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Jushi Holdings Inc. (OTCQX:JUSHF) (CSE:JUSH) announced the second closing of its previously announced private offering of 12% second lien notes and detached warrants to purchase the company’s subordinate voting shares at an exercise price of $2.086. To date, Jushi has closed on an additional $3 million for a total of $72 million in gross cash proceeds, and issued $72 million aggregate principal amount of notes and approximately 17 million of warrants to investors in the notes.
The notes will mature on December 7, 2026, will bear interest of 12.0% per annum, payable in cash quarterly, and will be guaranteed by certain of the company’s direct and indirect domestic subsidiaries and secured by second priority liens on certain assets of the company and certain of the company’s direct and indirect domestic subsidiaries. In connection with the offering, the purchasers of the notes also received four-year warrants at 50% coverage with an expiry date of December 7, 2026, at an exercise price per share equal to $2.086.
The offering and sale of the notes and warrants have not been and will not be registered under the Securities Act of 1933, as amended, or the laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Entities affiliated with Jim Cacioppo, Jushi’s CEO, chairman and founder, subscribed for $3.0 million of the notes, and Denis Arsenault, a significant stockholder of the company, subscribed for $14.4 million of the notes. None of the aforementioned subscribers were involved in pricing or setting the terms of the offering.
Additional Financing Secured
Jushi entered into an equipment lease financing facility with XS Financial (OTCQB:XSHLF) (CSE:XSF), together with a related equipment funding commitment of up to $10 million valid through August 2, 2023 subject to the terms and conditions of such facility agreement. Within that commitment and pursuant to such facility agreement, the company expects to conduct approximately $2.0 million in sale-leasebacks of certain company-owned equipment, subject to customary closing conditions. Further, the company also plans to draw down an additional $1.9 million on an Arlington, Virginia real estate mortgage facility in the first quarter of 2023.
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