CB2 Insights Announces Amendments to Promissory Note held by Merida Capital Partners

TORONTO, ON – June 18, 2020  CB2 Insights (CSE: CBII; OTCQB: CBIIF) (“CB2” or the “Company”), announces that it has amended the terms of its issued and outstanding promissory note held by Merida Capital Partners (“Merida”), which is designed to help the Company achieve its long term growth plans and drive continued profitability.

Amendment to Promissory Note

The Company has entered into an amended and restated promissory note (the “Amended Note”), which amends the terms of the promissory note originally issued by the Company on December 20, 2018 and amended on June 2019. Under the terms of the Amended Note, the principal amount of USD $3 million will become payable on December 24, 2022 (previously due December 24, 2020), carry an annual interest rate of 8% (previously 12%), payable, at the Company’s option, either in cash or in common shares of the Company. If interest is paid in common shares, the number of shares will be calculated at a price per share equal to a 10% discount to the 20-day volume-weighted average trading price of the Company’s common shares on the Canadian Securities Exchange (the “CSE”). Additionally, if at any time prior to the maturity date, the closing price of the Company’s common shares on the CSE is equal to or greater than CAD $0.30 for 20 consecutive trading days, then the outstanding amounts owed under the Amended Note will be converted into that number of common shares obtained by dividing (A) the Canadian dollar equivalent of the sum of (i) the principal amount of USD $3,000,000 and (ii) the unpaid accrued interest owing up to the conversion date, by (B) the volume-weighted average closing price of the Company’s common shares on the CSE during such twenty (20) consecutive trading day period, less a discount of 10%. The Amended Note is effective as of April 1, 2020.

“Merida Capital Partners continues to show its commitment to the long-term value of the Company, as evidenced by its agreement to restructure the terms of its note, 6 months ahead of its maturity date and at terms supportive of the Company’s continued growth. These amended terms will allow us to continue executing on a plan which has led to profitability in April and May and demonstrates the value we have continued to show through execution, growth and commitment to shareholders.” said Prad Sekar, Chief Executive Officer of CB2 Insights. He stated further that, “Extending this debt to the end of 2022 with a recent cash injection from government funds in the US as part of the COVID-19 pandemic makes significant improvements to our balance sheet enabling us the room to grow and build long-term value for our shareholders.”

Mitch Baruchowitz, Managing Partner of Merida added, “CB2 is one of those rare companies that has grown into a profitable enterprise in the cannabis landscape.  We are excited to support its continued expansion of technology and health care offerings for both the cannabis industry and traditional healthcare market, and believe the Company is just starting to realize what it can achieve.”

On an unaudited basis, the Company has achieved its target of reaching positive cash flow and has seen two consecutive months of profitability (April and May 2020). As a result of the COVID-19 pandemic, the Company also received $USD 652,500 in government funds for its medical services division in the US. This funding provided the Company with needed cash during the early days of the pandemic. Used within the confines of the program, the Company expects that 100% of this funding will be forgiven.

As consideration for the amendments, the Company issued warrants entitling the holder to purchase up to 3 million common shares at an exercise price of CAD $0.14 per common share during the period commencing on the first anniversary of date of issuance of the warrants and ending three years from such issuance date.

The Company will be filing its annual financial statements (the “Annual Financial Statements”) and related management discussion and analysis (“MD&A”) for the year-ended December 31, 2019 after market close Thursday June 18, 2020. The Company has scheduled its earnings call to Friday June 19, 2020 at 9am ET.

Conference call details:

DATE:                                                Friday, June 19, 2020

TIME:                                                 9:00 am ET

US/Canada Toll Free Dial In:             1-800-319-4610

Toronto Local Dial In:                       1-416-915-3239

International Toll:                             1-604-638-5340

CALL NAME:                                     CB2 Insights Earnings Call

Skylight Health

Author Skylight Health

More posts by Skylight Health

Leave a Reply