NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
ABcann Global Corporation (TSXV:ABCN.VN) (“ABcann” or the “Company”) is pleased to announce the closing of its non-brokered private placement of convertible senior unsecured debentures (the “Debentures”) in the aggregate principal amount of $30,000,000 (the “Financing”).
As previously announced in the Company’s news release of November 27, 2017, the Debentures will:
— mature on the date that is 36 months from the date of issuance;
— bear interest at the rate of 7.0% per annum, computed on the basis of a 360-day year composed of twelve 30-day months, and payable semi-annually on the last day of June and December of each year, commencing on June 30, 2018;
— be convertible, at the option of the holder, into common shares in the capital of the Company (each, a “Share”) at a conversion price of $1.50 per Share; and
— be convertible, at the option of the Company, into Shares if, at any time commencing four months plus one day following the closing date of the Financing, the daily volume weighted average trading price of the Shares on the TSX Venture Exchange (the “TSXV”) (or such other stock exchange or quotation system as the Shares are then principally listed or quoted) for any consecutive 10 day trading period is greater than $2.25 per Share.
The proceeds of the Financing are expected to be used by the Company to make strategic acquisitions in the cannabis industry and for general working capital and corporate purposes.
“As a result of the closing of the Financing, ABcann’s cash position has increased to over $70 million and positions us to pursue additional acquisitions, including our recently announced proposed acquisition of Harvest Medicine Inc.,” commented Barry Fishman, CEO and director of ABcann. “The stronger cash position provides greater flexibility to execute our growth strategy, complete current construction at our Vanluven site, and obtain larger-scale, cost-effective production capacity.”
The Debentures, and the Shares into which the Debentures may be converted (collectively, the “Securities”), are subject to restrictions on resale under applicable Canadian securities laws for a period of four months and one day from the closing of the Financing. None of the Securities have been or will be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities, in any jurisdiction in which such offer, solicitation or sale would require registration or otherwise be unlawful.
MI 61-101 Disclosure
MMCAP International Inc. SPC (the “Subscriber”), the sole subscriber under the Financing, is a “related party” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”) of the Company and, as such, the issuance of the Debentures to the Subscriber is a “related party transaction” within the meaning of MI 61-101. However, the issuance is exempt from: (i) the valuation requirement of MI 61-101 by virtue of the exemption contained in Section 5.5(b), as the Shares are not listed on a market specified in MI 61-101, and (ii) from the minority shareholder approval requirement of MI 61-101 by virtue of the exemption contained in Section 5.7(a) of MI 61-101, as the fair market value of the Debentures does not exceed 25% of the Company’s market capitalization. A material change report was not filed by the Company 21 days before the closing of the Financing because the Company did not know the date on which the Financing would close. The Company moved to close the Financing immediately upon satisfaction of all applicable closing conditions. In the view of the Company, this was reasonable in the circumstances because the Company wished to complete the Financing as soon as practicable.
ABcann holds production and sales licenses from Health Canada. Its flagship facility in Napanee, Ontario contains proprietary plant-growing technology, centred on its specially designed, environmentally-controlled growing chambers. This approach results in the production of pharmaceutical-grade cannabis products.
The Company is expanding its cultivation capacity and pursuing partnership and product development opportunities domestically, as well as in select international markets, such as Germany, Australia and Israel.
ON BEHALF OF THE BOARD OF DIRECTORS
CEO and Director
For further information, please contact:
— Barry Fishman (CEO and Director) at firstname.lastname@example.org
— Aaron Keay (Director) at email@example.com or
— Michael Bumby (CFO) at firstname.lastname@example.org
Neither 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.
Disclaimer for Forward-Looking Information
Certain statements in this news release are forward-looking statements, which are statements that are not purely historical, regarding the beliefs, plans, expectations or intentions of ABcann and its management regarding the future. Forward looking statements in this news release include statements relating to the proposed use of proceeds of the Financing and ABcann’s future plans with respect to cultivation, distribution and imports into Germany, Australia and other international jurisdictions. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the forward-looking statements, including that the proceeds of the Financing may not be allocated as currently contemplated, and other factors beyond the Company’s control. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Readers are urged to consider these factors, and the more extensive risk factors included in the Company’s filing statement dated March 31, 2017, which is available on SEDAR, carefully in evaluating the forward-looking statements, and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements in this news release are made as of the date hereof and the Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.
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