SpeakEasy Announces First Amended and Restated Convertible $3.1 Million Loan
ROCK CREEK, BC - TheNewswire – December 3, 2021 – SpeakEasy Cannabis Club Ltd. (CSE:EASY) (Frankfurt:39H) (CNSX:EASY.CN) (the “Company” or “SpeakEasy”), a holder of a federal licence to cultivate, process and sell cannabis under the Cannabis Act is pleased to announce that it has entered into a first amended and restated convertible loan agreement among the Company, 10161233 Canada Limited, 1244726 B.C. Ltd. (the “Lender”), 1193213 B.C. Ltd. (the “Finder”) and Bhayana Ventures Ltd. dated December 3, 2021 (the “Amended and Restated Agreement”), pursuant to which the parties have agreed to amend and restate the original convertible loan agreement among the parties dated April 21, 2020 (“Original Loan Agreement”) pursuant to which the Lender loaned an aggregate principal amount of $2,000,000 (the “Original Advance”) to SpeakEasy.
Under the terms of the Original Loan Agreement, the Borrower was to pay on the first anniversary of the closing date:
(i) all interest accrued to that date on the Original Advance (the “Unpaid Interest”), and
(ii) to the Finder, a finder’s fee in the amount of $190,000.
Speakeasy did not make such payments and has requested and the Lender has agreed to add the Unpaid Interest and to make certain other amendments to the terms of the Original Loan Agreement. As a result of the amendments, the principal amount of the Loan will increase of $3,100,000.
In accordance with the terms and conditions of the Amended and Restated Agreement, the Loan will continue to accrue interest at a rate of 55% per annum. In addition:
(i) unpaid interest from April 21, 2021 until November 4, 2021 totals $915,562 and is due 15 days from the Closing Date.
(ii) all interest accruing from and following November 4, 2021 shall be payable as follows:
A. by payment of the amount of $60,000 on December 31, 2021;
B. by the payment of the amount of $60,000 per month on the 4th day of each month commencing on January 4, 2022 through to Maturity Date;
C. with respect to any remaining interest accrued but unpaid as of the Maturity Date, the remainder of all such interest.
(iii) SpeakEasy has agreed to pay second finder’s fee in the amount of $104,500 payable to the Finder though the issuance of common shares on or before the Closing Date at a deemed price of $0.42 per share or 248,810 common shares, all in accordance with applicable securities laws. The common shares will be subject to a hold period of four months and a day from the date of issuance.
The Company also announces that Deborah Cotter has tendered her resignation as Corporate Secretary and Chief Compliance Officer of the Company with an effective date of February 28, 2022. Ms. Cotter has been a valued member of the SpeakEasy team and the Company wishes her well in her future endeavors.
Management Cease Trade Order
Further to its news release of November 25, 2021, the Company also confirms that the British Columbia Securities Commission has granted the Company a management cease trade order with respect to the delayed filing of its audited financial statements for the year ended July 31, 2021. The Company is working diligently with its auditors and anticipates that it will be in a position to file its financial disclosure by no later than December 15, 2021.
About SpeakEasy Cannabis Club Ltd.
SpeakEasy Cannabis Club Ltd. holds a cultivation, processing and sales licence issued by Health Canada under the Cannabis Act. SpeakEasy owns 290 acres of land in Rock Creek, British Columbia, and leverages five generations of farming experience in B.C. as well as its favourable location to grow and process high-quality cannabis products at low cost. SpeakEasy cultivates small batch, high quality craft cannabis at scale in a portion of its 63,200 square foot indoor cannabis complex and has completed its harvest of its 60-acre outdoor field.
On behalf of the Board of the Directors
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This news release contains statements that constitute "forward-looking statements." Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause SpeakEasy’s actual results, performance or achievements, or developments in the industry to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "potential" and similar expressions, or that events or conditions "will," "would," "may," "could" or "should" occur.
Forward-looking statements in this document include statements concerning SpeakEasy’s intention to file its audited financial statements and related financial disclosure for the year ended July 31, 2021 by December 15, 2021, and its expectation to produce and sell high quality craft cannabis and all other statements that are not statements of historical fact.
Although SpeakEasy believes the forward-looking information contained in this news release is reasonable based on information available on the date hereof, by their nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements.
Examples of such assumptions, risks and uncertainties include, without limitation, assumptions, risks and uncertainties associated with the global COVID-19 pandemic, including the risk that the Company be deemed a non-essential business and asked to temporarily cease operations; general economic conditions; adverse industry events; future legislative and regulatory developments involving cannabis; the Company’s ability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favorable terms; the cannabis industry in Canada and generally; the demand for cannabis and cannabis related products, the ability of SpeakEasy to implement its business strategies; competition; the ability of SpeakEasy to obtain and retain all applicable licences under the Cannabis Act and other assumptions, risks and uncertainties.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
The Canadian Securities Exchange nor its Regulation Service has approved nor disapproved the contents of this news release.
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