/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
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VANCOUVER, March 27, 2019 /CNW/ - Zenabis Global Inc
(TSXV:ZENA) ("Zenabis" or the "Company") is pleased
to announce that it has closed its previously announced bought deal
private placement of 15,000 unsecured convertible debentures (the
"Convertible Debentures") of the Company, at a price of
$1,000 per Convertible Debenture (the
"Issue Price") for gross proceeds of $15,000,000 (the "Offering"). Eight
Capital ("Eight Capital") acted as underwriter of the
Offering.
The Company intends to use the net proceeds of the Offering to
fund the cost of conversion of its facilities to cannabis
production and for working capital.
The Convertible Debentures have a maturity date of September 27, 2021, being 30 months from the date
of issue (the "Maturity Date") and bear interest from the
date of issue at 6.0% per annum, payable semi-annually on
June 30 and December 31 of each year. The Convertible
Debentures are be convertible, at the option of the holder, into
common shares of the Company ("Common Shares") at any time
prior to the close of business on the last business day immediately
preceding the Maturity Date. The Convertible Debentures have a
conversion price of $3.62 per Common
Share (the "Conversion Price"). The purchaser of the
Convertible Debentures also received, for no additional
consideration, 55 warrants of the Company for every Convertible
Debenture purchased (the "Warrants"). Each Warrant is
exercisable to purchase one Common Share at an exercise price of
$3.62 per share, for a period of 30
months from the date of issue.
The Company may force the conversion of all of the principal
amount of the then outstanding Convertible Debentures at the
applicable Conversion Price at any time after the date that is four
months and one day following the date of issue of the
Convertible Debentures, provided that the Company gives 30 days'
notice of such conversion, which notice may be given at any time
after the daily volume weighted average trading price of the Common
Shares is greater than a 40% premium to the Conversion Price for
any 10 consecutive trading days.
The Convertible Debentures, the Warrants and the Common Shares
underlying both, are subject to a statutory hold period which
expires on July 28, 2019, being four
months and one day following the date of issue of the Convertible
Debentures.
As consideration for its services in connection with the
Offering, Eight Capital received a cash commission equal to 8.0% of
the gross proceeds of the Offering.
In addition, the Company has also entered into an Investment
Agreement with three institutional investors (the
"Subscribers"), and an Agency Agreement with Eight Capital,
pursuant to which Eight Capital has agreed to offer for sale, and
the Subscribers have agreed to purchase, an additional 60,000
convertible debentures (the "Additional Debentures") at the
Issue Price, for additional gross proceeds of $60,000,000 (the "Additional Offering").
The Additional Debentures will be issuable in four tranches of
$15,000,000, at the option of the
Company. Each tranche of Additional Debentures shall have a
conversion price equal to a fifteen percent premium to the
volume-weighted average price of the Common Shares on the TSX
Venture Exchange during the 5 trading-day period immediately
preceding the issuance of each tranche of Additional Debentures
(the "Additional Debenture Conversion Price"). Each tranche
of Additional Debentures will be issuable beginning on the
30th day following the closing of the most recently
issued tranche of Additional Debentures, provided, however, that
the Company may decline, in its sole discretion, to issue any
Additional Debentures. Purchasers of Additional Debentures will
receive, for no additional consideration, that number of warrants
that is equal to 20% of the number of Common Shares that an
Additional Debenture shall be convertible into (based on the
applicable Additional Debenture Conversion Price), at an exercise
price that is equal to a fifteen percent premium to the applicable
Additional Debenture Conversion Price. As consideration for
its services in connection with the Additional Offering, Eight
Capital will receive a cash commission equal to 8.0% of the gross
proceeds of the Additional Offering.
About Zenabis
Zenabis is a significant licensed cannabis cultivator of medical
and recreational cannabis, and employs staff coast-to-coast, across
facilities in Atholville, New
Brunswick; Delta and
Langley, B.C.; and Stellarton, Nova Scotia. In addition to
gaining technologically advanced knowledge of plant propagation,
the recent addition of state-of-the-art greenhouses in Langley provides Zenabis with 3.5 million
square feet of facility space that can, upon full conversion, be
dedicated to cannabis production.
If all facility space is fully built out and dedicated to
production, Zenabis will own, and have access to, 660,000 square
feet of high quality indoor cannabis production space, as well as
2.1 million square feet of greenhouse space at its Langley facility (an additional 700,000 square
feet of greenhouse space will be used to continue the existing
propagation business, to be converted at such a time that is
beneficial to the strategic position of the company), strategically
positioned on Canada's coasts.
These facilities, if fully converted for cannabis production, would
have the design capacity to yield approximately 479,300 kg of dried
cannabis annually, for both national and international market
distribution. The Zenabis brand name is used among the medical
market, while Namaste is used to service the adult-use recreational
market.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Forward Looking Information
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Zenabis, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking statements
relate, among other things, to: completion of any Additional
Offering, the use of the proceeds of the Offering or any Additional
Offering, and the design capacity, conversion, expansion and
optimization of our facilities. Forward-looking statements should
not be read as guarantees of future performance or results, and
will not necessarily be accurate indications of whether, or the
times at or by which, such future performance will be achieved. No
assurance can be given that any events anticipated by the
forward-looking information will transpire or occur.
Forward-looking information is based on information available at
the time and/or management's good-faith belief with respect to
future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond Zenabis' control. These risks, uncertainties and
assumptions include, but are not limited to, those described
Zenabis Management Information Circular dated November 23, 2018, a copy of which is available
on SEDAR at www.sedar.com and could cause actual events or results
to differ materially from those projected in any forward-looking
statements. Furthermore, any forward-looking information with
respect to available space for cannabis production is subject to
the qualification that management of Zenabis may decide not to use
all available space for cannabis production, and the assumptions
that any construction or conversion would not be cost prohibitive,
required permits will be obtained and the labour, materials and
equipment necessary to complete such construction or conversion
will be available. Accordingly, readers should not place undue
reliance on the forward-looking statements and information
contained in this news release. Zenabis does not intend, nor
undertake any obligation, to update or revise any forward-looking
information contained in this news release to reflect subsequent
information, events or circumstances or otherwise, except if
required by applicable laws.
For more information, visit: https://www.zenabis.com.
SOURCE Zenabis Global Inc.