C21 Announces Closing of C$4 Million Private Placement of Convertible Debenture Units

In This Article:

Vancouver, British Columbia--(Newsfile Corp. - May 6, 2024) - C21 Investments Inc. (CSE: CXXI) (OTCQX: CXXIF) ("C21" or the "Company") is pleased to announce the closing of its non-brokered private placement offering of convertible debenture units of the Company (collectively, the "Convertible Debenture Units") whereby the Company issued a total of 4,000 Convertible Debenture Units at a price of C$1,000 per Convertible Debenture Unit for aggregate gross proceeds of C$4,000,000 (the "Private Placement").

The net proceeds raised from the Private Placement will be used by the Company to fund the Company's wholly-owned Nevada subsidiary, Silver State Relief, LLC's ("Silver State") acquisition of Deep Roots Harvest, Inc.'s ("Deep Roots") assets related to the operation of their 6,500 square-foot, purpose-built, operational retail cannabis dispensary located in Southern Reno, Nevada. This acquisition is in accordance with the terms of the asset purchase agreement entered into between Silver State and Deep Roots (the "Dispensary Acquisition"). See news release dated March 15, 2024. The net proceeds from the Private Placement, combined with the Company's cash reserves, will be used to satisfy the remaining purchase price of US$3.4 million for the Dispensary Acquisition.

Each Convertible Debenture Unit offered under the Private Placement is comprised of: (i) one convertible debenture of the Company (each, a "Convertible Debenture") in the principal amount of C$1,000 (the "Principal Amount") convertible into common shares of the Company ("Common Shares", and each such Common Share, a "Conversion Share"); and (ii) 1,000 detachable Common Share purchase warrants (each, a "Warrant"), with each Warrant exercisable into one Common Share at a price of C$0.55 per share for a period of 30 months from the issue date of the Convertible Debenture Units (the "Issue Date"). The Convertible Debentures are governed by a trust indenture (the "Debenture Indenture") dated May 6, 2024 entered into between the Company and Alliance Trust Company ("Alliance"), as trustee, registrar and transfer agent in connection with the Convertible Debentures.

Subject to earlier conversion, redemption or purchase, the repayment of the Principal Amount of the Convertible Debentures will be made in twenty-five (25) equal monthly instalments (each, a "Monthly Instalment"), each equal to the outstanding Principal Amount of the Debentures on the Issue Date divided by 25, with the final payment to be made on such date that is 30 months from the Issue Date (the "Maturity Date"). Each Monthly Instalment shall be paid on the last day of each calendar month (each, a "Monthly Instalment Date"), beginning on the last day of the sixth calendar month from the Issue Date, with the first of such Monthly Instalments collectively due and payable on October 31, 2024 (the "Release Date"). Each Monthly Instalment shall be paid to the holders of Convertible Debentures (each, a "Debentureholder") in cash, unless a Debentureholder elects to receive Common Shares as payment for the Principal Amount payable on any given Monthly Instalment Date equal to that number of Common Shares obtained by dividing the aggregate amount of the Monthly Instalment by the Conversion Price (as defined below). In the event that the Convertible Debentures are converted into Common Shares by a Debentureholder or redeemed by the Corporation in accordance with the terms of the Debenture Indenture prior to the Maturity Date, the amount of each remaining Monthly Instalment on the date of such conversion or redemption shall be proportionally adjusted to reflect the outstanding Principal Amount after the occurrence of such conversion or redemption.