Christina Lake Cannabis Corp announced a non-brokered financing to issue secured convertible subordinated notes for the gross proceeds of CAD 2,500,000 on February 5, 2024. Certain directors and officers of the company may acquire financing notes under the offering. The Note bears interest at a rate of 10% per annum for year 1, 15% per annum for year 2, and 20% per annum for the remaining 3 years.

Repayment of the Note shall be interest only payments paid annually on the anniversary dates for the first 24 months of the Term, then quarterly interest payments thereafter, and CAD 1,000,000 principal repayments on or before each Anniversary Payment Date until the remaining principal amount of this Note is satisfied in full. Outstanding principal and unpaid interest from the Note will be convertible into common shares at a conversion price of CAD 0.05 per common share during the Term. The Vendor shall have the right to convert the Note at any time, subject to a notice period.

The Financing Notes will also be granted a subordinated security interest over another existing property of the Company. The Financing Notes will bear interest and repayment at the same schedule as the above Note issuable to the Vendor in the Transaction. Outstanding principal and unpaid interest from the Financing Notes will be convertible into common shares at a conversion price of CAD 0.05 per common share during the Term.

Subscribers shall have the right to convert the Financing Notes at any time, subject to a notice period. Additionally, the Company shall have the right to repay the Financing Notes at any time during the Term, together with prepayment of any remaining interest payable under the Financing Notes. The Company expects to close the initial tranche of the Offering on or about February 26, 2024.