Emerald Health Therapeutics, Inc. (“Emerald” or the “Company”)
(TSXV: EMH; OTCQX: EMHTF) has entered into a binding term sheet
with a single Canadian institutional accredited investor (the
“Investor”) under which the Investor has agreed, subject to certain
customary conditions, to purchase 2,500 secured convertible
debenture units (each, a “Convertible Debenture Unit”) of the
Company at a price of $10,000 per Convertible Debenture Unit (the
“Issue Price”) for gross proceeds of $25,000,000 (the “Offering”).
Each Convertible Debenture Unit is comprised of
one 5.0% secured convertible debenture of the Company in the
principal amount of $10,000 (each, a "Convertible Debenture") and
5,000 common share purchases warrants of the Company (each, a
"Warrant").
The Convertible Debentures will have a maturity
date of 24 months from their date of issue (the “Maturity Date”)
and will bear interest (at the option of the Company payable in
cash or, pursuant to TSXV rules, in common shares of the Company
(“Common Shares”)) from their date of issue at 5.0% per annum,
accrued and payable semi-annually on June 30th and December 31st of
each year. The final terms of the Convertible Debentures will be
determined by negotiation between the Company and the Investor and
will include certain covenants relating to the business of the
Company.
The Convertible Debentures will be convertible,
at the option of the holder, into Common Shares at any time prior
to the close of business on the last business day immediately
preceding the Maturity Date. The Convertible Debentures will have a
conversion price of $2.00 per Common Share (the “Conversion
Price”), a 14% premium to the closing price of the Common Shares on
August 27, 2019 on the TSX Venture Exchange (the "TSXV"). If, at
any time prior to the Maturity Date of the Convertible Debentures,
the volume weighted average trading price of the Common Shares on
the TSXV is greater than $3.50 for 10 consecutive trading days, the
Company may force the conversion of the principal amount of the
then outstanding principal amount owing pursuant to the Convertible
Debentures at the Conversion Price provided the Company gives 30
days' notice of such conversion to the holder.
Each Warrant will be exercisable to purchase one
Common Share at an exercise price of $2.00 per share for a period
of 24 months from the date of issue. If, at any time prior to the
expiry date of the Warrants, the volume weighted average trading
price of the Common Shares on the TSXV is greater than $3.50 for 10
consecutive trading days, the Company may deliver a notice to the
holder of Warrants accelerating the expiry date of the Warrants to
the date that is 30 days following the date of such notice.
The Company intends to use the net proceeds of
the Offering to repay the outstanding loan to Emerald Health
Sciences Inc. and the remainder for working capital.
The Convertible Debentures will be offered by
way of a shelf prospectus supplement to be filed in all of the
provinces of Canada, except Quebec, pursuant to National Instrument
44-101 - Short Form Prospectus Distributions.
The closing date of the Offering is scheduled to
be on or about September 4, 2019, and is subject to certain
conditions including but not limited to negotiation of definitive
documentation, due diligence, no material adverse change, and the
receipt of all necessary approvals, including the approval of the
TSXV and applicable securities regulatory authorities.
This press release will not constitute an offer
to sell or the solicitation of an offer to buy nor will there be
any sale of the securities in any state in which such offer,
solicitation or sale would be unlawful. The securities being
offered have not been, nor will they be, registered under the
United States Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the
United States Securities Act of 1933, as amended, and applicable
state securities laws.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
About Emerald Health
Therapeutics
Emerald Health Therapeutics, Inc. is a
Canadian licensed producer of cannabis products, with strategic
initiatives focused on differentiated, value-added product
development for medical and adult-use customers supported by novel
intellectual property, large-scale cultivation, extraction, and
softgel encapsulation, as well as unique marketing and distribution
channels. Its 50%-owned Pure Sunfarms operation in British
Columbia has reached its full run-rate annual production of
approximately 75,000 kg in its first 1.1 million square foot
greenhouse Delta 3 operation; a second 1.1 million square
foot greenhouse is planned to be in full production by the end of
2020. Emerald’s wholly-owned facilities in Québec, a high-quality
indoor growing and processing facility, and British Columbia, an
organic greenhouse and outdoor operation, have started production
and are working toward final licensing amendments. Emerald has also
contracted for approximately 1,200 acres of hemp annually in 2019
to 2022 with the objective of extracting low-cost CBD. Its team is
highly experienced in life sciences, product development,
large-scale agri-business, and marketing.
Emerald is part of the Emerald Health group,
which represents a broad array of companies focused on developing
pharmaceutical, botanical, and nutraceutical products aimed at
providing wellness and medical benefits by interacting with the
human body’s endocannabinoid system.
Please visit www.emeraldhealth.ca for more information or
contact: Rob Hill, Chief Financial Officer (800) 757 3536 Ext. #
5
Emerald Investor Relations (800) 757 3536 Ext.
#5invest@emeraldhealth.ca
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking
Statements: Certain statements made in this press release that are
not historical facts are forward-looking statements and are subject
to important risks, uncertainties and assumptions, both general and
specific, which give rise to the possibility that actual results or
events could differ materially from our expectations expressed in
or implied by such forward-looking statements. Such statements
include the Company's proposed used of the net proceeds of the
Offering including the repayment of the outstanding loan to Emerald
Health Sciences Inc., the anticipated receipt of regulatory
approvals including the approval of the TSXV, the listing on the
TSXV of the Common Shares issuable upon conversion of the
Convertible Debentures and exercise of the Warrants, the closing
date of the Offering, the production and processing capacity of
various facilities; expansion of facilities; and anticipated
production costs.
We cannot guarantee that any forward-looking
statement will materialize, and readers are cautioned not to place
undue reliance on these forward-looking statements. These
forward-looking statements involve risks and uncertainties related
to, among other things, failure to obtain the approval of the TSXV
for the Offering; failure to obtain regulatory approvals; failure
to obtain necessary financing; results of production and sale
activities; results of scientific research; regulatory changes;
changes in prices and costs of inputs; demand for labour; demand
for products; as well as the risk factors described in the
Company’s annual information form and other regulatory filings. The
forward-looking statements contained in this press release
represent our expectations as of the date hereof. Forward-looking
statements are presented for the purpose of providing information
about management's current expectations and plans and allowing
investors and others to obtain a better understanding of our
anticipated operating environment. Readers are cautioned that such
information may not be appropriate for other purposes. The Company
undertakes no obligations to update or revise such statements to
reflect new circumstances or unanticipated events as they occur,
unless required by applicable law.
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