SEATTLE -- Jones Soda Co., the original craft soda known for its unconventional flavors and user-designed label artwork, today announced that it has issued to SOL Global Investments Corp. a $2 million unsecured convertible debenture and has entered into a non-binding term sheet with Pinestar Gold Inc., a Canadian reporting issuer, and SOL.
Jones intends to use the proceeds of the convertible debenture and transactions outlined in the term sheet exclusively for transaction costs and the expansion of Jones’ business to the production and sale of cannabis-containing beverages, edibles and related products.
Jones intends to operate its planned cannabis operations through one or more subsidiaries that are separate from its craft beverage business.
“We believe that cannabis-infused beverages and edibles are a perfect fit for the iconic personality of the Jones brand, and that the proposed transactions will lay the groundwork for a strategic transformation of the company to an additional business line that we feel builds on our current business model” said Mark Murray, president and CEO of Jones. ”We are also confident that SOL, along with certain large shareholders of Pinestar will provide Jones with the knowledge, expertise and resources necessary to help us deliver on our growth plans within the cannabis sector.”
The proposed transactions outlined in the term sheet are subject to, amongst other conditions, due diligence by the parties, the negotiation and execution of a definitive agreement, approval of any applicable regulators, including any applicable securities exchanges, and approval by both the shareholders of Pinestar and the Supreme Court of British Columbia.
Under the term sheet, Jones intends to acquire all of the outstanding common shares of Pinestar (after a planned consolidation of such shares) and warrants exercisable into common shares of Pinestar in exchange for an aggregate of 4,000,000 shares of Jones common stock and 1,674,808 warrants exercisable into Jones Shares as part of a statutory plan of arrangement under the Business Corporations Act (British Columbia) and in reliance on applicable exemptions from the prospectus and registration requirements under Canadian and U.S. securities laws.
The term sheet also provides that Pinestar intends to complete an offering of subscription receipts that is expected to be subscribed for by SOL and certain significant shareholders of Pinestar, one of whom is Marc Lustig, a well-known and respected Canadian entrepreneur, capital markets executive and investor, or their respective contacts and partners, for minimum aggregate gross proceeds of $8 million at a price per subscription receipt equal to $0.50.