Bogotá, Colombia--(Newsfile Corp. - July 6, 2022) - Medcolcanna Organics Inc. (CSE: MCCN) ("Medcolcanna", "MCCN" or the "Company"), a leading Canadian and globally integrated medicinal cannabis company with operations in Colombia, is announcing certain corporate updates.
DIRECTOR AND EXECUTIVE COMPENSATION
In an effort to reduce the operating costs of the Company and to conserve capital until the Company achieves financial self-sufficiency, the Company has agreed with certain members of the executive management team and Board of Directors to reduce their compensation until such time as Company achieves certain revenue thresholds. Felipe de la Vega, Chief Executive Officer and a member of the Board of Directors of the Company, has agreed to a reduction in his salary to CAD$7,000 per month while the other members of the management team (Chris Reid and Nicolas Rodriguez) have agreed to reductions to CAD$5,000 per month. Bonuses will be paid to these executives at such time as the Company achieves certain financial thresholds in order to compensate them for agreeing to the reductions. In addition, Robert Metcalfe, Chairman of the Board of Directors, has agreed to a reduction to CAD$5,000 per quarter for his director fees.
This management compensation reduction comes along also with internal restructuration where number of employees has been reduced as well some salaries of second tier management. This will leave MCCN as one of the lowest G&A companies, with a very well-defined strategy that should allow the company to expect to be profitable within the next 12 months.
In addition, the Company has implemented a deferred stock unit plan which provides for the issuance of cash bonuses to members of the Board of Directors and members of the executive management team upon certain revenue and share price thresholds being met. A copy of the DSU plan will be filed under the Company's profile on SEDAR at www.sedar.com. The Board of Directors has also agreed to the issuance of a total of 13,450,000 deferred stock units at an exercise price of $0.06 and which vest upon the occurrence of certain financial and revenue thresholds as determined by the Compensation and Governance Committee of the Board of Directors.
Lastly, certain members of the executive team and members of the Board of Directors have agreed to forfeit their stock options, all of which are out of the money, in order to allow more space in the option pool for future grants of options, including the one noted below.
INDUSTRIAL HEMP FARMS
Further to the press release of the Company dated October 20, 2021, the Company entered into a supply agreement for the provision of dried cannabis flower to Industrial Hemp Farms of Colorado ("IHF") and which provided for certain stock options to be issued to IHF upon the occurrence of certain delivery thresholds. Further to that transaction, the Company has agreed to issue a total of 21 million options to purchase common shares in the capital of the Company at prices ranging from $0.10 to $0.15, such options expiring on various dates between October 31, 2023 and October 31, 2027, upon certain performance metrics being met. Refer to the Company's press release dated October 20, 2021 for more information in respect of same.
BOARD UPDATE
Additionally, the Company announces that it has recently received the resignation from Thor Borresen as a member of the Board of Directors. Mr. Borresen has resigned from the Company for personal reasons. The Board of Directors of the Company thanks Mr. Borresen for his contributions to the Company and wishes him well in his future endeavours.
DEBENTURE INTEREST
Finally, the Company announces that it is issuing a total of 1,736,252 common shares in the capital of the Company ("Common Shares") to the holders of the secured convertible debentures of the Company (the "Debentures") that were issued during fiscal 2020. Pursuant to the terms of the Debentures, interest can be paid either in cash or Common Shares, at the discretion of the Company. In order to conserve cash, the Company has elected to pay the interest owing for the period from January 1, 2022 to June 30, 2022 in Common Shares. The Common Shares are being issued at a price of $0.05 per share, such price being the minimum price permitted for securities issued on the facilities of the Canadian Securities Exchange ("CSE"). The issuance of the Common Shares allows the Company to settle certain debt owing to various creditors and preserve its working capital for growing the business as it works towards achieving self-sufficiency and being self-financing. The Common Shares are subject to a four month and a day hold period under applicable securities laws, such hold expiring on November 5, 2022. Finalization of the issuance of the Common Shares set forth above is subject to the approval of the CSE.
Certain of the issuances described above are considered to be a "related party transactions" pursuant to Multilateral Instrument 61-101 as several of the creditors and recipients of Common Shares are related parties to the Company, but the Company is availing itself of the exemptions from obtaining a formal valuation and obtaining "majority of the minority" approval due to the exemptions available in Sections 5.5(a) and 5.7(1)(a) of said instrument.
About Medcolcanna
Medcolcanna is a Canadian-integrated medical cannabis company, whose fully licensed operations are based in Colombia.
Led by a proven and successful management team, Medcolcanna has a growing number of facilities in optimal growing locations, which positions the Company to become a global leader in the medical cannabis market.
Medcolcanna employs state-of-the-art organic agricultural technology and innovative pharmaceutical processes to produce high-quality products.
The Company's scalable production model and network of pharmaceutical partnerships globally ensures that they remain at the forefront of the medical cannabis industry.
If you would like to receive News Releases via email as soon as they are published, please subscribe here: https://medcolcanna.com/contact-us/ or write to info@medcolcanna.com.
Additional information about Medcolcanna can be found on its web site at medcolcanna.com
Medcolcanna Investor Relations Contact: Chris Reid, CFO Carrera 49b # 93-62 Bogota, Colombia
Phone: +571 642-9113 Email: info@medcolcanna.com
Forward-Looking Statements
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release.
Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals for any proposed transaction, including those discussed herein. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.
Medcolcanna assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
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