RMMI Corp., a licensed producer and processor under the Cannabis Act, announced the closing of the previously announced biomass purchase of 136,077 kg of high CBD hemp with Clearwater CannGrow Ltd. and has issued 9,555,556 common shares in the capital of RMMI to Clearwater in partial satisfaction of one component of the Hemp Biomass Purchase. The Share Consideration is subject to a voluntary escrow. An additional 666,666 Common Shares are expected to be issued in the near future at the direction of Clearwater.
RMMI is pleased to welcome Clearwater’s owner Joey Bedard-Burnet as the new Chief Operating Officer of RMMI.
RMMI is also pleased to announce that lenders representing the full $1,000,000 principal amount of RMMI secured notes have agreed to a restructuring and repayment plan. The full principal amount of the Notes plus all accrued interest and fees (which totaled approximately $400,000 at June 30, 2020) has been converted to a $1,500,000 mortgage loan. The mortgage loan will be repaid monthly starting in October 2020 over a one-year period and accrue interest at 12% per annum. In consideration for the Restructuring, RMMI has issued to the lenders 1,500,000 Common Share purchase warrants entitling the holders to acquire one Common Share at an exercise price of $0.255 for a period of three years from issuance. Certain officers and directors of the Company (collectively, the “Insiders”) participated in the Restructuring.
RMMI has also entered into a management services agreement with Optimal Capital Advisors, an entity controlled by Eugene Chen, a director of the Corporation. Under the terms of the Agreement, which is effective June 1, 2020, the Corporation will issue 45,000 Common Shares per month as compensation for services provided to RMMI. The Agreement expires on December 31, 2020.
The Agreement with Optimal Capital Advisors and participation by the Insiders in the Restructuring both constitute a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(1)(b) of MI 61-101 in respect of the Insiders’ participation in the Restructuring and the Agreement with Optimal Capital Advisors.
In addition, RMMI has also issued 1,900,000 Common Shares and 500,000 Common Share purchase warrants with an exercise price of $0.26 expiring three years from issuance to its financial advisor and finders under the Acquisition.
RMMI is an Alberta based company whose wholly owned subsidiary, Rocky Mountain Marijuana Inc., is licensed under the Cannabis Act (Canada) to cultivate, produce, process and sell cannabis in various forms. RMMI’s vision is to build a low cost, highly efficient, hemp processing and CBD extraction business focused on serving a premier set of customers in Canada and abroad.