News

Pasha Announces Share Consolidation, Financing and Restructuring of Debt

VANCOUVER, BC (February 25, 2020) Pasha Brands Ltd. (the “Company”) (CSE: CRFT) (OTC:CRFTF) (FSE:ZDD) announces that it plans to consolidate (the “Consolidation”) its common share capital on the basis of one post-Consolidation share for every twelve pre-Consolidation shares. It is anticipated that the Consolidation will reduce the outstanding capital of the Company such that there will be approximately 16,216,612 common shares outstanding.  The Company believes that the Consolidation will make the Company more attractive to financing opportunities, and will allow for the restructuring and settlement of certain existing liabilities.

Financing

Following completion of the Consolidation, the Company intends to offer up to 6,944,444 post-Consolidation units (each, an “Offering Unit”) by way of non-brokered private placement (the “Offering”) at a price of $0.72 per Offering Unit for gross proceeds of up to $5,000,000.  Each Offering Unit will consist of one post-Consolidation common share and one-half of one share purchase warrant which will entitle the holder to acquire one additional post-Consolidation common share at an exercise price of $1.02 for a period of 36 months following closing (the “Closing Date”).

The Company anticipates paying finders fees to certain eligible parties who have assisted by introducing subscribers to the Offering.  All securities issued in connection with the Offering will be subject to a four-month-and-one-day statutory hold period in accordance with applicable securities laws.

Debt Settlement

The Company has reached an agreement with certain arms-length creditors to settle (the “Debt Settlement”) all outstanding obligations related to the acquisition of certain intellectual property associated with the trade name CBD Therapeutics.  The obligations total $2,750,000 and are being settled through the transfer of ownership of 1160988 B.C. Ltd., a wholly-owned subsidiary of the Company which holds the assets related to CBD Therapeutics. In connection with the settlement, the Company has also agreed to release a total of 17,510,072 pre-Consolidation common shares issued in connection with the original acquisition of 1160988 B.C. Ltd. from the terms of a voluntary pooling arrangement, such that they will now become free-trading.

Restructuring of Convertible Debentures

The Company also announces that it intends to seek approval from the holders of outstanding convertible debentures (the “Debentures”) in the aggregate principal amount of $12,261,456 to convert the Debentures into equity of the Company. The Company will seek approval of the holders to issue an aggregate of 12,021,035 units (each, a “Conversion Unit”) at a price of $1.02 per Conversion Unit in full and final settlement of all outstanding obligations due and owing in connection with the Debentures. Each Conversion Unit will consist of one post-Consolidation common share and one share purchase warrant which will entitle the holder to acquire one additional post-Consolidation common share of the Company at an exercise price of $1.20 for a period of 36 months following the Closing Date.

Completion of the Consolidation, the Offering, the Debt Settlement and the restructuring of the Debentures, remains subject to completion of appropriate regulatory filings with the Canadian Securities Exchange.

For further information please contact Patrick Brauckmann at (236) 521-5135 (x426)

Investor Relations Contact
Charles Lee
invest@pashabrands.com  
(236) 521-5132 (x423)

This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. 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.  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 forward-looking statements.  Pasha 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 by law.

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