Repayment of Loan
- FinCanna has a secured loan to CTI of US$6 million. Due to re-focused business strategy by CTI, FinCanna and CTI have agreed to a restructured agreement:
FinCanna is to receive approximately US$3.9 million as repayment of CTI’s outstanding secured loan;
FinCanna is to receive an overriding royalty equivalent to 3.44% of the consolidated topline revenue of CTI in perpetuity.
- FinCanna will no longer need to provide additional financing to earn the 3.44% royalty in perpetuity on any of CTI’s projects, as the 3.44% overriding royalty covers all of CTI’s current and future projects.
Note: CTI has the option to increase its cash payment to FinCanna before December 31, 2018, and the payments in perpetuity of 3.44%, based on total cash payments to FinCanna of US$3.9 million, would alter based on total cash payments to FinCanna under a predetermined formula.
CTI's Future Projects
CTI’s refocused business strategy towards extraction, manufacturing, and brand development, instead of large-scale indoor cultivation, is a result of changing market conditions and prioritizing ROI. As a result, CTI intends to:
- Retrofit its 5,200 sq ft, building site in Palm Desert, California as a permanent extraction and premium manufacturing facility for various established premium brands such as its own Coachella Premium and for others.
- Develop its wholly-owned two-acre site in Colusa, California as a biomass processing, manufacturing and distribution facility to serve the Bay Area and other key markets in Northern California.