Mr. Jeffery Mascio reports
CANNABIS ONE HOLDINGS INC. ANNOUNCES RETRACTION OF ACCELERATION OF WARRANT EXPIRY DATE AND APPOINTMENT OF NEW BOARD MEMBER
Further to the press release dated May 27, 2019, Cannabis One Holdings Inc. is retracting its previously announced acceleration notice of certain Class A subordinate voting share and certain Class B super voting share purchase warrants, effective June 14, 2019, which were assumed by the company pursuant to the acquisition of Bertram Capital Finance Inc., and has appointed Frank Sur to the company's board of directors.
Retraction of discretionary warrant acceleration
In respect of the company's decision to immediately retract the acceleration notice, Cannabis One chief executive officer Jeffery Mascio commented: "Cannabis One is currently taking all steps necessary to correct the regrettable decision to accelerate the expiry date of the applicable warrants, beginning with the reversal of this action, to restore the trust and support of all shareholders. Without indulging speculation, Cannabis One received poor capital markets advice from a newly introduced financial adviser that insisted on a reduction in future dilutive securities to better facilitate additional capital raises moving forward. Instead of then assisting the company with raising capital, Cannabis One later learned that this adviser improperly facilitated a syndicate of structured short selling that clearly impacted the trading price of Cannabis One's listed shares, which naturally resulted in the immediate termination of this relationship."
Mr. Mascio continued: "Cannabis One has experienced considerable growth since its public listing and has every intention to increase this velocity through the organic growth of its existing brands and through the continued execution of acquisitions. It is important to note that, with over 17 acquisitions in our immediate pipeline, the company will continue to increase its actual revenues and still anticipates facilitating the growth necessary to achieve management target of over $100-million (U.S.) in annualized run rate revenue (resulting in management-estimated forward-looking EBITDA [earnings before interest, taxes, depreciation and amortization] projected to be approximately $15-million (U.S.) to $20-million (U.S.)) by the end of December, 2019. That will be an exciting entrance point to 2020."
The warrants are still governed by two warrant indentures each dated Feb. 25, 2019, between the company and Odyssey Trust Company. Pursuant to the terms of the warrant indentures, the warrants are either exercisable to purchase: (a) SUB shares for 50 cents or SVS shares for $50; or (b) SUB shares for 75 cents or SVS shares for $7.50. The only effect of this reversal of the acceleration notice is that these warrants and each respective warrant indenture will continue in accordance with their original terms. As originally intended, for the benefit of the investors who have supported the company since its inception, these warrants will continue to expire on Oct. 17, 2020, unless exercised earlier in accordance with their terms.
The company recognizes the unwavering support of its early investors and is taking this action to, in turn, show its own recognition of the value of these critical shareholder relationships. To be clear, it is now the intention of the company to reinstate all of the warrants that have already been exercised in accordance with their original terms and to proceed to return any shares issued accordingly to treasury. The company would like to thank so many of its dedicated investors for demonstrating their commitment to the company by exercising their warrants but is now retracting its acceleration notice.
Board of directors resignation and appointment
The company further announces that it has accepted the resignation of Bernard Radochonski from the company's board of directors, effective immediately. The company acknowledges Mr. Radochonski for his contributions as a significant shareholder and early supporter of Cannabis One, and wishes him the best with his future endeavours.
The company is pleased to announce the appointment of Mr. Sur to the board of directors of the company. Mr. Sur is a partner with Gowling WLG, an international law firm with more than 1,400 lawyers worldwide. Mr. Sur has been practising in the areas of mergers and acquisitions, corporate finance, and commercial law for nearly 15 years, and has extensive experience in cross-border transactions in various sectors, including cannabis. Mr. Sur has been recognized in the Canadian Legal Lexpert Directory during the last three consecutive years as a repeatedly recommended lawyer in corporate mid-market transactions, and brings valuable experience and insight to the board of directors of the company.
About Cannabis One Holdings Inc.
Cannabis One Holdings is focused on aggregating and optimizing popular cannabis brands throughout North America. With its unique, franchise-ready retail brand, the Joint, and through targeted acquisition and partnership opportunities, Cannabis One intends to become the premier, globally recognized house of brands, holding a client portfolio of award-winning products with an extensive market footprint. Through the company's the Joint retail concept, Cannabis One intends to leverage the consumer and brand data harvested from its retail locations to bring data-driven analytics to an emerging, branded industry. For consumers, Cannabis One desires to become the definitive source for unparalleled product selection and renowned service in an otherwise fragmented market.
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