Zenabis Provides Update on Previous Financing

 

Vancouver, British Columbia – February 08, 2019 – Zenabis Global Inc. (“Zenabis”) (TSXV: ZENA) is pleased to provide an update on a previously-announced Secured Convertible Debenture financing. Zenabis issued a secured convertible debenture in October 2017, on which it drew $4,150,000 on October 17, 2018. In connection with completion of its RTO, Zenabis was not permitted to draw the remaining $20,850,000.

Subject to receipt of all required regulatory approvals, Zenabis and the lender have agreed to the following amendment of the terms of the Secured Convertible Debenture for the current undrawn amount of $20,850,000:

Term Secured Convertible Debenture Agreement as of 17 October 2018 Proposed Amended Secured Convertible Debenture Agreement as of 8 February 2019
Conversion Right Right to convert 100% of the Secured Convertible Debenture at $4.04 per share (a 20% discount to the price of the private placement announced November 27, 2018) Continuing Right to convert the $4,150,000 principal amount drawn 17 October 2018 at $4.04 per share (a 20% discount to the price of the private placement announced November 27, 2018)
Warrants No warrants 2,593,283 warrants, each entitling the lender to acquire one Zenabis share for a period of one year at a price of $4.02 per share (50% warrant coverage)

The result of the amendment is that the maximum total dilution is as follows:

Secured Convertible Debenture Agreement as of 17 October 2018 Proposed Amended Secured Convertible Debenture Agreement as of 8 February 2019
A maximum of 1,027,857 common shares in Zenabis from the current drawn amount A maximum of 1,027,857 common shares in Zenabis from the current drawn amount
A maximum of 6,191,911 common shares in Zenabis upon the remainder of $20,850,000 being drawn A maximum of 3,621,140 common shares in Zenabis upon the remainder of $20,850,000 being drawn

Andrew Grieve, the Chief Executive Officer of Zenabis, remarked, “We are pleased to have negotiated the opportunity to meaningfully reduce the maximum amount of dilution that will result from drawing on the remainder of the Secured Convertible Debenture.”

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Zenabis

Zenabis is a significant licensed cannabis cultivator of medical and recreational cannabis, and employs staff coast-to-coast, across facilities in Atholville, New Brunswick; Delta and Langley, B.C.; and Stellarton, Nova Scotia. In addition to gaining technologically advanced knowledge of plant propagation, the recent addition of state of the art greenhouses in Langley provides Zenabis with 3.5 million square feet of facility space that can, upon full conversion, be dedicated to cannabis production.

If all facility space is fully built out and dedicated to production, Zenabis will own, and have access to, 660,000 square feet of high quality indoor cannabis production space, as well as 2.1 million square feet of greenhouse space at its Langley facility (an additional 700,000 square feet of greenhouse space will be used to continue the existing propagation business, to be converted at such a time that is beneficial to the strategic position of the company), strategically positioned on Canada’s coasts. These facilities, if fully converted for cannabis production, would have the design capacity to yield 479,300 kg of dried cannabis annually, for both national and international market distribution. The Zenabis brand name is used among the medical market, while Namaste is used to service the recreational market.

The management team at Zenabis has significant experience in finance, agriculture, technology, pharmaceutical sales, consumer packaged goods, international distribution and brand marketing. Leadership is backed by the expertise of a Chief Growing Officer, a Chief Science Officer and Chief Medical Officer.

This news release contains statements that may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information may include, among others, statements regarding the future plans, costs, objectives or performance of Zenabis, or the assumptions underlying any of the foregoing. In this news release, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. In this news release, forward-looking statements relate, among other things, to: Zenabis being entitled to draw the remaining principal amount of the Secured Debentures on the terms specified above. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur. Forward-looking information is based on information available at the time and/or management’s good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond Zenabis’ control. These risks, uncertainties and assumptions include, but are not limited to, those described Zenabis Management Information Circular dated November 23, 2018, a copy of which is available on SEDAR at www.sedar.com, and could cause actual events or results to differ materially from those projected in any forward-looking statements. Furthermore, any forward-looking information with respect to available space for cannabis production is subject to the qualification that management of Zenabis may decide not to use all available space for cannabis production, and the assumptions that any construction or conversion would not be cost prohibitive, required permits will be obtained and the labour, materials and equipment necessary to complete such construction or conversion will be available. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Zenabis does not intend, nor undertake any obligation, to update or revise any forward-looking information contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.

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For more information, visit: https://www.zenabis.com.

Media Relations
media@zenabis.com
1-844-523-8679

Investor Relations
Shobana Thaya
Zenabis Global Inc.
Invest@zenabis.com
1-844-523-8679