CryoMass Technologies today announced an agreement that will give its affiliated company CRYM Co-Invest GP the right to purchase up to five CryoSift Separator Units from CryoMass for a total of up to $6 million. GP will in turn lease the units to cultivators and processors that have been sourced and approved by CryoMass.
CryoMass said the financing structure provides it with growth capital while enabling wider deployment of its processing technology.
This funding arrangement will be non-dilutive to CryoMass shareholders, while providing capital to build units and working capital for growing the business. The term of each lease is expected to be a minimum of three years, at the end of which companies will have the right to sell the units back to CryoMass for their original purchase price. CryoMass will receive a recurring revenue stream from the processing fees charged to clients.
"This innovative financing agreement is key since it will allow us to more rapidly deploy our disruptive CryoSift Separators and drive adoption of our cutting-edge refinement process," said Christian Noël, CEO of CryoMass Technologies. "We look forward to onboarding new Clients. We will announce further details as lease agreements are finalized".
Although demand for CryoMass' cryogenic refinement equipment continues to be strong, many operators lack the large upfront capital required under a traditional licensing model. At the same time, CryoMass requires growth capital to manufacture and ship Units to meet increasing demand. This financing arrangement accelerates opportunities for the Company to deploy Units.
Access to capital has been an ongoing challenge for our prospective clients working in the cannabis industry due to federal prohibition. Although medical and/or recreational cannabis use is now legal in 38 states, most banks still refuse to work with cannabis companies due to federal law. This greatly restricts lending as well as other access to traditional sources of capital.
