Mississauga, Ontario-based cannabis company TerrAscend Corp has launched a non-brokered private placement to raise up to $40 million (US$30 million).
The offering will include a minimum lead-order investment of about $13.4 million (US$10 million) from JW Asset Management, a U.S. hedge fund manager. JW currently holds about 30 percent of TerrAscend’s issued and outstanding common shares.
TerrAscend operates several businesses active in the medical and legal adult-use cannabis markets in Canada and the United States.
The company will use the offering’s proceeds for its U.S. acquisition strategy, working capital and other priorities.
TerrAscend Announces Proposed US$20 million -US $30 million Non-Brokered Private Placement
TORONTO, April 22, 2019 /CNW/ – TerrAscend Corp. (CSE:TER) (“TerrAscend” or the “Company”) today announced that the Company intends to complete a non-brokered private placement (the “Private Placement”) to raise approximately US$20 million – US$30 million through the issuance of approximately 3.5 million to 5.2 million common shares in the capital of the Company (the “Common Shares”) at an issue price of US$5.73 per Common Share.
The Company has received an indicative lead order from funds advised by JW Asset Management, LLC (“JW”) for a minimum investment of US$10,000,000. Prior to giving effect to the Private Placement, JW directly or indirectly owns or controls approximately 35,021,529 Common Shares (as-converted from proportionate voting shares), representing approximately 30% of the issued and outstanding Common Shares on a non-diluted, fully-converted basis.
The Company intends to use the proceeds from the Private Placement to fund its United States acquisition strategy and for working capital and general corporate purposes.
The issuance of Common Shares to JW, an affiliate of Jason Wild, chairman of TerrAscend, and current insider of the Company, will be exempt from the valuation and minority shareholder approval requirements of Multilateral Instrument 61-101 (“MI 61-101”) by virtue of the exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in that JW’s proposed subscription does not exceed 25% of the Company’s market capitalization. The terms of the Private Placement were reviewed and unanimously approved by the disinterested members of the Company’s board of directors.
Subject to the satisfaction of customary closing conditions, including the approval of the Canadian Securities Exchange, the Private Placement is expected to close, in one or more tranches, by mid-May, 2019.
The securities to be issued pursuant to the private placement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “1933 Act”), or under any state securities laws, and may not be offered or sold, directly or indirectly, or delivered within the United States absent registration or an applicable exemption from the registration requirements. This news release does not constitute an offer to sell or a solicitation to buy such securities in the United States.
TerrAscend provides quality products, brands, and services to the global cannabinoid market. The Company participates in the medical and legal adult use market in Canada and in US states where cannabis has been legalized for therapeutic or adult use. TerrAscend operates a number of synergistic businesses, including Arise Bioscience Inc., a manufacturer and distributor of hemp-derived products; Ascendant Laboratories Inc., a biotechnology and licensing company committed to the continuous improvement of cannabinoid expressing plants; and Solace RX Inc., a proposed Drug Preparation Premises (DPP) focused on the development of novel formulations and delivery forms.
For further information: regarding TerrAscend: Michael Nashat , Chief Executive Officer, IR@terrascend.com; Adam Kozak, Chief Financial Officer, IR@terrascend.com, 1-855-837-7295 ext. 2