CBD Global Sciences Inc. (CNSX:CBDN) executed a definitive agreement to acquire Resinosa LLC on September 29, 2021. As per the terms of the transaction, CBD Global Sciences Inc. will issue 5.4 million Class A Common Shares and 0.09 million Series A Preferred Shares, 4.3 million of the common shares shall be escrowed and released in equal monthly amounts over a 24-month period. CBD Global Sciences Inc. will also issue a two-year convertible note in the principal amount of $1.5 million with interest accruing at 8% per annum.

The note is convertible into units of CBD Global, each unit consisting of 0.35 common share and 0.0065 preferred shares, at a conversion price of $0.27 per unit. This note will be interest only for the 24-month period with a balloon payment at maturity and interest will be payable in units at the strike price. In addition, CBD Global shall issue up to an additional 4.4 units no later than April 30, 2023 if greater than $0.5 million.

This issuance shall be reduced to 2.2 million units if the net income number is greater than $0.25 million but less than $0.5 million for the same period; and an additional 4.4 million units no later than April 30, 2024 if greater than $1 million of net income. This issuance shall be reduced to 2.2 million units if the net income number is greater than $0.5 million but less than $1 million for the same period. For the year ended December 31, 2020, Resinosa reported total assets of $1.4 million, sales of $0.6 million, and net loss of $0.1 million.

Concurrently with closing of the acquisition, the Board of CBD Global has approved the appointment of Jeff Hays to the Board of Directors of CBD Global Sciences Inc. Closing of the acquisition remains subject to final due diligence by both parties, to be completed on or before October 14, 2021 and the transaction is expected to close on or before October 15, 2021.