TORONTO, Oct. 3, 2019 /CNW/ - Canopy Rivers Inc. (the
"Company") announces that, in connection with a financing
announced by TerrAscend Corp. ("TerrAscend") on October 2, 2019, its wholly owned subsidiary
Canopy Rivers Corporation ("Canopy Rivers") has acquired
ownership and control over (i) $13,243,000 principal amount of unsecured
convertible debentures of TerrAscend Canada Inc. (the
"Debentures"); and (ii) 333,723 common share purchase
warrants of TerrAscend (the "Warrants").
The principal amount of the Debentures is convertible into fully
paid and non-assessable common shares of TerrAscend ("Common
Shares") or exchangeable shares of TerrAscend ("Exchangeable
Shares") at the option of the holder or upon the occurrence of
certain events at a conversion price of $5.95 per share. The Debentures mature on
October 2, 2024 and bear interest at
a rate of 6% per annum.
Each Warrant entitles Canopy Rivers to acquire one Common Share,
at an exercise price of $6.49, and
such Warrants will be exercisable following changes in U.S. federal
laws regarding the cultivation, distribution or possession of
marijuana, the compliance of TerrAscend with such laws, and the
approval of the securities exchanges upon which the securities of
the Company are listed.
The $13,243,000 aggregate
principal amount of Debentures are convertible into 2,225,714
Exchangeable Shares (or Common Shares), representing an increase of
approximately 11.4% in Canopy Rivers' holdings of Exchangeable
Shares. The 333,723 Warrants are exercisable for 333,723
Common Shares, representing approximately 0.6% of the outstanding
Common Shares, calculated on a partially diluted basis assuming the
full exercise of the 333,723 Warrants held by Canopy Rivers
only.
Immediately prior to the acquisition of the Debentures and the
Warrants, Canopy Rivers held 19,445,285 Exchangeable Shares,
representing 50% of the issued and outstanding Exchangeable
Shares.
Immediately following the acquisition of the Debentures and the
Warrants, Canopy Rivers held 19,445,285 Exchangeable Shares,
$13,243,000 aggregate principal
amount of Debentures, and 333,723 Warrants. In the event all
of the principal amount of the Debentures is fully converted into
Exchangeable Shares, Canopy Rivers would hold 21,670,999
Exchangeable Shares (including the 19,445,285 Exchangeable Shares
currently held by Canopy Rivers). These combined holdings would
represent approximately 52.7% of the issued and outstanding
Exchangeable Shares, calculated on a partially diluted basis
assuming the full conversion into Exchangeable Shares of the
principal amount of the Debentures held by Canopy Rivers
only. In the event all of the 333,723 Warrants are fully
exercised, Canopy Rivers would hold 333,723 Common Shares,
representing approximately 0.6% of the outstanding Common Shares,
calculated on a partially diluted basis assuming the full exercise
of the 333,723 Warrants held by Canopy Rivers only.
Canopy Rivers acquired the Debentures and the Warrants for
investment purposes only and not with a view to materially
affecting control of TerrAscend. Depending upon market conditions
and other factors, and in compliance with applicable regulatory
requirements, Canopy Rivers may, from time to time, acquire or
dispose of additional securities of TerrAscend, in the open market,
by private agreement or otherwise, or acquire interests in or enter
into related financial instruments involving a security of
TerrAscend.
The head office of the Company is located at 40 King Street
West, Suite 2504, Toronto, Ontario
M5H 3Y2. The head office of TerrAscend is located at P.O. Box
43125, Mississauga, Ontario L5B
4A7.
A copy of the early warning report filed by Canopy Rivers can be
found under TerrAscend's profile on SEDAR at www.sedar.com or by
contacting Canopy Rivers as set out below.
About Canopy Rivers
Canopy Rivers is a unique investment and operating platform
structured to pursue investment opportunities in the emerging
global cannabis sector. Canopy Rivers identifies strategic
counterparties seeking financial and/or operating support. Canopy
Rivers has developed an investment ecosystem of complementary
cannabis operating companies that represent various segments of the
value chain across the emerging cannabis sector. As the portfolio
continues to develop, constituents will be provided with
opportunities to work with Canopy Growth Corporation (TSX: WEED,
NYSE: CGC) and collaborate among themselves, which Canopy Rivers
believes will maximize value for its shareholders and foster an
environment of innovation, synergy and value creation for the
entire ecosystem.
Forward-Looking Statements
This news release contains statements which constitute
"forward-looking information" within the meaning of applicable
securities laws, including statements regarding the plans,
intentions, beliefs and current expectations of Canopy Rivers with
respect to future business activities and operating performance.
Forward-looking information is often identified by the words "may",
"would", "could", "should", "will", "intend", "plan", "anticipate",
"believe", "estimate", "expect" or similar expressions.
Investors are cautioned that forward-looking information is
not based on historical fact but instead reflects management's
expectations, estimates or projections concerning future results or
events based on the opinions, assumptions and estimates of
management considered reasonable at the date the statements are
made. Although Canopy Rivers believes that the expectations
reflected in such forward-looking information are reasonable, such
information involves risks and uncertainties, and undue reliance
should not be placed on such information, as unknown or
unpredictable factors could have material adverse effects on future
results, performance or achievements of Canopy Rivers. Among the
key factors that could cause actual results to differ materially
from those projected in the forward-looking information are the
following: regulatory and licensing risks; the ability of Canopy
Rivers to exercise the Warrants in order to acquire common shares
of TerrAscend; changes in general economic, business and political
conditions, including changes in the financial markets; the global
regulatory landscape and enforcement related to cannabis, including
political risks and risks relating to regulatory change; risks
relating to anti-money laundering laws; compliance with extensive
government regulation; public opinion and perception of the
cannabis industry; and the risk factors set out in Canopy Rivers'
annual information form dated July 15,
2019, filed with the Canadian securities regulators and
available on Canopy Rivers' profile on SEDAR
at www.sedar.com.
Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
information prove incorrect, actual results may vary materially
from those described herein as intended, planned, anticipated,
believed, estimated or expected. Although Canopy Rivers has
attempted to identify important risks, uncertainties and factors
that could cause actual results to differ materially, there may be
others that cause results not to be as anticipated, estimated or
intended. Canopy Rivers does not intend, and does not assume any
obligation, to update this forward-looking information except as
otherwise required by applicable law.
SOURCE Canopy Rivers Inc.