Our royalty investment forms part of a whole capital solution for our investee companies. We provide capital investment for a percentage of future revenues or profits and currently have invested in the following three companies.
Due to refocused business strategy by CTI, FinCanna and CTI have agreed to a restructured agreement whereby FinCanna is to receive approximately US$3.9 million cash and an overriding royalty equivalent to 3.44% of the consolidated topline revenue of CTI in perpetuity as repayment of CTI’s outstanding secured loan. Cash proceeds will be generated from the sale of CTI’s property in Coachella, expected to close in December 2018 or January 2019.
- CTI’s is refocusing towards extraction, manufacturing, and brand development and plans to retrofit its 5,200 sq ft, building site in Palm Desert, California as a permanent extraction and premium manufacturing facility and 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.
- FinCanna has a 50% profit sharing interest in Cultivation Technologies Inc. (CTI)’s Interim Extraction facility at Coachella, which can process an estimated 6,000 pounds of biomass per month, translating to approximately 3.7 million grams of raw cannabis oil per year.
Green Compliance offers a state-of-the-art enterprise compliance and point-of-sale software solution (“ezGreen”) for licensed medical cannabis dispensaries and cultivators. Upon completion of funding, FinCanna earns a perpetual royalty equal to 10% of consolidated gross revenues of ezGreen, subject to certain buy-back options.
Refined Resin Technologies
Refined Resin Technologies is a cannabinoid research and refinery company that provides B2B and B2C products and services to licensed dispensaries and distributors in the medical cannabis supply chain. Upon completion of funding, FinCanna earns a perpetual royalty ranging from 16% to 7.0% of Refined Resin’s consolidated annual revenues, subject to certain buy-back options, with an effective royalty rate of 11.75% on the first US$160 million of Refined Resin’s consolidated annual revenues.