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More funding achieved in a tough market

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Sam Dan Member Level  Tuesday, 02/11/20 10:08:07 AM
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More funding achieved in a tough market

" ("COOL" or the "Company") announces that it has signed a non-binding term sheet for a CDN$1,500,000 convertible loan facility (the "CGOC Loan Facility") to be advanced by Cannabis Growth Opportunity Corporation ("CGOC").

Pursuant to the term sheet, CGOC has committed to advance up to CDN$1,500,000 (the "Loan Limit") in three equal tranches of CDN$500,000, with the first tranche to be released upon execution of definitive agreements, with each subsequent tranche to be released upon completion of mutually agreed operational milestones. The CGOC Loan Facility shall mature on December 31, 2022, bears interest at 12% per annum, calculated and accrued monthly in arrears and due on maturity. The CGOC Loan Facility shall also be secured by a general security agreement covering all of the Company's personal property upon CGOC advancing the total principal amount of the Loan Limit. Upon entry into the definitive agreements for the CGOC Loan Facility, the Company will issue 1,500,000 common share purchase warrants (the "Warrants") to CGOC that shall vest in three equal tranches upon each of the three advances being made under the CGOC Loan Facility. The Warrants shall be exercisable until December 31, 2022, at a price of CDN$0.60 per share. The Company will have the right to accelerate the expiration date of the Warrants to 30 days after providing written notice to CGOC if the Company's common shares close at or above CDN$1.50 per share for a period of 10 consecutive trading days on the CSE. The principal amount advanced under the CGOC Loan Facility and any accrued and unpaid interest thereon will be convertible at the option of CGOC into common shares of the Company at anytime prior to maturity at a price of CDN$0.40 per share.

In addition, the Company and CGOC have also agreed to enter into subscription agreements to exchange approximately CDN$2,000,000 worth of each other's common shares (the "Share-Swap") whereby the Company shall receive a total of 3,149,606 common shares of CGOC at a deemed price of CDN$0.635 per share and CGOC shall receive a total of 5,333,333 common shares of the Company at a deemed price of CDN$0.375 per share. Pursuant to the Share-Swap, both CGOC and the Company will also sign a voting and resale agreement providing that each party will be required to vote such common shares acquired under the share-swap as recommended by the other party and will be restricted from trading such common shares for a period of 18 months. Furthermore, CGOC will have the right to nominate one director to the Company's board and, if CGOC's nominee is not on the Company's board, CGOC will have the right to appoint a board observer.

Brad Eckenweiler, Chief Executive Officer of Core One, commented, "We are excited with the prospect of developing a relationship that will benefit both parties in the United States, Canada and Europe. While CGOC has expertise that can expedite our Canadian goals, I also believe our experience will assist CGOC's interests throughout California."

Sean Conacher, Chief Executive Officer of CGOC, commented, "COOL operates out of a state-of-the-art facility in California and we believe this investment will assist in advancing our interests in the California market. CGOC also believes there is significant opportunities with COOL's infused strip technology and we work to advance this technology globally."

The transactions as outlined above are subject to the approval of the board of directors for each party and all necessary regulatory and corporate approvals, including approval of the CSE, if so required.

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