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Christina Lake Cannabis provides financing announcement

(Globe Newswire) Vancouver — Christina Lake Cannabis Corp., a leading producer of high quality extracts, advanced products and sun grown cannabis, is pleased to provide details regarding a proposed non-brokered private placement.

The company announces that it intends to complete a non-brokered private placement with gross proceeds of up to $5,000,000. The company will be issuing convertible promissory notes secured by land and buildings. The note bears interest at a rate of 15 per cent per annum over a term of 36 months. Repayment of the note shall be in the form of interest only payments for the first 15 months and a blended principal and interest payment for the remaining term.

Outstanding principal and interest from the notes will be convertible into common shares at a conversion price of $0.06 per common share during the term. The company shall also have the right to redeem or repay the notes at any time during the term. The proceeds from the offering are expected to be used for repayment of outstanding debentures, working capital and general corporate purposes. The first tranche of the offering is expected to close on or about September 11, 2023, or such other date or dates that the company may determine, subject to the receipt of all required regulatory approval, including acceptance of the CSE. All securities issued in connection with the offering will be subject to a hold period of four months and one day from the closing date, in accordance with applicable Canadian securities laws.

Certain directors and officers of the company may acquire notes under the offering. Such participation will be considered to be a “related party transaction” as defined under Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions (MI 61-101). The company anticipates relying on exemptions from the minority shareholder approval and formal valuation requirements applicable to the related-party transactions under sections 5.5(b) and 5.7(1)(b), respectively, of MI 61-101, as neither the fair market value of the notes to be acquired by the participating directors and officers nor the consideration to be paid by such directors and officers is anticipated to exceed $2,500,000.

The securities issued under the offering have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and were not to be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or in any other jurisdiction in which such offer, solicitation or sale would be unlawful.

The company has also entered into an agreement for the purchase of additional processing equipment to fulfill growing demand for our high-quality outdoor flower. Under the agreement the company will purchase $277,675 CAD (+HST) worth of equipment, with monthly repayments extending for 36 months, beginning on October 15, 2023. Payments for the first 15 months of the term are interest only, with blended principal and interest payments commencing after December 15, 2024