Hudson Resources has entered into definitive agreements with its existing lenders, Cordiant Capital and Romeo Fund – Flexi with respect to an additional $10 million six-month bridge loan facility.
The financing is designed to facilitate completion of deliveries to lead customers and completion of its strategic process announced earlier in 2019.
The loan agreements provide for an immediate U$10 million loan facility increase, of which the company intends to draw down $6 million immediately. The additional loan facility will be provided by Cordiant and Romeo on a 50:50 basis. The additional funds bear interest at 20% per annum and mature on June 16, 2020.
In connection with this loan facility increase, the company has issued a total of 29,400,000 share purchase warrants to the lenders, each warrant entitling the holder to purchase one additional share in the capital of the company until December 16, 2020, at an exercise price of $0.325 per share.
The net proceeds of the debt financing will be used in support of the logistical costs associated with the company’s fulfilment of its first customer purchase order, repayment of temporary loans from the existing lenders ($500,000), replenishment of restricted cash reserves under the existing loan facility ($1.8 million), working capital and general corporate purposes.
“We are pleased to have the continued support of our lenders to provide this facility for the Company and its Greenland operations, ensuring the delivery of product to customers and to support the strategic review process which is ongoing,” said Jim Cambon, president.
