November 7, 2018 – Vancouver, BC – Isodiol International Inc. (CSE: ISOL) (OTCQB: ISOLF) (FSE: LB6B.F) (the “Company” or “Isodiol”) is pleased to announce that it has entered into an engagement agreement with Haywood Securities Inc. (“Haywood”), to act as sole book runner and co-lead agent with Clarus Securities Inc. (together with Haywood, the “Co-Lead Agents”) on a best efforts brokered private placement offering of 8% unsecured convertible debenture units (the “Convertible Debenture Units”) of Isodiol at a price of $1,000 per Convertible Debenture Unit (the “Issue Price”) for aggregate gross proceeds to Isodiol of a minimum of $5,000,000 and a maximum of $10,000,000 (the “Offering”). Isodiol has granted the Co-Lead Agents an option to increase the size of the maximum Offering by up to an additional $5,000,000 of Convertible Debenture Units at the Issue Price.
Each Convertible Debenture Unit will consist of $1,000 principal amount of convertible debentures (“Convertible Debentures”) and 159 warrants to purchase common shares of Isodiol (each, a “CD Warrant”). Each CD Warrant will be exercisable to acquire one common share of Isodiol (each a “Isodiol Share”) at an exercise price of $3.94 per Isodiol Share for a period of 24 months following the closing date of the Offering.
The Convertible Debentures will mature on the date that is 24 months from the closing date of the Offering (the “Maturity Date”) which is expected to be on or about the first week of December 2018. The Convertible Debentures will be convertible at the holder’s option or upon mandatory conversion at the request of Isodiol on the earlier of: (i) the Maturity Date; (ii) the business day immediately preceding the date fixed by the Isodiol for redemption, and (iii) the business day immediately preceding the payment date if subject to repurchase pursuant to a change of control into: (A) that number of common shares in the capital of Isodiol (the “Debenture Shares”) calculated on the basis of the aggregate principal amount of the Convertible Debentures issued divided by the conversion price of $3.15 per Debenture Share (the “Conversion Price“); and (B) a cash payment equal to the additional interest amount that such holder would have received if it had held the Debenture for a period of one year from the date of conversion (the “Make-Whole Amount“). Settlement upon conversion will be in Debenture Shares. Upon conversion of any of the Debentures held by a holder of Debentures, such holder will receive a cash payment equal to the accrued and unpaid interest thereon to the date of conversion.
The Convertible Debentures will not be redeemable on or before December 31, 2019. On and after December 31, 2019, and up to and including the Maturity Date, the Convertible Debentures may be redeemed in whole or in part from time to time at the option of Isodiol (the “Mandatory Redemption Right”) on not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount plus accrued and unpaid interest, provided that the daily weighted average trading price of the Common Shares on the CSE during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of redemption is given is not less than C$5.00.
The Convertible Debenture Units will be offered and sold in Canadian jurisdictions to “accredited investors” pursuant to the exemption from the prospectus requirement at Section 2.3 of National Instrument 45-106 – Prospectus Exemptions and such other exemptions from the prospectus requirement as may be agreed between Isodiol and the Co-Lead Agents.
Isodiol will pay a commission to the Co-lead Agents upon closing of the Offering of: (a) 7.0% of the gross proceeds of the Offering in the form of cash; and (b) broker warrants equal to 7.0% of the number of Isodiol Shares issuable upon conversion of the Convertible Debentures (each, a “Broker Warrant”), in each case, on the closing of the Offering. Each Broker Warrant will carry the right to purchase one Isodiol Share at the Conversion Price and will expire on the date that is 24 months following the closing date.
The Offering is subject to a number of conditions, including receipt of all necessary corporate and regulatory approvals.
About Isodiol International Inc.
Isodiol International Inc. is focused on the nutritional health benefits that are derived from hemp and is a product development, sales, marketing and distribution company of hemp-based consumer products and solutions.
Isodiol has commercialized a 99%+ pure, naturally isolated CBD, including micro-encapsulations, and nano-technology for quality consumable and topical skin care products. Most recently, the Company received approval for its CBD designated as an Active Pharmaceutical Ingredient for use in Finished Pharmaceutical Products, as was announced on April 26, 2018.
Isodiol’s growth strategy includes the development of over-the-counter and pharmaceutical drugs and continued international expansion into Latin America, Asia, and Europe.
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Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable securities laws relating to statements regarding the Company’s business, products and future the Company’s business, its product offerings and plans for sales and marketing. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking information. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance and developments to differ materially from those contemplated by these statements depending on, among other things, the risks that the Company’s products and plan will vary from those stated in this news release and the Company may not be able to carry out its business plans as expected. Except as required by law, the Company expressly disclaims any obligation and does not intend, to update any forward-looking statements or forward-looking information in this news release. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct and makes no reference to profitability based on sales reported. The statements in this news release are made as of the date of this release.
The CSE has not reviewed, approved or disapproved the content of this press release.