Acquisition of Whistler Medical Marijuana Corp.
On March 1, 2019, we completed the acquisition of all of the issued and outstanding shares of Whistler Medical Marijuana Corp. in consideration of the
issuance of 13,667,933 common shares with a deemed issuance price of $9.77. The transaction was completed by way of a three-cornered amalgamation among the Company, Whistler and a wholly-owned subsidiary of the Company. We are also obligated to make
milestone payments to the former Whistler shareholders in the amounts of $10,000,000 (the First Milestone Payment) and $30,000,000 (the Second Milestone Payment) in Common Shares at the volume weighted average
trading price of the Common Shares on the TSX for the five trading days immediately prior to the date of issuance. The First Milestone Payment will be issued on the earlier of March 1, 2020 and the date on which Whistler achieves full
production. The Second Milestone Payment will be issuable upon satisfactory licensing of Whistlers Pemberton facility.
Senior Advisory Services
Agreement
On March 12, 2019 we entered into a senior advisory services agreement (the Services Agreement) with 280 Park ACI
Holdings, LLC, of New York, New York (ACI Holdings), of which Mr. Nelson Peltz is the principal, and appointed Mr. Nelson Peltz as a strategic advisor to the Company. Pursuant to the Services Agreement, Mr. Peltz,
acting through ACI Holdings and its partners, members, officers and employees, provides direct guidance and advice on business strategy, marketing, operations and business development to our executive management, board of directors and financial
advisors. The services include direct responsibility for formulating strategic advice regarding potential US corporate initiatives and periodic reporting to our Board and executive management. As consideration for the services, we granted to
Mr. Peltz options to purchase 19,961,754 Common Shares exercisable at a price of $10.34 per Common Share for a period of seven years. The options vest rateably on a quarterly basis over a four-year period. The vesting criteria includes
acceleration of vesting of the options upon the occurrence of certain specified events, which include the consummation of certain defined transactions, the closing price of Common Shares being at least $31.02 for a specified period, and the closing
price of Common Shares being at least $41.36 for a specified period. We have entered into a Registration Rights agreement with ACI Holdings to register these options as well as the Common Shares underlying such options so that they may be freely
transferred.
Acquisition of Chemi Pharmaceutical Inc.
On April 24, 2019, we completed the acquisition of Chemi Pharmaceutical Inc. (Chemi) a privately-held, Ontario-based laboratory specialized
in providing analytic services to pharmaceutical and cannabis industries. We acquired all of the issued and outstanding shares of Chemi in exchange for 83,299 Common Shares issued at closing and 41,649 Common Shares payable upon achievement of
certain milestones.
Chemi has a Health Canada Drug Establishment Licence enabling it to perform certified GMP compliant quality control analytical
testing. In addition, Chemi has received US FDA accreditation for its facility. Acquiring Chemi with its Drug Establishment Licence satisfies a prerequisite for applying for a Cannabis Drug Licence, which is required for the development of cannabis
therapeutics within the global medical cannabis market.
Investment in EnWave Corporation
On April 26, 2019, we completed a $10 million equity investment in EnWave Corporation (EnWave), a publicly-traded, Vancouver-based
technology company. Pursuant to the terms of a share purchase agreement dated April 25, 2019, we purchased 5,302,227 common shares in the capital of EnWave (the EnWave Shares) at a deemed price of $1.886 per share, based on the
volume weighted average trading price (VWAP) for EnWaves Shares on the TSX Venture Exchange (the TSXV) for the five consecutive trading days up to and including April 22, 2019. As consideration for the
EnWave Shares, we issued to EnWave 840,576 Common Shares at a deemed price of $11.8966 per share. The EnWave Shares represent approximately 4.91% of the issued and outstanding common shares of EnWave on a non-diluted basis.
Letter Agreement with Hempco Food and Fiber Inc.
On
April 16, 2019, we entered into a binding letter agreement (the Letter Agreement) setting out the principal terms and conditions upon which we will acquire all of the issued and outstanding common shares of Hempco Food and
Fiber Inc. (Hempco) not already owned by Aurora for $1.04 per Hempco share, payable in Common Shares at a deemed price of $12.01 per Common Share, reflecting a valuation of approximately C$63.4 million on a fully diluted
basis. We currently own approximately 52% of the outstanding Hempco shares.
Assuming completion of the acquisition, Hempco will become a wholly owned
subsidiary of Aurora. Hempcos shares will be de-listed from the TSX Venture Exchange and it is expected that Aurora will apply to cause Hempco to cease being a reporting issuer under applicable Canadian securities laws. The acquisition is
subject to the execution of a definitive agreement, the receipt of an independent valuation of Hempco, receipt of all regulatory, court, and shareholder approvals, and other customary closing conditions.
In anticipation of the acquisition, on January 15, 2019, we invested $5.0 million in a secured convertible debenture in Hempco. The debenture bears
interest at 8% per annum and is convertible at $1.18 per Hempco share at Auroras election until January 15, 2021.
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