Cannasouth Limited is launching a wholesale offer of secured convertible notes to raise up to $5 million.
They have already secured a subscription agreement for $1 million of notes, committed by three directors.
The notes offer is intended to provide working capital until revenue is generated from the company's products.
Only wholesale and eligible investors can participate in the offer.
The notes have a term of 24 months and can be redeemed for cash or converted into ordinary shares.
They bear an interest rate of 15% per annum.
The obligations of Cannasouth under the notes are secured by a General Security Agreement.
The exercise of conversion rights for notes issued to directors is conditional upon shareholder approval.
If approval is not granted, the interest rate applicable to notes held by directors will increase by 3% per annum.
The company expects exponential growth in sales with the launch of new products.
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