Aurora Cannabis Announces Up to $25 Million Private Placement of Convertible Debentures
Press Release: October 11, 2016 Ι 7:57 AM ET
Cash Position to Exceed $45 Million
/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES/
VANCOUVER, Oct. 11, 2016 /CNW/ - Aurora Cannabis Inc. (the "Company" or "Aurora" or the "Issuer") (TSXV: ACB) (OTCQB: ACBFF) (Frankfurt: 21P; WKN: A1C4WM) announced today that it has entered into an agreement with a syndicate of agents led by Canaccord Genuity Corp. (the "Agent") pursuant to which the Company will issue on a private placement basis up to $25 million aggregate principal amount of unsecured convertible debentures (the "Debentures") at a price of $1,000 per principal amount of Debentures (the "Offering"). Furthermore, and pursuant to the Offering, the Company will convert $10 million of pre-existing convertible debentures, bearing interest at 10% per annum, into approx. 8,695,652 additional common shares.
The Debentures will bear interest from the date of closing at 8% per annum, payable semi-annually on June 30 and December 31 of each year. The Debentures will have a maturity date of 24 months from the Closing Date of the Offering (the "Maturity Date"). Net proceeds from the Offering will be used primarily towards the Company's planned capacity expansion, and for general working capital purposes.
"This Offering, following our financings in August and September, will place Aurora in an extremely powerful financial position, with a current cash balance in excess of $45 million available to pursue all our strategic initiatives," said Terry Booth, CEO. "We are now one of the best capitalized companies, with one of the strongest balance sheets in the cannabis sector. We have a large number of initiatives underway that ensure the Aurora Standard will remain the industry benchmark in terms of product quality, production capacity, technological innovation, and overall customer experience. We will continue to execute with discipline on our business strategy, with the objective of building the most valuable cannabis company in Canada."
The Debentures will be convertible at the option of the holder into common shares of the Issuer (the "Common Shares") at any time prior to the close of business on the Maturity Date. In addition, the Debentures will be redeemable at the option of the Issuer any time after 18 months upon the Company providing 30 days' advance written notice, in accordance with the redemption terms. Subject to the approval of the TSX Venture Exchange ("TSXV"), the Debentures will be convertible into Common Shares at a conversion price of $2.00 per common share (the "Conversion Price"). Holders converting their Debentures will receive accrued and unpaid interest thereon, up to, but not excluding, the date of conversion.
If, following the closing of the Offering and prior to the Maturity Date, the VWAP of the Common Shares on the TSXV for 10 consecutive trading days equals or exceeds $3.00, the Issuer may force conversion of all of the principal amount of the Debenture at the Conversion Price, upon giving Debenture holders 30 days advance written notice, in accordance with the conversion terms.
Closing of the Offering is expected to occur on or about October 25, 2016 (the "Closing Date"). The Offering is in the form of a best efforts private placement (i) in Canada to "accredited investors" within the meaning of National Instrument 45-106 and other exempt purchasers in each province of Canada, as agreed upon by the Issuer and the Agent, (ii) in the United States only to Qualified Institutional Buyers (within the meaning of Rule 144A), and in each case in compliance with the securities laws of the applicable states of the United States, to investors that the Agent has reasonable grounds to believe and does believe are Qualified Institutional Buyers, and (iii) outside Canada and the United States on a basis which does not require the qualification or registration of any of the Debentures or the Issuer.
On behalf of the Board of Directors,
AURORA CANNABIS INC.
This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
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.
SOURCE Aurora Cannabis Inc.
For further information: Cam Battley, Senior VP, Communications and Medical Affairs, +1.905.864.5525, firstname.lastname@example.org,www.auroramj.com; Marc Lakmaaker, NATIONAL Equicom, email@example.com, +1.416.848.1397