VANCOUVER, April 25, 2019 /CNW/ - Hempco Food and Fiber Inc. ("Hempco" or "the Company") (TSX-V: HEMP) today announced that it has entered into a loan agreement (the "Loan Agreement") with Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) (Frankfurt: 21P; WKN: A1C4WM) ("Aurora") pursuant to which Aurora has agreed to lend to Hempco up to C$4 million (the "Loan"). The Loan Agreement has been entered into as part of the transaction (the "Transaction") agreed to by both Aurora and Hempco (the "Parties") in a binding letter agreement announced by the companies in a joint press release dated April 16, 2019, and providing for the purchase, by Aurora, of all of the issued and outstanding shares of Hempco not already owned by Aurora. The Loan will be secured by a Guarantee from Hempco's wholly-owned operating subsidiary, Hempco Canada Superfoods Inc., and a General Security Agreement pledging all of Hempco's assets.
The Loan is intended as a bridge loan to fund completion of Hempco's 56,000 sq ft, 2.9 million kg-per-year, state-of-the-art hemp processing facility in Nisku, Alberta, and to provide Hempco with working capital for operations while the Parties work towards completion of the Transaction contemplated in their binding letter agreement. Principal amounts advanced pursuant to the Loan Agreement are to bear interest at the rate of 8% and must be repaid by January 15, 2021. Under the terms of the Loan Agreement, Aurora has the discretion to halt advances of loan proceeds at any time, in its sole but reasonable discretion.
For more than 12 years Hempco has been a trusted and respected pioneer, innovator and provider of quality hemp-based foods, hemp fiber and hemp nutraceuticals. Hempco produces and markets the brands PLANET HEMP SUPERFOOD™ and PRAISE HEMP™, hemp-based foods and nutritional supplements for people and animals. Hempco is expanding its processing ability to meet global demands in a 56,000 sq. ft. facility located at Nisku, Alberta. Hempco's common shares trade on the TSX Venture Exchange under the symbol "HEMP".
The TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"). Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements in this press release include Hempco's anticipation that the Loan will fund completion of its facility at Nisku and fund operating capital needs pending completion of the Transaction. These statements are only predictions and are not guarantees of future performance; therefore, undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Hempco is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
On behalf of the Board of Directors,
HEMPCO FOOD AND FIBER INC.
SOURCE Hempco Food and Fiber Inc.