CB2 Insights Inc (CSE:CBII) (OTMKTS:CBIIF), the cannabis research and education group, said Tuesday that it has completed its payment obligations for its acquisition of New Jersey Alternative Medicine last June.
According to the terms of the deal, the Canadian company will issue 2.5 million shares to be escrowed over 15 months, with a rolling release over the term. The purchase payout will amount to roughly $800,000 and CB2 Insights will now see an approximate savings of $440,000.
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As of last year, the operations of New Jersey Alternative Medicine saw unaudited revenues of $1.2 million and positive EBITDA of $670,000.
“The revised terms of New Jersey Alternative Medicine means that we have already seen over a 1X return on our total investment, with a significant reduction in current liabilities and moving forward, any future growth will be solely beneficial and non-dilutive for the company and its shareholders,” said Prad Sekar, CEO of CB2 Insights.
CB2 Insights has also issued as many as 1,218,756 in shares to Merida Capital as part of its interest payment on a debt note. On top of this, the Canadian company has agreed to issue an aggregate of 2,487,127 shares as part of a debt settlement on liabilities of which roughly 1.8 million shares will be issued to insiders and directors in lieu of compensation.
“With the settlement of debt with shares, the company has reduced its near-term liabilities and cash exposure which brings us closer to our continued target to be EBITDA positive by Q2 2020,” Sekar added. “With the successful uptake of the warrant program in December 2019, the company remains committed to refrain from any significant future dilutive share issuances to finance operations and near-term organic growth.”
CB2 Insights operates the largest multi-state cannabis evaluation and education centers in the US, overseeing the care of more than 100,000 patients.