VANCOUVER, July 8, 2019 /CNW/ PRESS RELEASE - C21 Investments Inc. advises that it has reached agreement to restructure payments under a US$30 million promissory note, with interest at 10%, issued on Jan. 15, 2019, to Mr. Sonny Newman in connection with the Company's purchase of Silver State Relief LLC and Silver State Cultivation LLC.
The Note, issued to Mr. Newman as part of the Silver State purchase
terms, is secured against the Silver State companies and their assets and had
an outstanding principal balance of US$27 million on June 30, 2019. Mr.
Newman has agreed in lieu of the principal installment of US$6 million due
July 1 to accept such amount in an installment of US$2 million plus interest,
which has been paid, and further monthly installments of $800,000 per month plus
interest commencing on Aug. 1, 2019 and continuing for the next ensuing four
months when the monthly installments increase to US$2 million.
As a term of such restructuring, C21 Investments and the vendors of Swell
Companies and Phantom Farms/SDP Development Group LLC have reached an agreement in principle to accelerate the
staggered payments under their purchase agreements. Under the terms of such
agreement in principle, the vendors of Swell and Phantom would be issued a total
of 16,215,416 shares of C21 Investments at C$1.05 per share in settlement of
the US$13.01 million payable to them as payment for the real property owned by
Phantom and all other long-term obligations owing to such vendors.
"These arrangements, upon completion, will result in C21 having a
single secured creditor whose interests are aligned with the Company's and a
strong Balance Sheet going forward" said Michael Kidd, Chief Financial
Officer of C21 Investments. "This will provide the Company with the financial
flexibility needed to capitalize on growth opportunities, and to continue with
our focus on enhancing long-term value for all of our stakeholders –
shareholders, employees and communities."
"This restructuring will allow the Company to move forward with its plans
and as the Company's largest shareholder, I am pleased to participate in this
endeavor going forward," said Sonny Newman.
