Cannara Announces Amendment and Upsize of BMO Credit Facility to Support Facility Expansion at Valleyfield

Core Viewpoint - Cannara Biotech Inc. has amended its credit facility with Bank of Montreal to include a $10 million upsize, aimed at funding the initial post-harvest expansion at its Valleyfield facility, which supports the company's long-term goal of achieving an annual production capacity of 100,000 kg [1][5]. Financial Flexibility and Growth Strategy - The amendments to the credit facility reflect confidence in Cannara's growth strategy and operational performance, as stated by the President & CEO [2]. - The company is positioned to execute the expansion of its Valleyfield facility with improved financial flexibility and reduced financing costs, while maintaining a strong balance sheet [3]. Capital Expenditures Facility - The Restated Credit Facility includes a $10 million committed delayed capital expenditures debt facility, available through multiple draws until July 2026, with a 10-year amortization schedule [4]. - This facility will fund the initial phase of Cannara's post-harvest expansion, enhancing capabilities in hang-drying, freezing, trimming, packaging, and butane extraction [5]. Interest Rate Reduction - Cannara secured a total 50-basis-point reduction in the interest rate spread under the Restated Credit Facility, decreasing the overall cost of debt from over 8% in 2024 to below 6% [8]. - The company achieved this reduction through meeting certain covenant thresholds, resulting in significant savings in interest expenses [8]. Removal of Limited Recourse Guarantee - The company successfully eliminated a limited recourse guarantee provided by a related party, which reduced annual interest expense by approximately $375,000, thereby strengthening its capital structure [8].