Emblem Completes Bought Deal Financing
February 02 2018 - 12:08PM
NOT FOR DISTRIBUTION TO UNITED STATES
NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED
STATES.
Emblem Corp. (TSXV:EMC) (EMC.WT)
("
Emblem" or the "
Company") is
pleased to announce that it has closed its previously announced
bought deal short form prospectus offering, including the exercise
in full of the Underwriters’ (as defined below) over-allotment
option (the "
Offering"). In connection with the
Offering, the Company issued 14,024,391 units of the Company (the
"
Units") and 25,000 8.0% convertible unsecured
debentures of the Company due in 2021 (the "
Convertible
Debentures"). The Units were sold at a price per Unit of
$2.05 for gross proceeds of $28,750,001.55 and the Convertible
Debentures were sold at a price per Convertible Debenture of $1,000
for gross proceeds of $25,000,000, for total aggregate gross
proceeds of $53,750,001.55. The Offering was underwritten by a
syndicate of underwriters led by Eight Capital and included
Canaccord Genuity Corp., Echelon Wealth Partners Inc. and GMP
Securities L.P. (collectively, the
"
Underwriters").
Each Unit consists of one common share in the
capital of the Company (each, a “Common Share”)
and one common share purchase warrant (each, a
"Warrant"). Each Warrant will entitle the holder
thereof to acquire, subject to adjustment in certain circumstances,
one additional Common Share at an exercise price of $2.70 per
Common Share until February 2, 2020.
The Convertible Debentures will bear interest at
an annual rate of 8.00% payable in arrears in equal installments
semi-annually. The maturity date of the Convertible Debentures will
be February 2, 2021 (the "Maturity Date"). Each
Convertible Debenture will be convertible at the holder's option
into Common Shares (the "Conversion Shares") at
any time prior to the close of business on the business day
immediately preceding the Maturity Date at a conversion price (the
"Conversion Price") of $2.30 per Conversion Share,
subject to adjustment in certain events as described in a debenture
indenture dated as of February 2, 2018 entered into between the
Company and Computershare Trust Company of Canada (the
"Indenture"). Pursuant to the terms of the
Indenture, the Company may require the conversion of all of the
principal amount of the then outstanding Convertible Debentures at
the Conversion Price on not less than thirty days’ notice should
the daily volume weighted average trading price of the outstanding
Common Shares on the TSX Venture Exchange be greater than $3.45 for
any ten consecutive trading days.
The net proceeds of the Offering will be
partially used to fund the currently unfunded portion of the
planning, design, development, construction and implementation
(including the purchase of certain designated capital equipment) of
the Company's new facility which is expected to be comprised of up
to approximately 135,000 square feet of greenhouse space and 35,000
square feet of infrastructure space. The remaining net
proceeds of the Offering will be used to fund pharmaceutical
formulation development, including research and trials, and for
general working capital purposes, which may include establishing
new international distribution channels in jurisdictions where
there is a federal legal framework for medical cannabis and the
associated costs of compliance with applicable regulatory
requirements. For additional details regarding the use of proceeds
of the Offering, please see the Company's short form prospectus
dated January 29, 2018 which is available under the Company's
profile at SEDAR at www.sedar.com.
The Company also announces that holders of
$15,000,000 of the Company’s previously issued convertible
debentures due November 16, 2020 converted their debentures into
Common Shares at the stated conversion price of $1.95 per Common
Share. In connection with the conversion, Emblem issued 7,692,307
Common shares to the debenture holders.
Upon completion of the Offering the Company will
have a cash and cash equivalents balance of approximately
$87,000,000.
The securities offered in the Offering have not
been, and will not be, registered under the U.S. Securities Act or
any U.S. state securities laws, and may not be offered or sold in
the United States or to, or for the account or benefit of, United
States persons absent registration or any applicable exemption from
the registration requirements of the U.S. Securities Act and
applicable U.S. state securities laws. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy
securities in the United States, nor will there be any sale of
these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
About Emblem
Emblem is a fully integrated licensed producer
and distributor of medical cannabis and cannabis derivatives in
Canada under the ACMPR (Access to Cannabis for Medical Purposes
Regulations). Led by a team of cannabis experts and former health
care and pharma executives, it has three distinct verticals –
cannabis production, patient education centers, and pharmaceutical
dosage form development. Emblem trades under the ticker symbol
“EMC” on TSX Venture Exchange.
Forward-looking statements
This news release may contain "forward-looking
information" and "forward-looking statements" within the meaning of
applicable Canadian securities legislation, including, without
limitation, statements regarding the use of proceeds from the
Offering and the future results of operations, performance and
achievements of the Company. All information contained herein that
is not clearly historical in nature may constitute forward-looking
information. Forward-looking statements are necessarily based upon
a number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant
business, economic and competitive risks, uncertainties and
contingencies that may cause actual financial results, performance
or achievements to be materially different from the estimated
future results, performance or achievements expressed or implied by
those forward-looking statements and the forward-looking statements
are not guarantees of future performance. Except as required by
law, the Company disclaims any obligation to update or revise any
forward-looking statements. Readers are cautioned not to put undue
reliance on these forward-looking statements. This news release
contains information obtained by the Company from third parties and
believes such information to be accurate but has not independently
verified such 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.
For further information contact:
Ali MahdaviEmblem Corp.(416)
962-3300alimahdavi@emblemcorp.com
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