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Entourage Health and LiUNA Pension Fund Upsize Credit Facility with Additional $30 Million in Non-Dilutive Funding Availability

Oct 31, 2022 • 12:33 PM EDT
10 MIN READ  •  By Michael Berger
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TORONTO, Oct. 31, 2022 (GLOBE NEWSWIRE) — Entourage Health Corp. ( (TSX-V:ENTG(OTCQX:ETRGF) (FSE:4WE) (“Entourage” or the “Company”), a Canadian producer and distributor of award-winning cannabis products and brands, is pleased to announce it has amended and upsized its existing credit facility (the “Credit Facility”) with an affiliate of the LiUNA Pension Fund of Central and Eastern Canada (“LPF”), providing an additional $30 million in funding availability. The Credit Facility will be used by Entourage for general working capital purposes as the Company continues to execute its commercial goals to achieving sustainable profitable growth.

“Over the past two years, our strategic investor and affiliate partners of the LiUNA Pension Fund have supported and championed our commercial expansion that included the introduction of over 60 new innovative products, the addition of over 10 union groups and five top-tier insurance providers to our medical platform, a 75% increase in patient registrations, and over 500% increase in retail sales – all contributing to an average 55% revenue growth, year-over-year since 2019,” said George Scorsis, CEO and Executive Chairman. “We have consistently demonstrated sustainable topline growth and retained our market positioning, even as market conditions continue to challenge many in the sector. This $30 million in financing, which does not dilute our shareholder base, provides favourable terms that continue to support our disciplined drive for profitable growth and is a testament to the confidence of our employees, customers, patients, and shareholders that we are executing to plan.”

Credit Facility Terms

The $30 million in funding availability under the Credit Facility will be made available to Entourage in two equal tranches of $15 million each: the first tranche on October 31, 2022, and the second on January 31, 2023. The Credit Facility continues to bear an interest rate of 15.25% with the option, at the Company’s discretion, to capitalize interest in lieu of cash payments of interest and is set to mature on December 31, 2024. The Credit Facility is secured by the assets of the Company and its subsidiaries, including the Company’s production facilities, and contains customary financial and other covenants, as well as typical conditions precedent for a transaction of this nature. LPF’s security under the Credit Facility is in second position to the Company’s senior creditor.

Amended and Restated Credit Facility with Senior Lender

The Company also confirmed it executed an updated amended and restated credit facility agreement with its senior lender, the Bank of Montreal (the “Amended and Restated Credit Agreement”). The Amended and Restated Credit Agreement reflects all prior amendments made, including the extension of the maturity date to June 30, 2024, and this new additional funding availability under the Credit Facility.

A copy of the Credit Facility amendment and the Amended and Restated Credit Agreement will be made available under the Company’s profile on SEDAR at www.sedar.com.

Related Party Transaction

LPF is an insider of the Company as it owns greater than 10% of the common shares of the Company. Accordingly, the amending of the Credit Agreement represents a “related party transaction” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on the exemption from minority shareholder approval requirements under MI 61-101 as the Credit Facility is considered a non-equity loan as described under Section 5.7(f) of MI 61-101, and obtained by the Company on reasonable terms that are no less advantageous to the Company than if the Credit Facility was obtained from an arm’s length party. The funds borrowed under the Credit Facility are not convertible into or repayable by the issuance of equity or voting securities of the Company. The material change report will not be filed more than 21 days prior to the entering into of the amended Credit Agreement due to the timing of the announcement and closing thereof occurring in less than 21 days.

Visit Entourage’s website here to access the latest Company updates.

About Entourage Health Corp.

Entourage Health Corp. is the publicly traded parent company of Entourage Brands Corp. (formerly WeedMD RX Inc.) and CannTx Life Sciences Inc., licence holders producing and distributing cannabis products for both the medical and adult-use markets. The Company owns and operates a state-of-the-art hybrid greenhouse and processing facility located on 158-acres in Strathroy, ON; a fully licensed 26,000 sq. ft. Aylmer, ON processing facility, specializing in cannabis extraction; and a micropropagation, tissue culture and genetics centre-of-excellence in Guelph, Ontario. With its Starseed Medicinal medical-centric brand and marketplace, Entourage has an industry-first, exclusive partnership with LiUNA, the largest construction union in Canada, who together with employers and other union groups, facilitate access for insured medical patients. With the launch of Syndicate, the Company now hosts another unique medical marketplace that offers patients a collective of Canadian micro-cultivators’ products, along with the Company’s family of brands. Entourage’s elite adult-use product portfolio includes Color Cannabis, Saturday Cannabis and Royal City Cannabis Co.– sold across eight provincial distribution agencies. It is the exclusive Canadian producer and distributor of award-winning U.S.-based wellness brand Mary’s Medicinals sold in both medical and adult-use channels. Under a collaboration with a The Boston Beer Company subsidiary, Entourage is also the exclusive distributor of cannabis-infused beverages ‘TeaPot’ in Canada, which launched in select provinces summer 2022.

For more information, please visit us at www.entouragehealthcorp.com

Follow Entourage and its brands on LinkedIn

Twitter: Entourage, Color CannabisSaturday CannabisStarseedRoyal City Cannabis Co. & Syndicate

Instagram: EntourageColor Cannabis, Saturday Cannabis, Starseed, Royal City Cannabis Co. & Syndicate

For further information, investor or media inquiries, please contact:

Marianella delaBarrera
SVP, Communications & Corporate Affairs
416-897-6644
marianella@entouragecorp.com
investor@entouragecorp.com
media@entouragecorp.com

Forward Looking Information This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation which are based upon Entourage’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information can be identified by the use of forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would” or “will” happen, or by discussions of strategy.

The forward-looking information in this news release is based upon the expectations, estimates, projections, assumptions and views of future events which management believes to be reasonable in the circumstances. Forward-looking information includes estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of fact. Forward-looking information necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally; the ability of Entourage to implement its business strategies; the COVID-19 pandemic; competition; crop failure; and other risks.

Any forward-looking information speaks only as of the date on which it is made, and, except as required by law, Entourage does not undertake any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Entourage to predict all such factors. When considering this forward-looking information, readers should keep in mind the risk factors and other cautionary statements in Entourage’s disclosure documents filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com. The risk factors and other factors noted in the disclosure documents could cause actual events or results to differ materially from those described in any forward-looking information.

NEITHER 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

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Any Content posted regarding a Profiled Issuer is not a solicitation or recommendation to buy, sell or hold securities. We cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. All information should be independently verified. We are not responsible for errors or omissions in our publications, and any opinions expressed are subject to change, without notice. We do not, nor are we under any obligation to undertake due diligence or investigation or authenticate and verify whatsoever regarding Profiled Issuers or any Content posted in relation thereto and we do not receive any verification from the Profiled Issuer regarding the Content we disseminate. Similarly, while we endeavor to facilitate the provision of quality information, we are not responsible for any loss or damages caused or alleged to have been caused by its use nor verify or authenticate or update such information.

This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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