Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) (“Cansortium” or the “Company“), a vertically integrated cannabis company with operations in Florida, Texas, Michigan and Pennsylvania, announces that it has agreed with an independent director to issue 143,678 common shares (“Debt Shares“) to such director in exchange for the cancellation of U.S.$125,000 of director fees owing. The Debt Shares are being issued at a deemed price of U.S.$0.87, in accordance with the policies of the Canadian Securities Exchange.
The issuance of the Debt Shares to the director constitutes a “related party transaction” as this term is defined in Multilateral Instrument 61-101: Protection of Minority Securityholders in Special Transactions (“MI 61-101“). All of the independent directors of the Company, acting in good faith, determined that the fair market value of the Debt Shares being issued pursuant to the shares for debt transaction and the consideration being paid is reasonable. The Company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 as neither the fair market value of the Debt Shares nor the debt exceeds 25% of the Company’s market capitalization.
The Company did not file a material change report more than 21 days before the expected closing of the shares for debt transaction as the details and amounts of debts settled under the transaction were not finalized until closer to the closing and the Company wished to close the transaction as soon as practicable, which the Company deems reasonable as it wishes to reduce its accrued liabilities as soon as possible. Any Debt Shares issued to Canadian residents pursuant to the debt conversion will be subject to a four (4) month hold period.