Zenabis Announces Partial Conversion of Secured Convertible Notes

VANCOUVER, Jan. 16, 2020 /CNW/ -  Zenabis Global Inc. (TSX:ZENA) ("Zenabis" or the "Company") is pleased to announce that the holders (the "Noteholders") of the subordinated secured convertible notes of the Company (the "Convertible Notes") have agreed to convert, at a conversion price of $0.155 per common share of the Company (each, a "Common Share"), an aggregate $6,040,176 of the principal amount of the Convertible Notes (the "Immediate Conversion"). An aggregate of 38,968,874 Common Shares will be issued to the Noteholders pursuant to the Immediate Conversion. Following the Immediate Conversion, the aggregate outstanding principal amount of the Convertible Notes will be $11,364,783.

In connection with the Immediate Conversion, the Company will issue an aggregate of 20,129,338 common share purchase warrants (each, a "Warrant") to the Noteholders, each exercisable to acquire a Common Share at a price of $0.20 at any time during the three-year period following the completion of the Immediate Conversion.

The Noteholders were also granted the option to further convert an aggregate $4,064,558 of the principal amount of the Convertible Notes at a conversion price of $0.155 per Common Share, exercisable at any time during the 30 calendar days following the date the Immediate Conversion is completed (the "Conversion Option"). If the Conversion Option is exercised in full by each of the Noteholders, an aggregate of 26,222,947 Common Shares will be issued, and the aggregate outstanding principal amount of the Convertible Notes will be $7,300,226. The Company has also agreed to issue, if the Conversion Option is exercised in full, an aggregate of up to 1,260,260 Warrants to the Noteholders, each exercisable to acquire a Common Share at a price of $0.20 at any time during the three-year period following the exercise of the Conversion Option by the applicable Noteholder.

"We are pleased to be strengthening our financial position through reducing the principal amount outstanding of our existing secured convertible notes," said Kevin Coft, Chief Executive Officer of Zenabis.

The TSX has conditionally approved the Immediate Conversion, the Conversion Option, the listing of the additional Common Shares issuable pursuant to the Immediate Conversion and the Conversion Option and the listing of the Common Shares issuable upon exercise of the Warrants. Listing of these securities is subject to the Company fulfilling standard TSX listing requirements.

All amounts owing under the Convertible Notes not converted pursuant to the Immediate Conversion or the Conversion Option will remain convertible into Common Shares at a price of $1.17 per Common Share.

About Zenabis

Zenabis is a significant Canadian licensed cannabis cultivator of medical and recreational cannabis, and a propagator and cultivator of floral and vegetable products. Zenabis employs staff coast-to-coast, across facilities in Atholville, New Brunswick; Delta, Aldergrove, Pitt Meadows and Langley, British Columbia; and Stellarton, Nova Scotia. Zenabis currently has 96,400 kg of licensed cannabis cultivation space across four licensed facilities. Zenabis has 3.5 million square feet of total facility space dedicated to a mix of cannabis production and cultivation and its propagation and floral business.

Zenabis expects its Zenabis Atholville, Zenabis Stellarton and Zenabis Langley facilities to have a licensed annual production capacity of 143,200 kg of dried cannabis by the end of 2020. The Zenabis brand name is used in the cannabis medical market, while the Namaste by Zenabis and Blazery brand names are used in the cannabis adult-use recreational market, and the True Büch brand name is used for Zenabis' kombucha products.

Forward Looking Information

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 continuing our operational ramp-up, our expected licensed annual capacity and the potential conversion of the Convertible Notes pursuant to the Conversion Option. 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 in the shelf prospectus dated April 9, 2019, 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.

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

SOURCE Zenabis Global Inc.

Media Relations: Email: [email protected], Phone: [phone]; Investor Relations: E-mail: [email protected], Phone: [phone]

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