C21 Investments Inc. (CSE:CXXI) (OTC:CXXIF) announced Thursday its CEO, Sonny Newman, restructured the total of the company’s secured note in his possession.

Some $15.2 million worth of secured notes with a maturity due on Jan. 1 have been restructured and will be amortized over a 30-month term at the interest rate of 9.5%.

The vertically-integrated cannabis company has also ensured financial support from three investment managers — JW Asset Management, Wasatch Global Investors and CB1 Capital Management. These firms, together with Newman, will contribute an equity commitment for compensation of all of C21 Investment’s existing convertible debentures.

Funds advanced by the investors will be traded for the company’s common shares to be issued at the same price of the debenture conversion terms — C$0.80 per share.

C21 chair Bruce Macdonald told Benzinga that the company didn’t want to raise funds just to build cash reserve as a contingency.

Instead, they chose to create an insurance, or a contingent backstop, in case that debentures weren’t converted but submitted for repayment, backstop providers would purchase shares at their conversion price (C$0.80 per share), in this manner, providing the company with the necessary funds to repay the debentures holders at maturity.

Macdonald noted that the “price” of this insurance was the granting of 6.2 million warrants exercisable at C$1, and concluded that this maneuver helped them avoid one of the usual risks companies with mature debt experience – the hyper-dilution of equity holders.

"We are pleased that Sonny will be extending the maturity of his senior secured note for a full 30 months until June 2023,” Macdonald said. “We are also excited to announce this transformative agreement with our three strategic partners which reflects their confidence in C21 to build on its strong performance to date and capitalize on future growth opportunities. In addition, Sonny's participation further demonstrates his commitment to the future success of the Company. These agreements considerably strengthen C21's balance sheet and position the Company to execute on its strategy in conjunction with its ongoing negotiation of a non-dilutive debt facility."

Wasatch Global Investors is a Salt Lake City, Utah-based registered investment manager that had $23.8 billion in assets under management (AUM) at the end of July.

JW Asset Management is a New York-headquartered fund manager with more than $1 billion in AUM; its founder and CIO, Jason Wild is chairman at TerrAscend (OTCQX:TRSSF) and Arbor Pharmaceuticals.

CB1 is based in Port Washington, New York. The investment manager and advisor focuses on cannabinoid supply chains.