- Soda maker to begin making cannabis and CBD-infused products…
- New products will include cannabis-containing beverages and edibles…
- More on the unsecured loan that’s part of the deal…
A popular soda brand is expanding into the world of cannabis.
Jones Soda Co (OTCMKTS: JSDA) announced today it has issued a $2 million Convertible Debenture to develop cannabis and CBD-infused products.
JSDA stock moved higher on the news, rising more than 50%.
Jones said it “intends to operate its planned cannabis operations through one or more subsidiaries that are separate from its craft beverage business.”
Mark Murray, President and CEO of Jones, said, “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.”
What The Heck is a Convertible Debenture?
Investopedia defines a Convertible Debenture as “a type of long-term debt issued by a company that can be converted into shares of equity stock after a specified period.”
Those debts are typically unsecured bonds or unsecured loans that are not backed up by any underlying collateral.
Convertible Debentures are exchangeable for stock at specified times in the agreement.
Jones says the agreement in this deal “is convertible into units of Jones” which consisting of one share of JSDA common stock and one Jones Special Warrant.
The Special Warrant “will be exercisable into one Jones Share at a price of US$0.625 per share for a period of 24 months from the date of issuance.”
The company said, “the entire principal amount on the Convertible Debenture and all accrued interest thereon shall automatically convert into Jones Units at a conversion price of US$0.50 per Jones Unit.”
The terms of the agreement require Jones to use the funding exclusively to cover costs of the transaction and to create cannabis and CBD-infused beverages.
So now that we know what a Convertible Debenture is and what this particular agreement requires, let’s dive in deeper.
Details of the Deal
Image credit: SmartPhotoLab/Shutterstock.com
Jones says it issued the $2 million Convertible Debenture to SOL Global Investments Corp (OTCMKTS: SOLCF).
The company entered a non-binding agreement with SOL and the Canadian Reporting Issuer Pinestar Gold Inc.
Murray said, “We are 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 terms of the deal say “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.”
The terms also say “Pinestar intends to complete an offering of subscription receipts that is expected to be subscribed for by SOL and certain significant shareholders of Pinestar… or their respective contacts and partners, for minimum aggregate gross proceeds of $8 million, at a price per Subscription Receipt equal to $0.50.”
Those subscription receipts will then transition automatically into Pinestar Units that consist of “one common share of Pinestar Share and one new share purchase warrant of Pinestar.”
Those units will then be immediately exchanged for a Jones Unit.
Getting to Know Jones Soda
- Jones Soda Co was founded in 1986.
- Jones is a craft soda brand known for its unconventional flavors and user-designed label artwork.
- The company is headquartered in Seattle.
- Jones markets and distributes premium craft beverages under the Jones Soda and Lemoncocco brands.
- The product lines include cane sugar soda, zero-calorie soda, and Lemoncocco non-carbonated premium refreshment.
- Jones says its sodas are made with cane sugar and other high-quality ingredients
- Jones Soda products are sold across North America in glass bottles, cans, and on fountain.
Featured cover image credit: AlexLMX/Shutterstock.com