C21 Completes Restructured Phantom Farms Acquisition
VANCOUVER, Feb. 19, 2020 /CNW/ – PRESS RELEASE – C21 Investments Inc. has announced that it has completed the restructuring of the purchase of Phantom Farms and related companies, including SDP Development Group, LLC. C21 has elected to purchase the real estate for the two Phantom Farms’ outdoor grows from SDP Group, which strengthens C21’s balance sheet as well as lowers the future lease obligations in Oregon for the company. The company believes the subject real property assets, which exceed 60 acres in Southern Oregon, are intrinsic to the Phantom Farms brand legacy. Including the restructured agreement and purchased real estate, C21’s forward lease obligations are reduced by $370,000 per year.
Total consideration paid by C21 to SDP Group for both the restructuring of the purchase agreement as well as the real property consisted of the issuance of 7,132,041 common shares of C21 at a deemed issue price of CAD$0.804 per share. The shares are subject to a statutory hold period of four months plus one day and applicable U.S. securities resale restrictions. The restructuring was completed, and these shares were issued effective Feb. 12, 2020.
« Our latest iteration of the restructure did not include real estate, but we concluded that the long-term value of the Phantom Farms brand is inextricably tied to the iconic outdoor farms in Southern Oregon. We are pleased that we could work out a new deal for the real property with payment in shares of the company » said Michael Kidd, C21 Investments’ CFO.
The specific details of the restructuring are as follows:
a) The purchase of the six Phantom Farms real estate assets in the original purchase agreement dated Oct. 16, 2018 among C21 and SDP Group, has been terminated;
b) SDP Group has transferred to C21 the two outdoor farms located in Eagle Point, Ore.;
c) SDP Group has released C21 from any further purchase obligations on the remaining properties held by SDP Group in Oregon; Lease arrangements have been amended to include reduction of rent under certain leases as well as termination of leases on other properties held by SDP Group located in Oregon.