Aurora's Allan
Cleiren appointed to Hempco Board of Directors
TSX: ACB • TSX-V: HEMP
VANCOUVER, Sept. 18, 2017 /CNW/ - Aurora Cannabis Inc.
("Aurora") (TSX:ACB) (OTCQX:ACBFF) (Frankfurt: 21P; WKN:A1C4WM) and Hempco Food
and Fiber Inc. (TSX.V:HEMP) ("Hempco"), are pleased to
announce that, further to Hempco's press releases of June 8, June 16,
June 23, July
31 and September 12, 2017, the
companies have signed definitive agreements permitting them to move
forward with Aurora's strategic investment in Hempco, which remains
subject to Hempco shareholder approval.
As previously announced, the transaction consists of two
connected components: a private placement between the two
companies, and an option agreement in which two of Hempco's
principal shareholders grant to Aurora an option to purchase Hempco
shares owned by them, thus enabling Aurora to increase its
ownership of Hempco shares should it so choose.
"Once approved by our shareholders, this strategic investment by
Aurora strengthens our company, not just financially, but
especially through the market reach, brand recognition and
exclusive access to innovative technologies that Aurora brings to
the table," said Charles Holmes,
Hempco's CEO. "Additionally, if the current regulations
prohibiting the extraction of cannabidiol (CBD) from hemp products
were to change, which we anticipate will happen in the near to
mid-term future, Hempco will be very well positioned to capitalize
on this opportunity through its relationship with Aurora."
"Our pending investment in Hempco represents an attractive
opportunity for further expansion into another closely-related and
rapidly-growing international market, while at the same time
securing a potentially material source of raw CBD material for our
medical concentrates business," said Terry
Booth, Aurora's CEO. "We look forward to working with
Hempco to capitalize on the many opportunities for growth on a
global scale."
In the private placement, Aurora has entered into an amended and
restated subscription agreement (the "Subscription
Agreement") providing for the purchase of 10,558,676 units
(each a "Unit") of Hempco at a purchase price of
$0.3075 per Unit for total gross
proceeds of $3,246,792 (the
"Private Placement"). Each Unit is to consist of one Hempco
common share (each, a "Hempco Share") and one
non-transferable common share purchase warrant (each, a
"Warrant"). Each Warrant will entitle Aurora to
purchase one additional Hempco Share at a price of $0.41 until the second anniversary of the closing
date. Each Warrant will include an acceleration clause
providing that if the volume weighted average price per Hempco
Share on the TSX Venture Exchange ("TSXV") exceeds
$0.65 for a period of 30 consecutive
calendar days, Hempco will have a limited right to accelerate the
expiration date of the Warrants. The Subscription Agreement
provides that closing of the Private Placement is subject to
conditions, including the execution of an investor rights agreement
and an option agreement with Charles
Holmes and Angela Holmes, TSX
Venture, TSX and Hempco disinterested shareholder approval.
As noted, one of the conditions to completion of the Private
Placement is that Charles Holmes and
Angela Holmes, each of whom is a
principal shareholder, officer and director of Hempco, enter into
an option agreement (the "Option Agreement") granting to
Aurora an option (the "Option") to acquire up to an
aggregate of 10,754,942 Hempco Shares currently owned by them (50%
from Charles Holmes, 50% from
Angela Holmes). This condition
has been satisfied.
Also as noted, another condition to completion of the Private
Placement is that Aurora and Hempco enter into an investor rights
agreement (the "Investor Rights Agreement") that will allow
Aurora to nominate two directors to the Hempco Board of Directors,
require that Hempco adopt and expenditure policy, provide for
certain matters related to CBD extraction from hemp and provide
Aurora with anti-dilution protection. This condition has also
been satisfied.
Both the Option Agreement and the Investor Rights Agreement are
dated September 15, 2017 but will
become effective on the closing of the Private Placement, and
closing of the Private Placement remains subject to disinterested
Hempco shareholder approval. Because they are parties to the
Option Agreement, each of Charles
Holmes and Angela Holmes has
an interest in the transaction and they will not be permitted to
vote at the extraordinary shareholder meeting to be called by
Hempco to approve the transaction and the change of control that
will result from the issuance of the Hempco Units to Aurora.
If the shareholders of Hempco do not approve the Private
Placement, both the Option Agreement and the Investor Rights
Agreement will be void.
Although the Investor Rights Agreement will not take effect
until the closing of the Private Placement, Hempco has signed an
undertaking, effective immediately, to use reasonable efforts to
appoint the two Aurora nominees to the Hempco Board immediately,
that it will use reasonable efforts to find a suitable candidate to
be the new Chief Executive Officer of Hempco, with the goal of
having the new candidate in place as soon as reasonably possible,
that Hempco will adopt an expenditure policy, and that funds
advanced to Hempco by Aurora pursuant to a bridge loan (see
description below) will be used to develop the Hempco facility in
Nisku, Alberta, and for the
payment of certain Hempco accounts receivable.
Hempco will now call an extraordinary meeting of its
shareholders for the purpose of asking them to approve the change
of control that will result from completion of the Private
Placement transaction.
Further to the Hempco undertaking mentioned above, and effective
immediately, the Hempco Board of Directors has appointed Mr.
Allan Cleiren as a director of
Hempco. Mr. Cleiren is the Chief Operating Officer of Aurora
and is the first of two nominees appointed, expanding the Board to
6 directors, 4 of whom are independent.
Mr. Cleiren is Chief Operating Officer of Aurora Cannabis Inc.
and has nearly three decades of leadership experience in
finance and operations management with both privately and publicly
held companies. Throughout his career, Mr. Cleiren's focus has been
on achieving operational excellence and efficiency, contributing to
significant revenue and profitability growth. Mr. Cleiren is also
is a member of the Board of Directors of Universal Rail Services
Inc., Metalogic Inspection Services Inc., and is Chair of the Board
for the Alberta Automobile Insurance Rate Board.
In order to enable Hempco to pay certain obligations in advance
of the closing of the Private Placement, Aurora has agreed to make
a secured bridge loan to Hempco in the amount of $1,500,000. Hempco intends to repay this
loan, together with a prior Aurora loan to Hempco in the amount of
$750,000, out of the proceeds of the
Private Placement. If the Private Placement does not close,
both loans will mature on December 21,
2017.
About Hempco
For more than 12 years Hempco has been a trusted and respected
pioneer, innovator and provider of premier hemp seed foods. Hempco
is committed to developing hemp foods, hemp fiber and hemp
nutraceuticals, a "tri-crop" opportunity for producers and
processors. Hempco is expanding its processing ability to meet
global demands in a 56,000 sq. ft. facility located at Nisku, Alberta. Hempco's common shares
trade on the TSX Venture Exchange under the symbol "HEMP". Hempco®
has grown its business significantly and is generating value and
profits for shareholders.
About Aurora
Aurora's wholly-owned subsidiary, Aurora Cannabis Enterprises
Inc., is a licensed producer of medical cannabis pursuant to Health
Canada's Access to Cannabis for Medical Purposes Regulations
("ACMPR"). The Company operates a 55,200 square foot,
state-of-the-art production facility in Mountain View County,
Alberta, and is currently
constructing a second 800,000 square foot production facility,
known as "Aurora Sky", at the Edmonton International Airport, and has
acquired, and is undertaking completion of, a third 40,000 square
foot production facility in Pointe-Claire, Quebec, on Montreal's West Island. In
addition, the Company holds approximately 9.6% of the issued shares
(12.9% on a fully-diluted basis) in leading extraction technology
company Radient Technologies Inc., based in Edmonton, and is the cornerstone investor with
a 19.9% stake in Cann Group Limited, the first Australian company
licensed to conduct research on and cultivate medical cannabis.
Aurora also owns Pedanios, a leading wholesale importer, exporter,
and distributor of medical cannabis in the European Union ("EU"),
based in Germany. Aurora's common shares trade on TSX under
the symbol "ACB".
On behalf of the Board of Directors,
AURORA CANNABIS
INC.
|
HEMPCO FOOD AND FIBER
INC.
|
|
|
Terry
Booth
|
Charles
Holmes
|
CEO
|
CEO
|
This news release includes statements containing certain
"forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"). Forward-looking
statements are frequently characterized by words such as "plan",
"continue", "expect", "project", "intend", "believe", "anticipate",
"estimate", "may", "will", "potential", "proposed" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. These statements are only predictions.
Various assumptions were used in drawing the conclusions or making
the projections contained in the forward-looking statements
throughout this news release. Forward-looking statements in this
press release include those concerning Hempco's anticipation of
shareholder approval, its belief that Aurora's strategic investment
will strengthen Hempco, and its anticipation that the current
regulations prohibiting the extraction of cannabidiol (CBD) from
hemp products will change in the near to mid-term future and that,
if they do, Hempco will be very well positioned to capitalize on
this opportunity through its relationship with Aurora.
Forward-looking statements are based on the opinions and
estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ
materially from those projected in the forward-looking statements.
The Company is under no obligation, and expressly disclaims any
intention or obligation, to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as expressly required by applicable
law.
Neither TSX nor its Regulation Services Provider (as that
term is defined in the policies of Toronto Stock Exchange) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Aurora Cannabis Inc.