Mr. Scott Secord reports
RISE LIFE SCIENCE PROVIDES OPERATIONAL UPDATE
Rise Life Science Corp. will discontinue its physical retail operations in California and will focus its efforts on distribution partnerships and on-line sales of its nano hemp-extract oral sprays, quick-dissolve oral tablets, and topical balms and lotions products.
Scott Secord, executive chairman of Rise, commented: "This is not a decision that was taken lightly, but it is the best option that is available to the company today. The sale of our products in the United States at physical retail locations has not met our expectations. We will now focus our efforts on existing and new distribution partnerships, as well as on-line sales through our own website and third party sites such as Amazon."
The company also announces today that it will be returning the escrowed proceeds of its April 1, 2019, financing. On April 1, 2019, the company announced that it had completed a third tranche of its previously announced offering of unsecured convertible notes and common share purchase warrants of the company. Proceeds of the third tranche of the offering, together with the notes and warrants comprising the third tranche of the offering, were deposited with an escrow agent upon closing. If the company completed a cannabidiol-related (CBD) investment, the certificates representing the escrowed units would be automatically released from escrow to the subscribers therefor and the escrowed proceeds would automatically be released from escrow to the company. The company did not complete a qualifying CBD-related investment and therefor the escrowed proceeds are being returned to subscribers and the escrowed units are being returned to the company for cancellation.
At this time, the company cannot meet its current obligations to holders of its convertible notes issued on Nov. 14, 2018, and Dec. 4, 2018, in the aggregate principal amount of $5,525,000. The company is in co-operative discussions with the noteholders to come to a mutually beneficial resolution. The company does not currently have positive cash flow to meet its continuing operational requirements and debt service and repayment obligations and requires a combination of additional financing and a restructuring of its existing debt structure to enable it to continue operations. While the company is actively pursuing other sources of funds that may be available to finance such needs, additional financing may not be available to it or, even if available, the terms of such financing might not be favourable to the company and might involve substantial dilution to existing shareholders. If the company fails to raise additional funds and restructure its existing debt, it is doubtful that it will be able to continue as a going concern. To date, none of the noteholders or other creditors have taken any action or commenced any proceedings with respect to the enforcement of any of its rights or remedies under such agreements. The company continues to try to raise sufficient funds to settle all unpaid amounts that are due and payable to creditors or amend its existing agreements with them. However, any default under the notes would have a material adverse effect on the business, financial condition and continued operations of the company.
The current difficult market conditions for cannabis companies has been a contributing factor, along with the sales challenges the company has encountered, requiring the company to alter its sales operations in the United States. The company continues to use every effort to reduce expenditures, seek additional capital, and restructure or refinance its indebtedness, including significantly decreasing its United States work force.
We seek Safe Harbor.
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