HBORF - Harborside Completes Financing Deal With Pelorus Equity
Pelorus Equity Group completed the second and final tranche of its previously announced $77.3M non-dilutive real estate debt financing with Harborside Inc. (CSE: HBOR) (OTCQX: HBORF). The initial funding included three individual loans to Harborside , Urbn Leaf Holdings Inc. , and Loudpack JV Corporation with a second tranche made available upon the final closing of the three-way merger. The proceeds were used primarily to retire certain existing loans and provide additional working capital.
Harborside’s Merger
Harborside had previously announced the completion of its acquisition of LPF JV Corporation, a leading manufacturer, cultivator, and distributor of award-winning cannabis brands in California. The acquisition of Loudpack follows Harborside’s acquisition of UL Holdings Inc. (“Urbn Leaf”) completed on March 1, 2022 and Harborside’s acquisition of Sublimation Inc. (“Sublime”) completed on July 2, 2021. Following the completion of the acquisitions, the Company plans to be renamed StateHouse Holdings Inc. The second tranche of the Rollup Financing was funded upon completion of the StateHouse Holdings Transaction.
“Pelorus has been a tremendous financial partner as we worked to reach this important milestone,” said Ed Schmults, CEO and a director of Harborside. “Their ability to provide access to customized financing, as well as considerable sector knowledge and a deep network of experts is unparalleled. Their solutions proved to us why so many of the top players in the industry are turning to them for cannabis finance solutions.”
“At such a pivotal time in the cannabis market’s evolution, we are proud to bring our strategic partners customized lending solutions to meet their goals,” said Dan Leimel, CEO of Pelorus Equity Group and Manager of the Pelorus Fund . “We were incredibly pleased to complete this funding with Harborside, Urbn Leaf and Loudpack to support their initiatives to transform the California market landscape, and we look forward to a strong partnership with them as they grow.”
Financing Rates
The Rollup Financing contains a nominal interest rate of 10.25%, along with specified origination, closing, and other transaction fees, and will be secured by certain real estate assets and cannabis licenses of Harborside, Urbn Leaf, and Loudpack. The Rollup Financing is subject to debt-service ratio requirements, interest reserves, certain cross-corporate guarantees and defaults, subordination agreements and inter-creditor agreements, along with a general corporate guarantee from Harborside.
Mr. Leimel added, “Our ability to structure funding solutions on complex transactions sets Pelorus apart in the cannabis lending sector. As the industry grows and more of the top cannabis players are in need of funding to support their M&A and expansion plans, we are ready to bring our asset-based lending solutions to those looking to quickly scale their operations in some of the world’s most exciting cannabis markets.”