonal offerings that will hit the shelves this year, including Wana Sour Gummies, Bhang Chocolate, Slow Ride Bakery Cookies, Jewels and Artisan Batch.
Niel Marotta, president and CEO of Indiva noted the company is very pleased with continued support from Sundial.
“The Amended Term Loan, and termination and repayment of all obligations under the Dycar Manufacturing Agreement, effectively lowers Indiva's cost of capital, and will be immediately accretive to earnings and cash flow,” Marotta stated.
Price Action
Indiva’s shares were closed Tuesday's market session 7.30% higher at 35 cents per share.
Photo: Courtesy of Margo Amala on Unsplash
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