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BANKING
Heritage Cannabis enters equity financing with Obsidian Global Partners
by Staff Writers
Toronto, Canada (TDN) Nov 03, 2022

Heritage will use the proceeds of the equity line of credit for general corporate purposes and expenses of the Offering.

Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF), has entered into an equity line of credit agreement (the "ELOC Agreement") with Obsidian Global Partners, LLC (the "Investor") whereby the Investor proposes to purchase common shares in the capital of Heritage ("Common Shares") for the aggregate gross proceeds of up to US$20 million by private placement, at Heritage's discretion (the "Offering").

On closing, Heritage will pay the Investor an initial fee in an amount equal to 1.5% of US$20 million, which will be satisfied by the issuance of Common Shares. These Common Shares are subject to a statutory lock-up of four months plus one day from closing (the "Statutory Lock-Up"). An additional fee equal to 1.5% of US$20 million is due after 50% of the total Offering amount has been drawn by the Company, which amount may be satisfied by cash or the delivery of Common Shares at the option of the Company.

Heritage will also advance 79,030,611 Common Shares to the Investor in escrow (the "Escrow Shares"). The Escrow Shares will be subject to the Statutory Lock-Up and will only be released to the Investor in tranches as and when Heritage requests that the Investor purchase Common Shares pursuant to the ELOC Agreement. Any Escrow Shares that are not purchased by the Investor will be subject to cancellation at the end of the term of the ELOC Agreement.

Heritage will use the proceeds of the equity line of credit for general corporate purposes and expenses of the Offering.

In accordance with the terms of the ELOC Agreement, at no time shall the Investor be issued Common Shares which would result in the Investor beneficially owning in aggregate greater than 9.99% of the outstanding Common Shares of the Company.

"The closing of this deal with Obsidian is another indication that Heritage has a solid foundation for a sustainable business. With access to additional equity funds, we can continue to grow even stronger from quarter to quarter. We are adding new revenue streams, expanding across borders, and this equity financing will assist us with our continued plan for future growth. The market is starting to recognize that Heritage is a real player and a company to keep their eyes on." stated David Schwede, CEO of Heritage.


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