Radient Announces the Initiation of an At-the-Market Equity Program and Provides an Update on Initiatives to Meet Customer Demand During COVID-19 Pandemic, Financing Activities and Liquidity
March 31st, 2020
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
EDMONTON, Alberta, March 27, 2020 (GLOBE NEWSWIRE) — Radient Technologies Inc. (“Radient” or the “Company”) (TSX Venture: RTI; OTCQX: RDDTF) announces that the Company has established an at-the-market equity program (the “ATM Program”). The Company also announces that it is actively reviewing its operations in response to guidance from governmental and health authorities with a view to limiting the spread of the virus that causes COVID-19, and also wishes to provide an update on its current liquidity and financing activities.
The ATM Program will allow the Company to issue up to $9.4 million worth of common shares from treasury (“Common Shares”) to the public from time to time at prevailing market prices through the TSX Venture Exchange (“TSXV”) or any other marketplace on which the Common Shares are listed, quoted or otherwise traded in Canada. The volume and timing of distributions under the ATM Program, if any, will be determined at the Company’s sole discretion, subject to applicable regulatory limitations.
Sales of Common Shares through the ATM Program will be made pursuant to National Instrument 44-102 Shelf Distributions and the terms of an equity distribution agreement dated March 26, 2020 entered into between the Company and National Bank Financial Inc. (the “Agent”), as agent. The ATM Program will be effective until February 21, 2022, unless all Common Shares available for issue under the ATM Program have been issued or the ATM Program is terminated prior to such date by the Company or the Agent.
Radient intends to use the net proceeds from the ATM Program, if any, for funding:
- additional equipment for the Company’s Edmonton I facility to allow for faster stream time as well as allowing an increase in evaporation capacity increasing Radient’s product pipeline;
- additional refining equipment, refurbishing existing equipment facility space and designing and installing customized downstream equipment for the Company’s Edmonton II facility;
- capital investment in further cannabinoid extraction, purification, isolation and product manufacturing capabilities at the Company’s Edmonton III facility;
- the Company’s planned project in Germany, similar to the Company’s Edmonton III facility, to deliver consistent cannabinoid derivatives and formulations, manufactured in accordance with EU GMP requirements; and
- general corporate purposes.
The Company has filed a prospectus supplement dated March 26, 2020 (“Prospectus Supplement”) to its base shelf prospectus dated January 21, 2020 (“Base Shelf Prospectus”) with each of the securities regulatory authorities in each of the provinces of Canada for the initiation of the ATM Program. Before you invest, you should read the Company’s Prospectus Supplement, the Base Shelf Prospectus, and all other documents the Company has filed with the Canadian securities regulatory authorities for more complete information about the Company and the ATM Program. These documents may be downloaded from SEDAR at www.sedar.com. Alternatively, the Agent will arrange to send you these documents if you request it by contacting:
NBF Syndication, 130 King Street West, 4th Floor Podium, Toronto, Ontario, M5X 1J9, or by telephone at (416)-869-6534, or by email at [email protected]
This news release does not constitute an offer to sell or the solicitation of an offer to buy the Common Shares, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
In response to the COVID-19 pandemic, the Company’s workforce will be reduced due to temporary layoffs, effectively retaining only those staff who the Company believes are essential to maintaining the safety of day-to-day operations. The Company plans to reorganise its workforce, focus on current projects at hand and utilize existing inventory to process cannabinoid extracts including resins, distillates and isolates.
The Company has also instituted additional COVID-19 measures, including:
- essential staff who are able to work from home have been asked to do so;
- all staff have been instructed to practice social distancing;
- expanded hygiene and cleaning protocols have been implemented at all sites;
- access to all sites is restricted to essential personnel; and
- additional preventive measures in operating activities have been implemented that will ensure the highest level of safety in the products we produce for our customers.
“In these challenging times we are committed to continuing to deliver high-quality products to our customers, while maintaining the strictest level of safety for our employees,” said Denis Taschuk, President and CEO of Radient.
Despite current economic conditions, the Company believes there is strong consumer demand for cannabis-based products, both medical and recreational. The temporary layoffs announced today are expected to allow the Company to quickly recall workers and safely scale up operations, as required to meet customer demand.
By managing its resources in this fashion while leveraging its proprietary product development platform, Radient expects to execute on its current commitments, such as its recently executed manufacturing agreements with Allied Corp., Dhaliwal Group and Shoppers Drug Mart, and any other near-term opportunities, while maintaining the highest standards of safety and quality for its products which include THC and CBD-based oils, resins, distillates and isolates. Other aspects of Radient’s business, including deliveries of finished products, will not be impacted by these staffing measures.
“These measures will allow Radient to manage its capital and human resources to respond to any increase in demand, while ensuring a safe work environment,” said Taschuk. “We are continuing to attract positive responses from potential customers in our pursuit of additional opportunities.”
Financing and Liquidity Update
In addition to the initiation of the ATM Program, the Company also wishes to provide an update on its current liquidity and financing activities. As of the date hereof, the Company has net working capital of $2.75 million exclusive of an account payable in respect of the Edmonton III facility in the amount of $7.1 million. Radient continues to pursue financing, including the following previously announced initiatives:
The Company announced a debenture financing of up to $5,000,000 on February 10, 2020. The Company announced the closing of the first tranche of debentures on March 4, 2020 for gross proceeds of CAD$1,162,500. The Company continues to pursue completion of the full $5,000,000 debenture financing.
The Company announced that it entered into a non-binding letter of intent with an institutional investor with respect to a proposed note financing on February 10, 2020 for gross proceeds of up to $10.4 million. Due diligence by the institutional investor is now substantially complete and the financing remains subject to execution of definitive documentation and regulatory approval, including approval of the TSXV.
Sale and Leaseback
The Company announced on January 14, 2020 that it entered into a binding letter of intent with 223801 Alberta Ltd (the “Purchaser”) with respect to the proposed purchase of land and buildings comprising the Company’s Edmonton I, II and III facilities for gross proceeds of approximately CAD$20 million. Due diligence and documentation for this transaction are substantially complete. The Company and the Purchaser are awaiting certain approvals of third parties.
Radient Technologies provides industrial-scale manufacturing solutions for premium natural ingredients and products. Utilizing its patented MAP™ extraction technology, Radient delivers superior customer outcomes in terms of ingredient purity, yield, and cost, serving global market leaders in industries such as foods & beverages, nutraceuticals, pharmaceuticals, cosmetics, and personal care. Since 2016, Radient has expanded its offerings to enter the cannabinoids market, using its MAP™ platform to provide premium ingredients that contain a full range of cannabinoid and terpene profiles. Please visit www.radientinc.com for more information.
SOURCE: Radient Technologies Inc.
Prakash Hariharan, Chief Financial Officer
(416) 561-9461 | [email protected]
Investors, please contact Adam Deffett, Sr. VP Corporate Development
Cautionary Note about Forward-looking Statements and Information
Certain of the statements made and information provided in this news release are forward-looking statements or forward-looking information (“forward-looking statements”) within the meaning of applicable Canadian securities legislation. All statements and information other than statements of or information regarding historical fact contained in this news release are forward-looking statements. Often, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “continue”, “projected”, “potential”, “proposed”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “likely” or “will” be taken, occur or be achieved.
Forward-looking statements include, but are not limited to, statements or information with respect to: the amount, timing and terms of the ATM Program and the use of proceeds therefrom; the Company’s workforce and corporate strategy; product quality; the Company’s commitments, opportunities, customers and financing initiatives.
Forward-looking statements are based on a number of assumptions that management considers reasonable, however, if such assumptions prove to be inaccurate, then actual results, activities, performance or achievements may be materially different from those described in the forward-looking statements. These assumptions include those set out below and, except where otherwise stated, Radient has assumed a continuation of existing business operations on substantially the same basis as exists at the time of this news release. With respect to the Forward-looking Statements contained in this news release, Radient has made assumptions regarding, among other things: timely receipt of the necessary regulatory (including stock exchange) approvals and other required approvals; use of proceeds; interest rates; operating and capital costs; Radient’s ability to generate sufficient cash flow from operations and to access credit and capital markets to meet its future obligations; opportunities available to or pursued by Radient; Radient’s ability to attract and retain qualified personnel or management; stability of general economic and financial market conditions; and the impact of the COVID-19 pandemic.
Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause actual results, activities, performance or achievements to be materially different from those described in the forward-looking statements. Radient is subject to material and other risks that could cause actual results to differ significantly from Radient’s current expectations, including the following risks: risks relating to the business environment in which Radient operates, including general economic, market and business conditions in Canada, the European Union and the United States; operational risks, including environmental liabilities, Radient’s ability to attract and retain customers, the competitive nature of the industries in which Radient operates, competition for, among other things, capital and skilled personnel and management, and failure to obtain industry partner and other third party consents and approvals when required; financial risks, including liquidity and financing risks, credit risk, currency risk, interest rate risk, commodity price risk, unavailability of capital/inadequate income, indebtedness and financing, debt service obligations, cost estimates, tax matters, limitations on insurance, global economic environment, markets for cannabis and cannabis products, dividends, compensation risks and financial reporting risks, and imprecision in estimating capital expenditures and operating expenses; future sales or issuances of debt or equity securities could decrease the value of any existing Common Shares, dilute investors’ voting power, reduce Radient’s earnings per share and make future sales of Radient’s equity securities more difficult; market price of Common Shares; future sales by existing shareholders could cause Radient’s share price to fall; Radient has neither declared nor paid any dividends on its Common Shares since the date of its incorporation and may not pay any dividends in the future; use of proceeds; there is no assurance of a sufficient liquid trading market for the Common Shares in the future; the impact of new laws and regulatory requirements, including the adoption of new environmental regulations, as it relates to the cannabis industry and other laws and regulations and changes in how they are interpreted and enforced; Radient’s ability to obtain required regulatory approvals; political and economic conditions including the adverse impact of the COVID-19 pandemic on the Canadian and global economy; the results of litigation or regulatory proceedings that may be brought against Radient; changes in income tax laws; and the other factors disclosed under “Risk Factors” in the Prospectus Supplement, “Risk Factors” in the AIF, which is incorporated by reference in the Prospectus Supplement, and those risks described in all other documents incorporated by reference in the Prospectus Supplement.
Forward-looking statements are designed to help you understand management’s current views of Radient’s near and longer term prospects, and it may not be appropriate for other purposes. 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 such statements. Accordingly, you should not place undue reliance on the Forward-looking Statements contained herein.
Radient will not update this information unless it is required to do so by applicable securities laws. All Forward-looking Statements in this news release are qualified by these cautionary statements.
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