RMMI Corp. Announces Completion Of Hemp Biomass Purchase From Clearwater Canngrow And Share Issuance

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CALGARY, AB, July 8, 2020 /CNW/ – RMMI Corp. (“RMMI” or the “Company“) (CSE: RMMI), a licensed producer and processor under the Cannabis Act (Canada), is pleased to announce the closing of the previously announced biomass purchase of 136,077 kg of high CBD hemp (the “Hemp Biomass Purchase“) with Clearwater CannGrow Ltd. (“Clearwater“) and has issued 9,555,556 common shares in the capital of RMMI (“Common Shares“) to Clearwater (the “Share Consideration“) in partial satisfaction of one component of the Hemp Biomass Purchase (the “Acquisition“). The Share Consideration is subject to a voluntary escrow.  An additional 666,666 Common Shares are expected to be issued in the near future at the direction of Clearwater.

RMMI is pleased to welcome Clearwater’s owner Joey Bedard-Burnet as the new Chief Operating Officer of RMMI.

RMMI is also pleased to announce that lenders representing the full $1,000,000 principal amount of RMMI secured notes (the “Notes“) have agreed to a restructuring and repayment plan (the “Restructuring“).  The full principal amount of the Notes plus all accrued interest and fees (which totaled approximately $400,000 at June 30, 2020) has been converted to a $1,500,000 mortgage loan.  The mortgage loan will be repaid monthly starting in October 2020 over a one-year period and accrue interest at 12% per annum.  In consideration for the Restructuring, RMMI has issued to the lenders 1,500,000 Common Share purchase warrants entitling the holders to acquire one Common Share at an exercise price of $0.255 for a period of three years from issuance.  Certain officers and directors of the Company (collectively, the “Insiders“) participated in the Restructuring.

RMMI has also entered into a management services agreement (the “Agreement“) with Optimal Capital Advisors, an entity controlled by Eugene Chen, a director of the Corporation.  Under the terms of the Agreement, which is effective June 1, 2020, the Corporation will issue 45,000 Common Shares per month as compensation for services provided to RMMI.  The Agreement expires on December 31, 2020.

The Agreement with Optimal Capital Advisors and participation by the Insiders in the Restructuring both constitute a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101“). The Company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(1)(b) of MI 61-101 in respect of the Insiders’ participation in the Restructuring and the Agreement with Optimal Capital Advisors.

In addition, RMMI has also issued 1,900,000 Common Shares and 500,000 Common Share purchase warrants with an exercise price of $0.26 expiring three years from issuance to its financial advisor and finders under the Acquisition.

About RMMI Corp.

RMMI is an Alberta based company whose wholly owned subsidiary, Rocky Mountain Marijuana Inc., is licensed under the Cannabis Act (Canada) to cultivate, produce, process and sell cannabis in various forms. RMMI’s vision is to build a low cost, highly efficient, hemp processing and CBD extraction business focused on serving a premier set of customers in Canada and abroad.

Certain  information  set  forth  in  this  news  release  contains  forward-looking  statements  or  information  (“forward-looking statements“). By their nature, forward-looking statements  are  subject  to  numerous  risks  and  uncertainties,  some  of  which  are  beyond  the  Company’s  control, including the impact of general economic conditions, industry conditions, volatility of commodity prices,  currency  fluctuations,  environmental  risks,  operational  risks,  competition  from  other  industry  participants, stock market volatility, and  the  ability  to  access  sufficient  capital  from  internal  and  external  sources.  Although  the  Company  believes  that  the  expectations  in  its  forward-looking  statements  are  reasonable,  its  forward-looking  statements  have  been  based  on  factors  and  assumptions  concerning  future  events  which  may  prove  to  be  inaccurate.  Those  factors  and  assumptions  are  based  upon  currently  available  information.  Such  statements  are  subject  to  known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. Risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our public  disclosure  documents  available  at  www.sedar.com.  Furthermore,  the  forward-looking  statements  contained in this document are made as of the date of this document and, except as required by applicable law, the Company does not undertake any obligation to publicly update or to revise any of the included forward-looking  statements,  whether  as  a  result  of  new  information,  future  events  or  otherwise.  The  forward-looking   statements   contained   in   this   document   are   expressly   qualified   by   this   cautionary   statement.  

Trading in the securities of  RMMI should be considered highly speculative.

SOURCE RMMI

For further information: Peter Cheung, Interim Chief Executive Officer and Chief Financial Officer, [email protected], 403-910-9191