Nutritional High Amends and Restates LOI With Lineage Grow Company

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TORONTO, Feb. 07, 2018 (GLOBE NEWSWIRE) — Nutritional High International Inc. (the “Company” or “Nutritional High“) (CSE:EAT) (OTCQB:SPLIF) (FRANKFURT:2NU) is pleased to announce that it has entered an amended and restated letter of intent with Lineage Grow Company (“Lineage“) dated February 1, 2018 (the “Restated LOI“), amending and restating the letter of intent entered into between Lineage and Nutritional High on February 22, 2017 as further amended on June 30, 2017 (the “LOI“) setting forth the proposed transactions Lineage wishes to undertake in the United States with the assistance of Nutritional High to develop its marijuana related operations.  The proposed transactions were originally announced in a joint press release dated February 28, 2017.  Pursuant to the Restated LOI, the proposed transactions have been revised as follows:

  1. The proposed transactions set out in the Restated LOI will be structured such that Nutritional High will assist Lineage to enter into a strategic partnership with Mt. Baker Greeneries LLC (“Mt. Baker“) in the State of Washington.  Upon the completion of the Pueblo Joint Venture (as defined below), Lineage will issue to Nutritional High 400,000 common shares of Lineage (“Lineage Shares“) at $0.25 per share as partial consideration for introducing Mt. Baker to Lineage.
  2. The proposed transactions will also include Lineage entering into a joint venture (the “Pueblo Joint Venture“) with Nutritional High and Palo Verde, LLC (“Palo Verde“) by entering into a series of agreements with Nutritional High and Palo Verde in connection with the expansion of Nutritional High’s marijuana facility located in Pueblo, Colorado, which is currently leased to Palo Verde, and the provision of loan facility and services by Lineage to Palo Verde.  Upon the completion of the Pueblo Joint Venture, Lineage will issue to Nutritional High 100,000 Lineage Shares at $0.25 per share as partial consideration for providing consulting services to Lineage in preparation for entering into the Pueblo Joint Venture.  The target completion date for the proposed Pueblo Joint Venture have been postponed to December 31, 2018.
  3. Nutritional High will enter into a put option agreement (the “Put Option Agreement“) to purchase up to $2.5 million of principal amount of Convertible Debentures of Lineage (“Convertible Debentures“) issued in May 2017.  See “Put Option Agreement” below for more details.
  4. All sections of the LOI relating to the acquisition by Lineage of a Provisional Marijuana Cultivation License issued by the Nevada Division of Public and Behavioral Health and the acquisition of real property in Henderson, Nevada have been removed.

Put Option Agreement

Pursuant to the Restated LOI, Nutritional High will enter into the Put Option Agreement with KW Capital Partners Ltd. (“KW“), as agent for the holders of the Convertible Debentures, and Lineage, pursuant to which, in certain circumstances (set out below), Nutritional High would be obligated, at the election of KW, to purchase the Convertible Debentures at a price equal to the amount of all principal and accrued interest outstanding thereon.  Nutritional High has agreed to enter into the Put Option Agreement in consideration for:

  1. The issuance to Nutritional High of 1,250,000 Lineage Shares at $0.25 per share;
  2. $75,000 cash paid to Nutritional High in the form of 5% royalty on all revenue of Lineage paid on an installment basis with the balance of any amount owing and not yet paid by October 16, 2019, to be paid in a lump sum; and
  3. If Lineage acquires any dispensary in a state in which Nutritional High’s products are sold, Lineage shall purchase Nutritional High’s products to stock at least 20% of the dispensary’s shelf space per product category at a price equal to Nutritional High’s best regular wholesale price to Nutritional High’s customers in the state, subject to availability of supply.

Pursuant to the Put Option Agreement, the following circumstance would trigger the put option:

  1. Failure of Lineage to list the Lineage Shares on a stock exchange by February 28, 2018;
  2. The Lineage Shares trading at a price per share equal to less than 50% of the conversion price of the Convertible Debentures for 60 consecutive trading days after being listed on a stock exchange; or
  3. Failure by Lineage to either acquire an operating marijuana business or assisting Mt. Baker in commencing marijuana cultivation operations by June 30, 2018.

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