*Skylight Health (formerly CB2 Insights) was rebranded on November 30, 2020 and now trades under the symbol CSE:SHG*
CB2 Insights announces debt conversion of $3M USD held by Merida Capital and extinguishes all long-term debt liabilities
  • Merida Capital has agreed to an early conversion of their outstanding debt note of $3M USD
  • Merida will be granted 10,412,250 shares at the calculated 8-day VWAP of $0.38 CAD
  • Merida demonstrates its continued support of the Company’s goal of becoming one of the largest multi-disciplinary healthcare operators in the US
  • The Company further strengthens its balance sheet with elimination of long-term debt complementing the strong cash position of approximately $5.5M CAD to focus on growth and strategic M&A activity

TORONTO, ON – October 20, 2020 – CB2 Insights (CSE:CBII; OTCQB: CBIIF) (“CB2” or the “Company”), one of the largest integrative healthcare systems in the United States, is pleased to announce that it has completed an early conversion of its promissory note (“Note”) held by Merida Capital Partners II LP (“Merida”), a US based private equity fund, dated June 17, 2020. The principal amount of $3M USD will be converted in full. Merida will be granted 10,412,250 common shares of CB2 based on the 8-day VWAP of $0.38 CAD. With the shares received from this debt conversion, Merida continues to strengthen its position in CB2 as a reporting insider for with total holding of 25,603,945 common shares.

Under the terms of the Note, the principal amount of $3M USD will become payable on December 24, 2022 and carries an annual interest rate of 8%. 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 $0.30 CAD for 20 consecutive trading days, then the outstanding amounts owed under the Note will be converted into that number of common shares  based on the 20-day VWAP, less a discount of 10%. Based on early conversion, the Note has been converted at the 8-day VWAP with no discount.

Conversion of the Note will save the company approximately $0.5M USD in interest payments over the remainder of the Term. Additionally, the Company has strengthened its balance sheet by eliminating 100% of its long-term debt. The Company also announced a full quarter of profitability in Q2 2020 and expects this to continue for Q3 2020. The Company also recently completed an oversubscribed private placement of $5.13M CAD bringing the total cash position to $5.5M CAD. The Company forecasts strong growth organically as it continues to expand its primary care services in the US through its physical clinics and telemedicine offerings.

As part of its stated strategy of carefully executing upon an extensive M&A pipeline of medical clinics and services in the US, the Company recently completed the acquisition of Maverick County Medical in Texas with revenues of $1.6M CAD and EBITDA of $0.3M CAD for a total purchase price of $0.98M CAD. The Company is now well positioned to continue working through its deal pipeline and expects strong deal flow in the future. With a strong cash position, no long-term debt and a profitable business operation, the Company is well positioned to execute this strategy.

“We continue to focus the Company to be on the offensive and establish the foundation for rapid growth in the US healthcare market, “said Prad Sekar, CEO, CB2 Insights. “The early conversion of our promissory note from Merida continues to validate our strength in the US with a strong financial partner that is committed to supporting our growth. The US healthcare market has never been as attractive to providers of innovative solutions. With over 40 years of collective management experience in practice management and healthcare operations, coupled with excess cash on hand and a strong infrastructure, we are well positioned to deliver our innovative multi-disciplinary health solutions to benefit millions of Americans.”

“Merida has always sought to partner with companies that develop valuable assets in data and technology that can be extrapolated to succeed in traditional industries.  Our firm’s voluntary note conversion further supports Merida’s belief that CB2 stands on the precipice of disrupting traditional healthcare channels while continuing to deliver innovative healthcare solutions both in clinic and virtually.” said Mitch Baruchowitz, Managing Partner of Merida.

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