C21 Investments Inc 6-K, filed Jul 14, 2020
C21 Investments Inc. (CWLXF)
About this 6-K
C21 Investments Inc filed this 6-K on July 14, 2020.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE13a-16 or 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2020.
Commission File Number 000-55982
C21 INVESTMENTS INC.(Translation of registrant’s name into English)
Suite 820, 1075 West Georgia Street Vancouver, British ColumbiaV6E 3N9 Canada (Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F
Form 20-F**[ ]** Form 40-F [ x]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):[ ]
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):[ ]
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| C21 INVESTMENTS INC. | |
|---|---|
| Date: July 14, 2020 | /s/<br> Michael Kidd |
| Michael Kidd | |
| Chief Financial Officer |
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INDEX TO EXHIBITS
| Exhibit | Description |
|---|---|
| 99.1 | News Release dated June 29, 2020 |
| 99.2 | Material Change Report dated July 9, 2020 |
| 99.3 | Material Change Report dated July 9, 2020 |
C21 Investments Inc.: Exhibit 99.1 - Filed by newsfilecorp.com
C21 Announces 3-Year Term Extension for CEO, and Debt
Repayment Deferral
Record June Run Rate; Temporary Regulatory Filing Relief for Q1
VANCOUVER, June 29, 2020 - C21 Investments Inc. (the "Company") (CSE: CXXI and OTCQB: CXXIF) today announced the following (currency in US Dollars):
- CEO, Sonny Newman, extends for a 3-year term
- Debt Deferral Arrangement and Fernley Lease Extension
- Record Revenue Run Rate in June at Nevada Dispensaries
CEO 3-Year Term Extension, Debt Deferral, and Fernley Lease Extension:
The Company is pleased to announce that its President and CEO, Sonny Newman, has agreed to extend his term for an additional 3 years. Under Mr. Newman's leadership, C21 has successfully integrated and streamlined its operating assets resulting in positive cashflow from operations for the Company.
Mr. Newman stated "I am pleased to commit the next three years to pursuing a prudent growth strategy for C21. With the continued assistance of the Company's strategic advisors, CB1 Capital Advisors and Eight Capital, we are optimistic C21 will soon secure a favorable, non-dilutive debt financing arrangement. This financing would allow the Company to meet its current debt obligations, provide growth capital to fund acquisitions in Nevada, and be serviceable with existing cash flows."
Maturity of the outstanding principal balance of the note totalling $18,200,000 held by Mr. Newman and due July 1, 2020 has been deferred until January 1, 2021. Monthly payments will continue pursuant to the existing terms of the note. In addition, the term of the lease for the Silver State Relief premises in Fernley, Nevada has been extended until July 31, 2023 on the existing terms and conditions, including the Company's option to purchase the leased premises.
The Company's Nevada dispensaries are experiencing a record run rate for June, which is on track to beat the record month of August 2019. The run rate for June is currently trending 26% higher than that of Q1. The Silver State Relief dispensaries also saw an increase in Nevada market share to 6% of the State, as well as 36% of Washoe County for the most recent monthly State data^1^ for Q1 of this year.
^1^ State of Nevada sales data for March, 2020: https://tax.nv.gov/uploadedFiles/taxnvgov/Content/TaxLibrary/NV-Marijuana-Revenue-FY20(6).pdf
Temporary Regulatory Filing Relief:
As a result of logistical delays caused by the COVID-19 pandemic, the Company is relying on the British Columbia Securities Commission's blanket order, BC Instrument 51-517 Temporary Exemption from Certain Corporate Finance Requirements (the "Exemption"), and comparable exemptions in other Canadian provincial jurisdictions to postpone the filing of its first-quarter unaudited financial statements, and management's discussion and analysis (the "Q1 Filings"). The Company is otherwise required to release its Q1 Filings on or prior to June 29, 2020 pursuant to National Instrument 51-102 Continuous Disclosure Obligations, which is now estimated to be filed on or before August 13, 2020, no later than 45 days after the original due date, in reliance of the Exemption.
The Company has imposed an insider trading blackout pending the release of its Q1 Filings. Members of management, directors and other insiders will comply with the Company's insider trading policy and the guidelines described in section 9 of National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions, until the Q1 Filings have been released.
The Company is also relying on the U.S. Securities and Exchange Commission order (Release No. 34-88465) dated March 25, 2020 (the "SEC Order"), providing conditional relief to public companies that are unable to timely comply with their filing obligations as a result of the COVID-19 pandemic. Therefore, the Company is relying on the SEC Order to extend the June 29, 2020 due date for the filing of the first-quarter report on Form 10-Q (the "Q1 Report") estimated to be filed on or before August 13, 2020 (no later than forty-five (45) days after the original due date).
The CSE has not accepted responsibility for the adequacy or accuracy of this release.
Media contact:
Skyler Pinnick
Chief Marketing Officer and Director
Sky.Pinnick@cxxi.ca
+1 833 BUY-CXXI (289-2994)
Investor contact:
Michael Kidd
Chief Financial Officer and Director
Michael.Kidd@cxxi.ca
+1 833 BUY-CXXI (289-2994)
About C21 Investments Inc.
C21 Investments is a vertically integrated cannabis company that cultivates, processes, and distributes quality cannabis and hemp-derived consumer products in the United States. The Company is focused on value creation through the disciplined acquisition and integration of core retail, manufacturing, and distribution assets in strategic markets, leveraging industry-leading retail revenues with high-growth potential multi-market branded consumer packaged goods. The Company owns Silver State Relief and Silver State Cultivation in Nevada, and Phantom Farms, Swell Companies, Eco Firma Farms, and Pure Green in Oregon. These brands produce and distribute a broad range of THC and CBD products from cannabis flowers, pre-rolls, cannabis oil, vaporizer cartridges and edibles. Based in Vancouver, Canada, additional information on C21 Investments can be found at www.sedar.com and www.cxxi.ca**.**
Cautionary Statement:
Certain statements contained in this news release may constitute forward-looking statements within the meaning of applicable securities legislation. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward-looking statements in this news release include statements about the Company's potential debt financing, the ability of the Company to service its current secured debt obligations, the Company's progress in resolving its short-term debt obligations, the performance and opportunities for growth in Nevada, the performance of the Company's brands and the continued demand for cannabis products, and the nature and extent of the impact of the COVID-19 pandemic.
The forward-looking statements contained in this news release are based on certain key expectations and assumptions made by the Company, including the ability of the Company to restructure and service its secured debt, the availability of future debt financing on terms acceptable to the Company or at all, and the ability of the Company's operations to continue in the ordinary course in the COVID 19 environment. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the consequences of not restructuring its secured debt, the ability to continue to service its debt, the inability of the Company to obtain debt financing on terms acceptable to the Company or at all, risks and uncertainties arising from the impact of the COVID-19 pandemic on the Company's operations, the Company's continued performance in Nevada, and other factors, many of which are beyond the control of the Company.
The forward-looking statements contained in this news release represent the Company's expectations as of the date hereof, and are subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
C21 Investments Inc.: Exhibit 99.2 - Filed by newsfilecorp.com
Form 51-102F3 Material Change Report
Item 1. Name and Address of Company
C21 Investments Inc. (the "Company") Suite 303, 595 Howe Street Vancouver, British Columbia Canada V6C 2T5
Item 2. Date of Material Change
July 8, 2019.
Item 3. News Release
News Release dated July 8, 2019 was disseminated through CNW Group.
Item 4. Summary of Material Change
The Company announced Sonny Newman is succeeding Robert Cheney as President and Chief Executive Officer of C21 Investments effective immediately.
Item 5.1 Full Description of Material Change
The Company announced Sonny Newman is succeeding Robert Cheney as President and Chief Executive Officer of C21 Investments effective immediately.
Sonny Newman is the Founder of Silver State Relief and Silver State Cultivation in Nevada, and has several other companies in electronics, manufacturing, electronics distribution, real estate development and an investment company. Mr. Newman was the sole owner of the Silver State companies when they were purchased by C21 Investments earlier this year and is today the largest shareholder of C21 Investments holding approximately 15.3% of the outstanding shares. Mr. Newman's proven operational and financial discipline in the cannabis and other sectors shows his ability to build solid teams and make strategic investments into opportunistic markets.
"We would like to thank Robert for his tireless efforts and visionary leadership when building this leading cannabis firm," said Sonny Newman. "We are grateful that Robert will remain on our Board of Directors and continue to provide his invaluable counsel."
In his role as President and CEO of C21 Investments, Mr. Newman has agreed that he will not be a member of the Board of Directors in recognition of his shareholder status and financial arrangements with C21 Investments.
"Sonny knows how to operate a highly successful cannabis business and we share the same vision for C21 Investments," said Robert Cheney. "Shareholders can be assured that Sonny will continue to integrate our existing businesses and aggressively grow the operations to increase shareholder value."
See news release dated July 8, 2019, issued concurrently with this news release, concerning the restructuring of the Silver State debt
A full copy of the news release is attached hereto as Schedule "A".
Item 5.2 Disclosure for Restructuring Transactions
Not applicable.
Item 6. Reliance on subsection 7.1(2) of National Instrument 51-102
Not applicable.
Item 7. Omitted Information
Not applicable.
Item 8. Executive Officer
Michael Kidd, Chief Financial Officer Telephone: (604) 718-2800
Item 9. Date of Report
July 9, 2019
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C21 Investments Inc.: Exhibit 99.3 - Filed by newsfilecorp.com
Form 51-102F3 Material Change Report
Item 1. Name and Address of Company
C21 Investments Inc. (the "Company") Suite 303, 595 Howe Street Vancouver, British Columbia Canada V6C 2T5
Item 2. Date of Material Change
July 8, 2019.
Item 3. News Release
News Release dated July 8, 2019 was disseminated through CNW Group.
Item 4. Summary of Material Change
The Company announced it has reached agreement to restructure payments under a US$30 million promissory note, with interest at 10%, issued on January 15, 2019 ("Note") to Mr. Sonny Newman in connection with the Company's purchase of Silver State Relief LLC and Silver State Cultivation LLC.
Item 5.1 Full Description of Material Change
The Company announced it has reached agreement to restructure payments under a US$30 million promissory note, with interest at 10%, issued on January 15, 2019 ("Note") to Mr. Sonny Newman in connection with the Company's purchase of Silver State Relief LLC and Silver State Cultivation LLC.
The Note, issued to Mr. Newman as part of the Silver State purchase terms, is secured against the Silver State companies and their assets and had an outstanding principal balance of US$27 million on June 30, 2019. Mr. Newman has agreed in lieu of the principal instalment of US$6.0 million due July 1 to accept such amount in an instalment of US$2 million plus interest, which has been paid, and further monthly instalments of $800,000 per month plus interest commencing on August 1, 2019 and continuing for the next ensuing four months when the monthly instalments increase to US$2 million.
As a term of such restructuring, C21 Investments and the vendors of Swell Companies ("Swell") and Phantom Farms/SDP Development Group LLC ("Phantom") have reached an agreement in principle to accelerate the staggered payments under their purchase agreements. Under the terms of such agreement in principle, the vendors of Swell and Phantom would be issued a total of 16,215,416 shares of C21 Investments at C$1.05 per share in settlement of the US$13.01 million payable to them as payment for the real property owned by Phantom and all other long term obligations owing to such vendors.
"These arrangements, upon completion, will result in C21 having a single secured creditor whose interests are aligned with the Company's and a strong Balance Sheet going forward" said Michael Kidd, Chief Financial Officer of C21 Investments. "This will provide the Company with the financial flexibility needed to capitalize on growth opportunities, and to continue with our focus on enhancing long-term value for all of our stakeholders - shareholders, employees and communities."
"This restructuring will allow the Company to move forward with its plans and as the Company's largest shareholder, I am pleased to participate in this endeavour going forward," said Sonny Newman.
A full copy of the news release is attached hereto as Schedule "A".
Item 5.2 Disclosure for Restructuring Transactions
Not applicable.
Item 6. Reliance on subsection 7.1(2) of National Instrument 51-102
Not applicable.
Item 7. Omitted Information
Not applicable.
Item 8. Executive Officer
Michael Kidd, Chief Financial Officer Telephone: (604) 718-2800
Item 9. Date of Report
July 9, 2019
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