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Aleafia Health Closes New $19M Credit Facility, Improves Financial Flexibility

Aleafia Health Inc. (TSX: AH) (OTCQX: ALEAF) announced Wednesday that it is closing its credit facility of up to $19 million. The financing provides the Toronto-based company with liquidity to fund operations and organic growth initiatives.

Benzinga · 12/29/2021 09:36

Aleafia Health Inc. (TSX:AH) (OTCQX:ALEAF) announced Wednesday that it is closing its credit facility of up to $19 million.

The financing provides the Toronto-based company with liquidity to fund operations and organic growth initiatives.

"This financing improves our liquidity and capital structure as the company's senior secured debt obligations will now mature in December 2023 rather than in August 2022," Geoffrey Benic, the company's CEO said. "The transaction allows us to continue the growth of our core adult-use and medical cannabis sales channels, as we again expect to realize sequential growth in both channels over the previous quarter."

The credit facility consists of a revolving receivables facility of up to $7 million and a term loan of $12 million. The maturity date is December 2023.

In addition, the term loan was fully drawn by the company upon closing, while the revolving receivables facility is expected to be drawn in January 2022.

Aleafia said net proceeds from the credit facility - financed by the Garrington Group of Companies - will be used to fund working capital, repay $5 million in principal on the existing senior secured credit facility that was announced on August 23, 2021, along with accrued interest and fees, and for general corporate purposes.

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ALEAF Price Action

Aleafia's shares traded 1.55% lower at $0.1083 per share after the market close on Tuesday.

Photo: Courtesy of Towfiqu barbhuiya on Unsplash