Cannabis Life Sciences Announces Amendments To Convertible Debentures And Underlying Warrants

CLS Holdings USA, Inc. CLSH CLSH, a diversified cannabis company operating as Cannabis Life Sciences, announced that following receipt of the requisite approval of debenture holders and the Canadian Securities Exchange, it has amended the terms of its outstanding $13.2 million principal amount unsecured convertible debentures issued December 12, 2018 by, among other things:

  • Permitting the mandatory conversion, in the company's discretion, of $7.9 million in principal amount of the December debentures plus $132,192 in accrued interest on the December debentures into units at the reduced conversion price of $0.07125 per unit.

  • Decreasing the conversion price of the remaining December debentures to $0.10 per unit.

  • Reducing the mandatory conversion VWAP provision in the December debentures from $0.60 to $0.20.

  • Providing for a reduced conversion price to holders of the December debentures who elect to covert more than the mandatory conversion amount of December debentures on or prior to the date of the meeting of debenture holders.

  • Changing the maturity date of the December debentures so that half of the remaining December debentures mature on December 31, 2023 and the remaining December debentures mature on December 31, 2024.

  • Providing for the payment of interest accruing between July 1, 2022 and December 31, 2024 so that one-third of the total scheduled interest is paid on December 31, 2023 and the balance of the accrued interest is paid on December 31, 2024.

  • Subject to the receipt of regulatory approvals, granting a security interest in certain of the company's assets to the holders of the December debentures and to other holders of the company's debt, now or in the future, as the company may elect. All prices described above are prior to the reverse split described below.

Reverse Split

Subject to the receipt of regulatory approvals, the company plans to effect a 1-for-4 reverse stock split effective at the opening of business on September 21, 2022. As a result of the reverse stock split, every 4 shares of issued and outstanding common stock will be exchanged for 1 share of common stock, with any fractional shares being rounded up to the next higher whole share. Immediately after the reverse stock split becomes effective, the company will have approximately 32 million shares of common stock issued and outstanding. The authorized common stock will also be reduced as a result of the reverse stock split from 750 million shares to 187.5 million shares.

Photo by Giorgio Trovato on Unsplash

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