The Tinley Beverage Company Inc. TNYBF TNY has issued a secured convertible grid note of up to $3.5 million at 12% from the company to Blaze Life Holdings, LLCan arm’s length party to the company, and finalized the terms of its $612,250 advance from Richard GillisPresident and COO of Tinley’s USA and a member of the office of the CEO of Tinley, which is now evidenced by a secured convertible promissory note of $612,250 at 12% of the company.

Blaze Life Holdings was founded in 2017 by two cannabis visionaries: a real estate investor from Los Angeles Scott Kim and Paul Burgisformer COO and CFO of Los Angeles Golden Road Brewerywhich was acquired by Anheuser-Busch InBev BUD in 2015. They saw the opportunity for a sophisticated, vertically-integrated cannabis business that operationally parallels the craft brewery and brewery scene, suited to drive efficiency and growth in an industry of rapidly growing cannabis drinks.

The Company and BLH have also agreed to enter into a management services agreement pursuant to which BLH will provide certain management services to Tinley’s, Algonquin and other US subsidiaries of Tinley. These services should include operations management and technical support, as well as collaboration on recruiting, supply chain synergies, best practices, and business systems.

Annual and special meeting of shareholders

In connection with the issuance of the BLH Note, the company has agreed to recommend two nominees for the position of director of BLH for election to the board of directors of the company at the next annual and special meeting of shareholders of the company. BLH nominees are expected to include Paul Burgis, co-founder of BLH, and Anthony (“Tony”) Yanow.

The date of the meeting is expected to be the first week of August 2022 or thereabouts.

The BLH rating

The BLH note is a grid note which will bear interest at the rate of 12% per annum and has a term of five years from the date of issue. All indebtedness under the BLH Note, including all principal amounts advanced under the Note from time to time and accrued and unpaid interest, will be convertible into Partnership Units at BLH’s option at a price of C$0.105 per share. Each unit consists of one common share in the capital of the company and one-half common share purchase warrant, each warrant being exercisable for a period of two years from the date of issue of said warrant at an exercise price equal to the conversion price.

The initial advance under the BLH Note is $1 million, with an additional $500,000 to be advanced on the last business day of each calendar month following issuance of the BLH Note, with the first such advance due. on June 30, 2022, subject to any changes that BLH and the Company mutually agree to in writing. Obligations under the BLH rating are secured by the assets of the Company and the Company’s U.S. subsidiary, Algonquin Springs Beverage Management SARL (“Algonquin”).

The BLH Note provides for the automatic conversion of: 33.33% of the indebtedness under the BLH Note if the closing price of the common shares on the facilities of the Canadian Securities Exchange exceeds $0.50 for five consecutive trading days; an additional 66.66% of indebtedness under the BLH Note if the closing price of the common stock on the CSE facilities exceeds $0.75 for five consecutive trading days; and the remaining indebtedness under the BLH Note if the closing price of common stock on the CSE facilities exceeds $1.00 for five consecutive trading days.

Following the closing of the BLH rating, Yanow is entitled to receive a capital markets advisory fee of $100,000 from the company. This commission is payable by the company in accordance with the terms of a consulting services agreement entered into between Yanow and the company.

The Gillis Note

The Gillis note will bear interest at the rate of 12% per annum and has a term of one year from the date of issue. All indebtedness under the Gillis Note, including all principal amounts advanced under the Note from time to time and accrued and unpaid interest, will be convertible into Units at the option of Gillis at the Conversion Price. Each unit consists of one common share in the capital of the Company and one-half warrant, each whole warrant being exercisable for a period of two years from the date of issue of such warrant. subscription at an exercise price equal to the conversion price. .

In the event of a Liquidity Event, all of the then remaining Indebtedness will be automatically converted into Units at a 25% discount to the deemed price per Common Share paid in connection with the Liquidity Event, or, if such discount is not authorized by the CSE, then the maximum applicable discount authorized by the CSE.

The obligations under the Gillis note are secured by the assets of the company and its US subsidiaries, this security being second in priority to the security of BLH mentioned above.

Photo by Giorgio Trovato on Unsplash

Related News

Calexo launches Watercolors, a new line of cannabis-infused sparkling waters with 5mg of THC per can

BevCanna’s third-quarter revenue grows more than 1,000% year-on-year ahead of $21 million boarding acquisition