WeedMD Inc. (“
WeedMD” or the
“
Company”) (TSXV:WMD) is pleased to announce that
is has entered into an agreement with Mackie Research Capital
Corporation as the lead underwriter and sole bookrunner (the
"
Lead Underwriter"), on its own
behalf and on behalf of a syndicate of underwriters, including
Haywood Securities Inc. (together with the Lead Underwriter, the
“
Underwriters”), pursuant to which the
Underwriters have agreed to purchase, on a bought-deal basis,
10,000 convertible debenture units (the “
Debenture
Units”) for gross proceeds to the Company of $10,000,000
(the "
Offering") at a price of $1,000 per
Debenture Unit.
Each Convertible Debenture Unit will consist of
one 8.5% unsecured convertible debenture (the "Convertible
Debentures") and 625 common share purchase warrants of the
Company (the "Warrants"). Each Warrant shall
entitle the holder thereof to purchase one common share in the
capital of the Company (a “Common Share”) at an
exercise price of $1.80 (the “Exercise Price”) at
any time up to 36 months following Closing of the Offering.
Provided that if, at any time prior to the expiry date of the
Warrants, the volume weighted average trading price of the Common
Shares on the TSX Venture Exchange (the
“Exchange”), or other principal exchange on which
the Common Shares are listed, is greater than $3.60 for 20
consecutive trading days, the Company may, within 15 days of the
occurrence of such event, deliver a notice to the holders of
Warrants accelerating the expiry date of the Warrants to the date
that is 30 days following the date of such notice (the
“Accelerated Exercise Period”). Any unexercised
Warrants shall automatically expire at the end of the Accelerated
Exercise Period.
The Convertible Debentures shall bear interest
at a rate of 8.5% per annum from the date of issue, payable
semi-annually in arrears on the last day of June and December in
each year and will mature 36 months from the date of issuance (the
“Maturity Date”).
The principal amount of each Convertible
Debenture (the “Principal Amount”) shall be
convertible, for no additional consideration, into Common Shares at
the option of the holder at any time prior to the earlier of: (i)
the close of business on the Maturity Date, and (ii) the business
day immediately preceding the date specified by the Company for
redemption of the Convertible Debentures upon a change of control
at a conversion price equal to $1.60 (the “Conversion
Price”). The Company may force the conversion of the
principal amount of the then outstanding Convertible Debentures at
the Conversion Price on not more than 60 days’ and not less than 30
days’ notice should the daily volume weighted average trading price
of the Common Shares on the Exchange be greater than $3.20 for the
consecutive 20 trading days of the Common Shares on the Exchange
preceding the notice.
The net proceeds from the Offering will be used
for working capital and general corporate purposes.
The Debenture Units will be offered by way of a
short form prospectus to be filed in those provinces of Canada
other than Quebec as the Underwriters may designate pursuant to
National Instrument 44-101 – Short Form Prospectus Distributions
and may be offered in the United States on a private placement
basis pursuant to an appropriate exemption from the registration
requirements under applicable U.S. law. The Company will use
commercially reasonable efforts to obtain the necessary approvals
to list the Convertible Debentures, the Warrants, Compensation
Option Shares, and the Common Shares issuable upon conversion of
the Convertible Debentures, Warrants and Compensation Option
Warrants on the TSX Venture Exchange.
The closing of the Offering is expected to occur
on or about the week of September 25, 2019 (the
“Closing”) and is subject to the Company receiving
all necessary regulatory approvals, including the approval of the
TSX Venture Exchange.
About WeedMD Inc.
WeedMD Inc. is the publicly-traded parent
company of WeedMD Rx Inc., a federally-licensed producer of
cannabis products for both the medical and adult-use markets. The
Company owns and operates a 158-acre state-of-the-art greenhouse
and outdoor facility located in Strathroy, ON. The Company
also operates CX Industries, a wholly-owned subsidiary of WeedMD
Inc. CX operates out of the Company’s fully-licensed 26,000 sq. ft.
Aylmer, Ontario production facility which specializes in cannabis
extraction and processing. WeedMD has a multi-channeled
distribution strategy that includes selling directly to medical
patients, strategic relationships across the seniors’ market and
supply agreements with Shoppers Drug Mart as well as six provincial
distribution agencies where WeedMD’s adult-use brand Color
Cannabis is sold.
For further information, please contact:
WeedMD Inc.
Keith Merker, Chief Executive Officer Tel: 519-765-2440 Ext. 222
Email: investor@weedmd.com
To learn more, visit us at www.weedmd.com
For Media Inquiries:
Marianella delaBarrera VP, Communications & Corporate
Affairs Tel: 416-897-6644 Email: marianella@weedmd.com
Cautionary Note Regarding Forward Looking
Information:
This press release contains "forward-looking
information" within the meaning of applicable Canadian securities
legislation which are based upon WeedMD's current internal
expectations, estimates, projections, assumptions and beliefs and
views of future events. Forward-looking information can be
identified by the use of forward-looking terminology such as
"expect", "likely", "may", "will", "should", "intend",
"anticipate", "potential", "proposed", "estimate" and other similar
words, including negative and grammatical variations thereof, or
statements that certain events or conditions "may", "would" or
"will" happen, or by discussions of strategy.
The forward-looking information in this news
release is based upon the expectations, estimates, projections,
assumptions and views of future events which management believes to
be reasonable in the circumstances. Forward-looking information
includes estimates, plans, expectations, opinions, forecasts,
projections, targets, guidance or other statements that are not
statements of fact. Forward-looking information in this news
release include, but are not limited to, statements with respect to
internal expectations, expectations with respect to actual
production volumes, expectations for future growing capacity and
the completion of any capital project or expansions.
Forward-looking information necessarily involve known and unknown
risks, including, without limitation, risks associated with general
economic conditions; adverse industry events; loss of markets;
future legislative and regulatory developments; inability to access
sufficient capital from internal and external sources, and/or
inability to access sufficient capital on favourable terms; the
cannabis industry in Canada generally; the ability of
WeedMD to implement its business strategies; competition; crop
failure; and other risks.
Any forward-looking information speaks only as
of the date on which it is made, and, except as required by law,
WeedMD does not undertake any obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise. New factors emerge from
time to time, and it is not possible for WeedMD to predict all such
factors. When considering this forward-looking information, readers
should keep in mind the risk factors and other cautionary
statements in WeedMD's Annual Information Form dated June 21, 2019
(the "AIF") and other disclosure documents of WeedMD filed with the
applicable Canadian securities regulatory authorities on SEDAR
at www.sedar.com. The risk factors and other factors noted in
the AIF and other disclosure documents could cause actual events or
results to differ materially from those described in any
forward-looking information.
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
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