Cannara Moves Forward with Convertible Debenture Settlement Plans
MONTREAL -- Cannara Biotech Inc. (“Cannara”, “the Company”) (TSXV: LOVE, OTCQB: LOVFF, FRA: 8CB0) is making headlines with its recent announcement regarding a substantial financial decision. The Company is taking decisive action to address approximately $6.2 million in outstanding debt, which comprises $4.7 million in principal and about $1.5 million in accrued interest. This bold move is set to unfold through the issuance of an impressive number of shares.
Debenture Settlement Overview
Cannara intends to clear its financial slate with a plan that involves issuing an aggregate of 3,462,763 common shares, at an attractive deemed issuance price of $1.80 per share. Out of this total share issuance, 851,652 shares will specifically address interest payments owed to Olymbec Investments Inc. (“Olymbec”). This strategy is consistent with the terms outlined in the existing Olymbec Convertible Debenture.
Background on the Convertible Debenture
The original Olymbec Convertible Debenture was issued for a total principal amount of $5.7 million. Earlier this year, the Company repaid $1 million, which successfully brought the outstanding principal down to its current amount of $4.7 million. This move showcases Cannara’s proactive approach to managing its finances amid the evolving landscape of the cannabis industry.
Corporate Governance and Related Party Transactions
As part of this proposed share issuance, Mr. Derek Stern, a non-independent director of Cannara, holds significant interests in Olymbec. Therefore, this transaction is classified as a “related party transaction” under TSXV Policy 5.9. Nevertheless, the Company plans to leverage a regulatory exemption from the necessity of obtaining minority shareholder approval, given that the market impact of this transaction falls below the stipulated threshold of 25% of Cannara's market capitalization.
Impact of the Proposed Issuance
Upon completion of the Proposed Olymbec Share Issuance, Olymbec is projected to possess a total of 23,792,920 common shares of Cannara. Concurrently, Mr. Stern will hold 376,040 shares personally. Collectively, these holdings will amount to approximately 25.47% of the Company’s total issued and outstanding shares post-transaction.
Additionally, the directors of Cannara, who are independent, have approved the Proposed Olymbec Share Issuance. This reflects the Company’s organizational commitment to transparency and governance.
Clarifications on Investor Relations
In conjunction with this financial news, Cannara has also made clarifications regarding its investor relations efforts. The Company recently renewed its agreement with Bristol Capital Ltd., which includes granting 40,000 stock options priced at $1.80 per common share. These options are set to expire three years following their grant date, corroborating the Company’s engagement in investor relations and its recognition of Bristol’s contributions.
About Cannara Biotech Inc.
Cannara Biotech Inc. is renowned for its vertically integrated operations in the cannabis sector, producing premium-grade products at competitive prices. With extensive facilities in Québec, Cannara is strategically positioned to leverage cost-effective electricity to enhance its production capabilities. The Company aims to provide high-quality cannabis products for the Canadian market while maintaining affordability.
For those interested in learning more about Cannara’s operations, additional information is available through their investor relations platform.
Frequently Asked Questions
What is Cannara's plan for settling its debt?
Cannara intends to settle approximately $6.2 million in debt by issuing common shares at a price of $1.80 per share.
How many common shares will be issued?
A total of 3,462,763 common shares will be issued, with a portion specifically allocated for interest payments.
Who holds significant interests in Olymbec?
Mr. Derek Stern, a non-independent director of Cannara, has significant interests in Olymbec and is involved in this transaction.
How will this issuance impact existing shareholders?
After the issuance, Olymbec and Mr. Stern will collectively own about 25.47% of Cannara's total outstanding shares.
What role does Bristol Capital play in Cannara's operations?
Cannara has engaged Bristol Capital for investor relations services, which includes issuing stock options as part of their agreement.
