James E. Wagner Cultivation Corporation (“
JWC” or
the “
Corporation”) (TSX VENTURE: JWCA; OTCQX:
JWCAF), is pleased to announce that it has entered into a
convertible security funding agreement dated December 29, 2019 (the
“
CSA”), for an amount of up to CDN$10 million (the
“
Convertible Security”) with Lind Global Macro
Fund, LP an entity managed by The Lind Partners (together
“
Lind”). JWC intends to use the proceeds of the
Convertible Security for general working capital purposes.
Pursuant to the CSA, the Convertible Security will
be made available to the Corporation in two tranches, with the
first tranche (the “First Tranche”) being an
amount of CDN$2 million, which is anticipated to be drawn down
within 5 business days of execution. The Corporation has the
ability to request additional funding in an amount between
CDN$500,000 and CDN$8 million under a second tranche closing under
the CSA. Funds advanced under the CSA shall be repaid over a period
of 24 months from advancement. The parties have agreed to a
pre-paid interest amount on the First Tranche equal to CDN$400,000
and a commitment fee in the amount of CDN$100,000. In
addition, JWC has agreed to grant the Investor 4,000,640 warrants
to purchase common shares in connection with the First Tranche
closing, which will have an exercise price of CDN$0.3379 and be
exercisable for 24 months from the issuance date.
JWC may repurchase the amount outstanding of the
Convertible Security at any time (a
“Buy-back”). In the event of a
Buy-back, JWC will have the option to convert up to 25% of the
amount outstanding at the First Conversion Price (as defined
below). The conversion price for the funds advanced under the
First Tranche shall be CDN$0.25 (the “First
Conversion Price”), which is equal to the
five-day volume weighted average price (“VWAP”)
of the Corporation’s common shares (the “Common
Shares”) on the TSX Venture Exchange on December
27, 2019. The conversion price for funds advanced under the second
tranche, if any, shall be equal to the five-day VWAP of the Common
Shares on the trading day immediately prior to the earlier of a
news release announcing the second tranche closing, a price
reservation form and the closing date.
Lind may, one or more times and from time-to-time
at any time during the term of the Convertible Security, provide
JWC with a conversion notice (a “Conversion
Notice”) indicating that it requires a conversion
of all or part of the amount outstanding of the Convertible
Security (less the commitment fees), provided that in no event may
a conversion occur during the four months and one day following a
closing date. The conversion of any of the First Tranche shall be
effected at the First Conversion Price.
In respect of the Convertible Security, JWC will
grant Lind a security interest in all current and after acquired
property of the Corporation and its subsidiaries, subject to
certain permitted liens, and being subordinate to Trichome
Financial Corp. James E. Wagner Cultivation Ltd. and GrowthStorm
Inc., the Corporation’s wholly-owned subsidiaries, will act as
guarantors to the obligations of the Corporation pursuant to the
CSA.
Nathan Woodworth, President and Chief Executive
Officer of JWC, said: “We are pleased to announce the execution of
our agreement with Lind Global Macro Fund. This convertible
security is an important part of our ongoing efforts to strengthen
our balance sheet and remain prepared for changing conditions in
2020 and beyond. In combination with our recently announced equity
financing, this CSA satisfies the requirements of the Trichome loan
agreement and unlocks access to the second tranche of that
financing. Together, this array of financing tools provides a
strong opportunity at an optimized risk and cost.”
About James E. Wagner Cultivation
Corporation
James E. Wagner Cultivation Corporation’s wholly
owned subsidiary is a Licensed Producer under the Cannabis
Regulations, formerly the Access to Cannabis for Medical
Purposes Regulations (“ACMPR”). JWC is a
premium cannabis brand, focusing on producing clean, consistent
cannabis using an advanced and proprietary aeroponic platform named
GrowthSTORM™. JWC began as a collective of patients and growers
under the Marihuana Medical Access Regulations (the precursor to
ACMPR). Since its inception, JWC has remained focused on providing
the best possible patient experience. JWC is a family-founded
company with deep roots planted in the local community. JWC’s
operations are based in Kitchener, Ontario. Learn more
at www.jwc.ca.
Notice regarding forward-looking
statements:
This press release contains statements including
forward-looking information for purposes of applicable securities
laws (“forward-looking statements”) about JWC and
its business and operations which include, among other things,
statements regarding JWC and any information with respect to the
entering into of the CSA, the availability of funds thereunder, and
the issuance of warrants by the Corporation to Lind pursuant to the
CSA. The forward-looking information contained in this news release
are based on the Corporation’s current internal expectations,
estimates, projections, assumptions, and beliefs and views of
future events which management believes to be reasonable in the
circumstances, including expectations and assumptions regarding:
general economic conditions, the expected timing and cost of
expanding the Corporation’s production capacity, the internal
opportunities, the development of new products and product formats,
the Corporation’s ability to retain key personnel, the
Corporation’s ability to continue investing in its infrastructure
to support growth, the impact of competition, trends in the
Canadian cannabis industry and changes in laws, rules, and events,
performance or results, and will not necessarily be accurate
indications as to whether, or the times at which, such events,
performance or results will occur or be achieved. The
forward-looking statements can be identified by the use of such
words as “anticipated”, “will”, “expected”, “approximately”, “may”,
“could”, “would” or similar words and phrases. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results to differ materially
from those implied in the forward-looking statements. For example,
risks include risks regarding the cannabis industry, economic
factors, the equity markets generally, funding and grant related
risks and risks associated with growth and competition as well as
the risks identified in the Corporation’s filings with the Canadian
securities regulators, which filings are available at
www.sedar.com. Although JWC has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results to differ from those anticipated, estimated or intended.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release and are based on current assumptions which management
believes to be reasonable. The Corporation disclaims any intention
or obligation, except to the extent required by law, to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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.
Company ContactNathan Woodworth,
President & CEO of JWC(519) 594-0144 x 421nathan@jwc.ca
Investor RelationsJonathan
LeuchsCMA (949) 432-7758 JWCA@cma.team
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