StateHouse Holdings Inc. STHZF STHZ a California-focused, vertically integrated cannabis enterprise, has entered into an agreement with Pelorus Equity Group as administrative agent and collateral agent to the credit and guaranty agreement, dated as of December 21, 2020, as amended (the “series A loan agreement”), to extend the repayment date of the series A loan agreement to February 10, 2027 and increase the amount of the series A loan (the “debt modification agreement”). Pursuant to the terms of the debt modification agreement, Pelorus is providing an incremental term loan of $7.521 million, to bring the total principal amount of the series A loan agreement to $15.0 million. The company will use the funds for repayment of the series A indebtedness, servicing the company’s other debts to Pelorus, including any interest owing thereon, and payment of property taxes.
Pursuant to the terms of the debt modification agreement, the Pelorus loan will bear an interest rate of one month secured overnight financing rate (“SOFR”), plus 12.5%, with a SOFR floor of 4.5%. In accordance with the terms of the debt modification agreement the debt service coverage ratio measurement date will be extended to July 2024.
As consideration for providing the Pelorus loan, the company has agreed to grant to Pelorus 136.3 million warrants of the company, amounting to 40% of the Pelorus loan. The Pelorus warrants are exercisable, for a period of three years, into common shares of the company. Pelorus will be prohibited from exercising the Pelorus warrants if, upon exercise, Pelorus would beneficially own greater than 9.99% of the outstanding common shares of the company.
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