C21 Investments Inc. (“C21 Investments” or the “Company”) (CSE: CXII and OTC: CXXIF) advises that it has reached agreement to restructure payments under a US$30 million promissory note issued on January 15, 2019 (“Note”) 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 instalment of US$6.0 million due July 1 to accept such amount in an instalment of US$2 million plus interest, which has been paid, and further monthly instalments of $800,000 per month plus interest commencing on August 1, 2019 and continuing for the next ensuing four months when the monthly instalments increase to US$2 million.
As a term of such restructuring, C21 Investments and the vendors of Swell Companies (“Swell”) and Phantom Farms/SDP Development Group LLC (“Phantom”) 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 afford C21 Investments a strong balance sheet with obligations owed to a single creditor whose interests are aligned with the Company’s” 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 endeavour going forward,” said Sonny Newman.
The CSE has not accepted responsibility for the adequacy or accuracy of this release.