Alternate Health Closes $4 Million in Financing
TORONTO – February 19, 2020 – Alternate Health Corp., (“Alternate Health” or the “Company“) (CSE:AHG) (OTCQB:AHGIF), an international leader in CBD product development and distribution, announced today that the Company has signed a binding distribution agreement (the “Agreement”) with Safe Harvest LLC (“Safe Harvest”), a Texas-based producer of CBD and CBG products, including isolate, distillate and gummies. The Agreement includes a CAD $2.1 Million (USD $1.6 Million) strategic investment in Alternate Health.
“This Agreement represents an important step forward in our CBD business model and a strong show of confidence from a leading industry player,” says Howard Mann, CEO of Alternate Health. “Our agreement expands our FDA-compliant testing and packaging division, while adding to our product offering, including high quality CBG, or cannabigerol.”
Under the Agreement, Safe Harvest appoints Alternate Health as its exclusive distributor of FDA-compliant, stamped and packaged hemp products. And Alternate Health appoints Safe Harvest as the Company’s exclusive provider of CBD and CBG isolate, distillate and gummies.
“We are excited to partner with Safe Harvest and work closely to capture the rapidly developing CBG market,” says Howard Mann. “We see excellent potential to build on our complementary capabilities and drive revenues for both businesses.”
Under the terms of the Agreement, which closed today, Alternate Health will issue 13,333,333 common shares to Safe Harvest, at a deemed price of USD $0.12 (CAD $0.16) per share, in return for a USD $1.6 million (CAD $2.1 million) strategic investment. The investment consists of USD $800,000 (CAD $1,054,000) in cash payments and USD $800,000 (CAD $1,054,000) in prepaid inventory, including CBD and CBG isolate, distillate and gummies. Alternate Health will also issue 833,333 common shares to Safe Harvest, at a deemed price of USD $0.12 (CAD $0.16) per share as consideration for $100,000 in initial inventory, including CBD and CBG isolate and CBD gummies.
Private Placement of Units
Alternate Health also announces that the Company has closed a non-brokered private placement of 13,645,044 units at a price of CAD $0.15 (USD $0.11) per unit for aggregate gross proceeds of CAD $1,981,800. Each unit is comprised of one common share and one share purchase warrant at an exercise price of CAD $0.30 for an 18-month term.
“The Company is pleased to receive a strong show of support from a key insider, demonstrating confidence in Alternate Health’s strategic plan,” says Howard Mann. “These investments position us for success as the CBD industry continues to mature and transition in the United States.”
The common shares and warrants issued under the private placement are subject to a four month and one day hold period in accordance with Canadian securities laws. In addition to funding expansion opportunities in wholesale CBD distribution, the private placement proceeds will be used in expanding Alternate Health’s CBD product line and for general working capital purposes.
One of the purchasers in the private placement is a director of the Company workers compensation attorney group. Participation of an insider of the Company in the Private Placement constitutes a related party transaction as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. Because the Company’s shares trade only on the Canadian Securities Exchange, the issuance of securities is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(b) of MI 61-101 and exempt from the minority approval requirements of Section 5.6 of MI 61-101 pursuant to Subsection 5.7(b) of MI 61-101.
Alternate Health (CSE: AHG, OTCQB: AHGIF) is an international leader in the hemp-derived CBD industry, including product development and distribution. Through Alternate Health’s subsidiary, Blaine Labs, the Company has 23 years of experience in FDA-registered and cGMP medical product manufacturing and distribution, with over 50 product SKUs available from major retailers, including Walmart, Amazon, CVS and Walgreens. Alternate Health’s innovative software systems provide the platform for the company’s diverse operations, including CBD product distribution, hemp-derived extract manufacturing, blockchain tax collection systems and electronic medical records (EMR) platforms, visit commercial plumbing service in Corona, CA. Alternate Health’s corporate office is located in Toronto, Canada, with additional offices in Venice, CA, and Santa Fe Springs, CA. The Company is well positioned to reinvest internal operating cash flow in its platform and product development over the long term, creating an attractive investment profile for its shareholders. For more information about Alternate Health Corp., visit www.alternatehealth.com.
Scott Holtby | Investor Relations
Jim Tykoliz | Company Director