This article originally appears in London Inc. Magazine's weekly update on October 18, 2019.
LONDON-BASED CANNABIS company Indiva Limited announced this week that it has acquired financing of up to $11 million through an institutional lender. The funding comes in the form of a $6.5 million secured demand loan facility and a $7.5 million secured bridge loan facility, with a cap being placed at a total of $11 million in loans.
The bridge loan facility, with an undisclosed rate, allows the firm to effectively finance outstanding invoices—Indiva will get a chunk of cash upfront for the outstanding invoice, while the financier works on collecting the whole sum.
“As we look ahead towards Cannabis 2.0, we are pleased to secure the necessary capital to execute on growth objectives,” Niel Marotta, Indiva’s president CEO, said in a statement. “This financing will support the launch of our refinement, production and manufacturing capabilities and position the company well as it prepares to bring its portfolio of premium edible products to market.”
The $6.5 million secured demand loan facility bears interest at prime plus 9 per cent, and is secured by the assets of Indiva, while also posing undisclosed restrictive covenants. The debt is due upon demand but may be paid off at any time without penalty. A 2 per cent finders fee was also paid in connection with acquiring the facility.
The secured loans will effectively be used to pay off Indiva’s unsecured convertible debenture which comes due December 13, 2019. $5.65 million of those debentures remain outstanding as of the latest financial reports. Whatever funds remain following the payment of debt in December will be used towards a facility expansion, capital purchases of equipment, biomass purchases, and general working capital.
