Gilla Inc. (OTCPK:GLLA) announced that it has entered into a loan agreement for aggregate principal gross proceeds of CAD 1,000,000 on January 18, 2016. The transaction will include participation from new investor, Sarasvati Investments Inc. Chief Executive Officer and Chief Financial Officer committed to provide 10% of the principal amount of the loan. The loan carries a fixed coupon of 16% per annum and would mature on July 3, 2017.

The company may elect to repay the outstanding principal of the loan together with all accrued and unpaid interest thereon prior to the maturity date, subject to an early repayment penalty of the maximum of three months interest on the outstanding principal of the loan 50% of the interest payable on the outstanding principal of the loan until the maturity date. The company will also issue 250,000 warrants for the purchase of common stock of the company at an exercise price of $0.20 (CAD 0.29072) per share, such warrants expiring on December 31, 2017. The conversion was made through www.oanda.com on January 18, 2016.