Medical Marijuana, Inc. Closes with Lotus Capital for a $2 Million Equity Based Line of Credit
SAN DIEGO, Aug. 14, 2012 /PRNewswire/ -- Medical Marijuana, Inc. (OTC: MJNA) a leading hemp industry innovator, has announced that the Company has signed closing documentation for a $2 million USD line of credit with Lotus Capital, a Chicago based private equity firm. The line of credit will be used as a reserve fund for product expansion of the Dixie X line of Cannabidoil (CBD) based products as well as to support the national marketing campaign of the Dixie X and CanChew gum product launch, scheduled for early September. The LOC will also be available to support future expansion through Company acquisitions.
This new revolving line of credit will be secured against shares of the Company's Capital Stock. MJNA is in the process of providing a new S-1 registration statement for the issuance of the shares. Additional terms of the LOC allow MJNA to cancel the line at any time, releasing the security interest in the shares back to the Company. This transaction is non-dilutive to the shareholders providing that the Company repays any drawdown against the LOC per the terms of the agreement.
Revolving Line of Credit Uses
Currently, Company revenue sources are sufficient to meet operational cash-flow requirements. However, the Company anticipates increased costs to properly support the national launch of its hemp-based CBD Dixie-X and CanChew products. Additionally, we have numerous product and market expansion opportunities which require capital to execute. For these reasons, the Company has been exploring several financing options.
Medical Marijuana, Inc. President Michael Llamas was quoted: "Having this additional access to the capital markets gives us maximum flexibility to bring forth the best of the numerous business opportunities that lie before us. Although we have been extremely selective in our current business development, we foresee numerous potential expansion opportunities and want to be prepared for the future. We appreciate the continued support of our team and shareholders."
Company to become Fully Reporting
In conjunction with the S-1 filing, MJNA expects to file their first audited financial statements prior to year-end. The Company's objective is to complete the 15c2-11 application process, which it started in May of this year, as well as becoming a fully reporting, fully compliant company with the Securities Exchange Commission (SEC). The audit and due diligence process will take an additional 90 to 120 days to complete. Once completed and approved, the Company's equity shares will trade on a "Solicited" basis, be on a higher level of the NASD Over-the-Counter Bulletin Board and there will be a dedicated market maker for the Company's tradable shares.
About Medical Marijuana, Inc.
Our mission is to be the premier cannabis and hemp industry innovators, leveraging our team of professionals to source, evaluate and purchase value-added companies and products, while allowing them to keep their integrity and entrepreneurial spirit. We strive to create awareness within our industry, develop environmentally friendly, economically sustainable businesses, while increasing shareholder value.
Medical Marijuana, Inc. does not grow, sell or distribute any substances that violate United States Law or the controlled substance act.
For more information, please visit the company's website at: www.MedicalMarijuanaInc.com
This press release may contain certain forward-looking statements and information, as defined within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Such forward-looking statements by definition involve risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Medical Marijuana, Inc. to be materially different from the statements made herein.
Medical Marijuana, Inc.
Toll Free: 888-OTC-MJNA (888-682-6562)
Investor Relations Contact:
Stuart T. Smith
SOURCE Medical Marijuana, Inc.