TORONTO, Oct. 3, 2019 /CNW/ - Canopy Rivers Inc. (the "Company") announces that, in connection with a financing announced by TerrAscend Corp. ("TerrAscend") on October 2, 2019, its wholly owned subsidiary Canopy Rivers Corporation ("Canopy Rivers") has acquired ownership and control over (i) $13,243,000 principal amount of unsecured convertible debentures of TerrAscend Canada Inc. (the "Debentures"); and (ii) 333,723 common share purchase warrants of TerrAscend (the "Warrants").
The principal amount of the Debentures is convertible into fully paid and non-assessable common shares of TerrAscend ("Common Shares") or exchangeable shares of TerrAscend ("Exchangeable Shares") at the option of the holder or upon the occurrence of certain events at a conversion price of $5.95 per share. The Debentures mature on October 2, 2024 and bear interest at a rate of 6% per annum.
Each Warrant entitles Canopy Rivers to acquire one Common Share, at an exercise price of $6.49, and such Warrants will be exercisable following changes in U.S. federal laws regarding the cultivation, distribution or possession of marijuana, the compliance of TerrAscend with such laws, and the approval of the securities exchanges upon which the securities of the Company are listed.
The $13,243,000 aggregate principal amount of Debentures are convertible into 2,225,714 Exchangeable Shares (or Common Shares), representing an increase of approximately 11.4% in Canopy Rivers' holdings of Exchangeable Shares. The 333,723 Warrants are exercisable for 333,723 Common Shares, representing approximately 0.6% of the outstanding Common Shares, calculated on a partially diluted basis assuming the full exercise of the 333,723 Warrants held by Canopy Rivers only.
Immediately prior to the acquisition of the Debentures and the Warrants, Canopy Rivers held 19,445,285 Exchangeable Shares, representing 50% of the issued and outstanding Exchangeable Shares.
Immediately following the acquisition of the Debentures and the Warrants, Canopy Rivers held 19,445,285 Exchangeable Shares, $13,243,000 aggregate principal amount of Debentures, and 333,723 Warrants. In the event all of the principal amount of the Debentures is fully converted into Exchangeable Shares, Canopy Rivers would hold 21,670,999 Exchangeable Shares (including the 19,445,285 Exchangeable Shares currently held by Canopy Rivers). These combined holdings would represent approximately 52.7% of the issued and outstanding Exchangeable Shares, calculated on a partially diluted basis assuming the full conversion into Exchangeable Shares of the principal amount of the Debentures held by Canopy Rivers only. In the event all of the 333,723 Warrants are fully exercised, Canopy Rivers would hold 333,723 Common Shares, representing approximately 0.6% of the outstanding Common Shares, calculated on a partially diluted basis assuming the full exercise of the 333,723 Warrants held by Canopy Rivers only.
Canopy Rivers acquired the Debentures and the Warrants for investment purposes only and not with a view to materially affecting control of TerrAscend. Depending upon market conditions and other factors, and in compliance with applicable regulatory requirements, Canopy Rivers may, from time to time, acquire or dispose of additional securities of TerrAscend, in the open market, by private agreement or otherwise, or acquire interests in or enter into related financial instruments involving a security of TerrAscend.
The head office of the Company is located at 40 King Street West, Suite 2504, Toronto, Ontario M5H 3Y2. The head office of TerrAscend is located at P.O. Box 43125, Mississauga, Ontario L5B 4A7.
A copy of the early warning report filed by Canopy Rivers can be found under TerrAscend's profile on SEDAR at www.sedar.com or by contacting Canopy Rivers as set out below.
About Canopy Rivers
Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers identifies strategic counterparties seeking financial and/or operating support. Canopy Rivers has developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector. As the portfolio continues to develop, constituents will be provided with opportunities to work with Canopy Growth Corporation (TSX: WEED, NYSE: CGC) and collaborate among themselves, which Canopy Rivers believes will maximize value for its shareholders and foster an environment of innovation, synergy and value creation for the entire ecosystem.
Forward-Looking Statements
This news release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of Canopy Rivers with respect to future business activities and operating performance. Forward-looking information is often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions.
Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Canopy Rivers believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of Canopy Rivers. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: regulatory and licensing risks; the ability of Canopy Rivers to exercise the Warrants in order to acquire common shares of TerrAscend; changes in general economic, business and political conditions, including changes in the financial markets; the global regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; risks relating to anti-money laundering laws; compliance with extensive government regulation; public opinion and perception of the cannabis industry; and the risk factors set out in Canopy Rivers' annual information form dated July 15, 2019, filed with the Canadian securities regulators and available on Canopy Rivers' profile on SEDAR at www.sedar.com.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Canopy Rivers has attempted to identify important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Canopy Rivers does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
SOURCE Canopy Rivers Inc.
Media: Rob Small, Senior Manager, Public Relations & Communications, [email protected], 1-855-227-8639; Investor Relations: Karoline Hunter, Senior Director, Investor Relations & Communications, [email protected], 1-855-227-8639
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