Item 1.01 Entry into a Material Definitive Agreement
On December 23, 2020, CannapharmaRx, Inc. (the "Company") received a commitment
letter from Global Capital Partners Fund, LLC (the "Commitment") for a certain
property in Alberta, Canada. The Company returned the Global Capital Partners
Fund, LLC commitment letter on or before the expiration date of the Commitment,
as extended. The transaction, subject to certain closing conditions, is
scheduled to close in February 2021 in conjunction with the purchase of the
Alberta, Canada facility as discussed in the Form 8-K filed on January 12, 2021,
the substance of which is incorporated by reference herein.
Pursuant to the Commitment, the amount of the proposed loan is Twelve Million
dollars in United States currency (US$12,000,000) with interest being paid
monthly and no original issue discount. The Commitment charges interest at an
amount up to, but not to exceed thirteen (13%) per annum, fixed for twelve (12)
months and thirteen and one-half percent (13.5%) for the second year of the
proposed loan. The exact interest rate will be determined three business dates
prior to closing. The Company will pay two and one-half percent (2.5%) of the
loan as points on the loan to Global Capital Partners Fund, LLC (the "Points").
The points are payable as follows: Ten Thousand US Dollars (USD$10,000) paid,
which is deemed earned. One Hundred Twenty Thousand US Dollars (USD$120,000),
due and payable upon issuance of the Commitment. This fee will be
non-refundable. The balance, which equals One Hundred Seventy Thousand US
Dollars ($170,000), is payable at closing. A finder's fee of two and one-half
percent (2.5%) is due to Teneo Capital at closing. The term of the loan will be
twenty-four (24) months. Global Capital Partners Fund, LLC is not requiring
personal guarantees of any of the principals of the Company. The proposed loan
will carry with it a five percent (5%) prepayment penalty which is waived should
the Company make three (3) months of timely payments. The Company will grant a
first position lien on the financed property.
The Commitment is premised on several conditions. All payments to be made in US
Currency. Global Capital Partners Fund, LLC must receive a Lender ordered MAI
appraisal showing satisfactory value. Global Capital Partners Fund, LLC is
granting a maximum loan to value of fifty-five percent (55%). Global Capital
Partners Fund, LLC must receive a Title Report and legal opinion showing good
title to the property. Global Capital Partners Fund, LLC must receive a
satisfactory Legal opinion on all related documentation. The Company must obtain
insurance protecting Global Capital Partners Fund LLC interest in the property.
The material terms of the Commitment are included in that certain commitment
letter attached hereto and incorporated herein as if set forth as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
Attached is a copy of a press release being issued by the Company relating to
the Commitment, a copy of which is attached as Exhibit 99.2 and is hereby
incorporated.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Commitment Letter
99.2 Press Release titled CannapharmaRx, Inc. Announces
Non-Dilutive Commitment Financing for Assets and
Facilities Located in Cremona, AB, dated January 19,
2021
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