Cannasouth Limited Issues NZ$1.22 Million in Secured Convertible Notes

Highlights:

• Cannasouth Limited Issues Notes: Cannasouth Limited launched a wholesale offer of secured convertible notes, successfully raising NZ$1.22 million out of a targeted NZ$2.4 million.
• Key Note Terms: The convertible notes have a 24-month term, a 10% annual interest rate, and offer the option to redeem for cash or convert to shares at 3 cents per share, subject to shareholder approval by January 31, 2026.
• Secured Obligations: The notes are secured by a General Security Agreement covering Cannasouth’s present and future assets, as well as those of its subsidiaries, Cannasouth Cultivation Limited and Eqalis Pharmaceuticals Limited.

Wholesale Offer Launched to Raise Up to NZ$2.4 Million

Cannasouth Limited (NZX: CBD) has initiated a wholesale offer of secured convertible notes, aiming to raise up to NZ$2.4 million. On July 31, 2024, the company successfully issued NZ$1.22 million worth of notes under this structure. The offer is available only to wholesale investors, eligible investors, and close business associates, as per the Financial Markets Conduct Act 2013.

Key Terms of the Convertible Notes

The convertible notes come with a 24-month term, during which noteholders can choose between redeeming the notes for cash upon expiry or converting them into ordinary CBD shares at an issue price of 3 cents per share at any time before the term ends. However, the conversion rights are contingent upon shareholder approval, which must be obtained by January 31, 2026.

The notes bear an annual interest rate of 10%. Cannasouth’s obligations under these notes are secured through a General Security Agreement over its present and future assets, including those of its subsidiaries, Cannasouth Cultivation Limited and Eqalis Pharmaceuticals Limited.

Interest and Security

The convertible notes offer a 10% annual interest rate. They are secured by a General Security Agreement over Cannasouth’s current and future assets, as well as those of its subsidiaries, Cannasouth Cultivation Limited and Eqalis Pharmaceuticals Limited.

Future Conversion Contingent on Shareholder Approval

For noteholders to convert their notes into shares, the conversion rights must be approved by Cannasouth’s shareholders by January 31, 2026.

About Cannasouth Limited

Cannasouth Limited is a vertically integrated biopharmaceutical group focusing on the medicinal benefits of cannabinoid compounds derived from cannabis. The company aims to improve patient health outcomes and quality of life by producing high-quality therapeutic products using environmentally friendly methods. Cannasouth Limited is the parent company, listed on the NZX, and fully owns Cannasouth Bioscience Ltd, Cannasouth Cultivation Ltd, and Eqalis Group New Zealand Ltd.

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