Through Planned Private Placement Offering, Company Plans to Eliminate All Debt and Have Working Capital Available for Execution of Business Plan
IRVINE, CA / CRWEPRESSRELEASE / August 21, 2015 / Cabinet Grow, Inc. (OTCMKTS: CBNT), a developer and marketer of cabinet-based horticultural systems, today announced the status of the Company’s debt and plans to eliminate all convertible debt in the next 90 days.
On August 20, 2015, the Company and Chicago Venture Partners, L.P. (“CVP“) agreed to execute a term sheet (the “Term Sheet”) of the principal terms under which CVP, will forbear for ninety (90) days from exercising certain remedies, with respect to any defaults (the “Defaults“) that may have occurred under a Secured Convertible Promissory Note issued on June 6, 2014 (the “Note“). CVP has funded the Company $928,000 to date under the Note.
The Term Sheet sets forth only a preliminary, non-binding statement of intent and understanding of the parties, which shall not be binding on any party unless and until the signing of the definitive agreements (“Definitive Agreements“).
CVP will agree to the following: 1) that the monthly installments of $92,083 due under the Note will not be due and payable for a period of ninety (90) days from the date the Definitive Agreements are fully executed (the “Execution Date”) and 2) CVP will not exercise any lender conversions for a period of ninety (90) days from the Execution Date, without the Company’s prior written consent.
The Company has the right to repurchase the Note and the attached warrant at any time within ninety (90) days of the Execution Date for a purchase price of $971,000.
CVP will refrain and forbear from exercising and enforcing any remedies it may have under the Note, with respect to any Defaults, so long as no Defaults occur under the Note after the Execution Date and the Company does not breach any of its obligations under any Definitive Agreement.
The Company will not issue any convertible or non-convertible debt or any other securities that are convertible into the Company’s Common Stock without CVP’s prior written consent.
If the Company consents to $150,000 of lender conversions within the ninety (90) days of the Execution Date, the parties agree that for the following ninety (90) days CVP will be entitled to a monthly maximum of $50,000 of lender conversions or $50,000 of monthly installment payments by the Company (in cash or stock).
Sam May, CEO Cabinet Grow, stated, “We very much appreciated the fact that CVP was the first to invest meaningful working capital into the Company. The funds they provided has proven to be invaluable in building our infrastructure and in becoming a public company. We are now preparing a $2.5M equity offering through a PPM. The use of funds will include the elimination of CVP debt, funding our Q3 and Q4 growth projects, including our wholly owned subsidiary, Syrum, and operational cash reserves designed to position the company to be nimble in our M&A efforts. The cooperation of CVP in this process speaks volumes for the relationship the Company has developed with CVP.”
About Cabinet Grow, Inc.
Cabinet Grow, Inc., through its predecessor Universal Hydro, began operations in California in 2008. In April 2014, the company changed its name to Cabinet Grow, Inc. and in May 2014 became a Nevada corporation. The Company, based in Irvine, California, makes cabinet based horticultural systems. The design and production of our hydroponic and soil grow cabinets makes the process of small scale home growing in a self-contained cabinet automated and simplified. Our mission is to make hydroponic and soil growing simpler, more efficient and a better value than other products found on the market.
For more information, check out: http://www.cabinetgrow.com
Forward-Looking Statements. This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “prospects,” “outlook,” and similar words or expressions, or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from any anticipated results, performance or achievements. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company’s forward-looking statements, please see the Company’s Form 10-K filed on March 31, 2015, including but not limited to the discussion under “Risk Factors” therein, which the Company has filed with the SEC and which may be viewed at http://www.sec.gov.
SOURCE: Cabinet Grow, Inc.