WeedMD Inc. (TSX-V:WMD) (OTCQX:WDDMF)
(FSE:4WE) (“
WeedMD” or the
“
Company”), a federally-licensed producer and
distributor of medical-grade cannabis, is pleased to announce that
it has closed its previously-announced bought-deal short-form
prospectus offering of convertible debenture units (the
“
Convertible
Debenture Units”) at a price of
$1,000 per Convertible Debenture Unit for aggregate gross proceeds
of $13,115,000 (the “
Offering”), which includes
proceeds from the over-allotment option
. The
Offering was led by Mackie Research Capital Corporation, and
included Haywood Securities Inc. (together, the
“
Underwriters”).
The Underwriters were granted a 15%
over-allotment option until October 25, 2019. In connection with
the Offering, WeedMD is pleased to announce additional gross
proceeds of $1,115,000 from the over-allotment option. An
additional 1,115 Convertible Debenture Units (the
“Additional Convertible Debentures Units”) were
issued today representing additional gross aggregate proceeds of
$1,115,000 and the total gross proceeds from Convertible Debenture
Units sold in the Offering, including the 12,000 Convertible
Debenture Units sold initially and the 1,115 Additional Convertible
Debenture Units sold pursuant to the over-allotment option, is
$13,115,000.
Each Convertible Debenture Unit issued pursuant
to the Offering consists of one $1,000 principal amount of 8.5%
interest bearing unsecured convertible debenture of the Company
(each a "Convertible Debenture") and 625 common
share purchase warrants (each a "Warrant"). Each
Warrant entitles the holder thereof to purchase one common share
(“Common Share”) in the capital of the Company at
an exercise price of $1.80 until September 25, 2022. 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 (“TSXV”) is greater than $3.60
for 20 consecutive trading days, the Company may, within 10
business days of the occurrence of such event, deliver a notice
(including a press release) 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 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 mature on September 25, 2022 (the “Maturity
Date”). The principal amount of each Convertible Debenture
is 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 per Common Share
(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 TSXV be
greater than $3.20 for the consecutive 20 trading days preceding
the notice.
In consideration for the services provided by
the Underwriters, the Company has paid a cash commission equal to
6% of the gross proceeds of the Offering and issued to the
Underwriters an aggregate of: (i) 491,812 non-transferable broker
warrants, which are exercisable into Common Shares at a price $1.60
per Common Share until September 25, 2022; and (ii) 491,812
non-transferable broker warrants, which are exercisable into Common
Shares at a price $1.80 per Common Share until September 25,
2022.
The net proceeds received by the Company from
the Offering will be used for purchasing new equipment and
retrofitting the Aylmer Facility, building an outdoor processing
facility at the Strathroy facility, working capital requirements
and other general corporate purposes.
The TSXV has conditionally accepted the Offering
and the listing of the Convertible Debentures and Warrants. It is
expected that the Convertible Debentures and Warrants will commence
trading on the TSXV on September 27, 2019 under the symbols
“WMD.DB” and “WMD.WT”, respectively.
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.
Follow WeedMD & Color
Cannabis:
Facebook:
https://www.facebook.com/weedmd/LinkedIn:
https://www.linkedin.com/company/weedmd/?originalSubdomain=frTwitter:
https://twitter.com/WeedMDInstagram:
https://www.instagram.com/weedmd/
&
https://www.instagram.com/callitcolor/
For further information, please
contact:
WeedMD Inc.
For Investor Inquiries:
James Williams Director, Capital Markets Email:
investor@weedmd.com
For Media Inquiries:
Marianella delaBarreraVP, Communications &
Corporate AffairsTel: 416-897-6644Email: marianella@weedmd.com
To learn more, visit us
at www.weedmd.com
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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