Emerald Health Therapeutics Announces Financing Transactions
Monday, December 16, 2019, 8:12 AM ET
Emerald Health Therapeutics Announces Financing Transactions
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE OR FOR DISSEMINATION IN THE UNITED STATES
VANCOUVER, British Columbia, Dec. 16, 2019 (GLOBE NEWSWIRE) -- Emerald Health Therapeutics, Inc. ("Emerald") (TSXV: EMH; OTCQX: EMHTF) announced today that it is carrying out a financing and entering into a shares for debt transaction.
Private Placement
Emerald intends to complete a non-brokered private placement (the "Private Placement"), in one or more tranches, of a minimum of 5,172,414 units of Emerald (each, a "Unit") and a maximum of 15,517,241 Units at a price of $0.29 per Unit, for gross proceeds of a minimum of $1,500,000 and a maximum of $4,500,000. Each Unit will consist of one common share of Emerald (each, a "Unit Share") and one common share purchase warrant (each, a "Warrant").
Each Warrant will entitle the holder thereof to acquire one common share of Emerald (each, a "Warrant Share") at a price of $0.385 per Warrant Share for a period of five years following the closing of the Private Placement. In the event that the closing sale price of Emerald's common shares ("Shares") on the TSX Venture Exchange, or such other principal exchange on which the Shares are then trading, is greater than $0.75 per Share for a period of ten consecutive trading days at any time after the closing of the Private Placement, Emerald may accelerate the expiry date of the Warrants by giving written notice to the holder thereof and in such case the Warrants will expire on the 15th day after the date on which such notice is given by Emerald.
Emerald Health Sciences Inc. ("Sciences"), a control person of Emerald, and certain directors and officers of Emerald have agreed, subject to certain customary conditions, to purchase an aggregate of 5,172,414 Units of the Private Placement for $1,500,000. It is anticipated that Sciences will purchase 4,687,941 Units, while directors and officers of Emerald will purchase an aggregate of 484,473 Units.
Emerald intends to use the net proceeds of the Private Placement for general working capital purposes. The Private Placement has been approved by the independent members of the board of directors of Emerald.
Shares for Debt
Emerald has also reached an agreement with Sciences (the "Debt Settlement") to settle $3,000,000 (the "Debt") of the aggregate debt owed by Emerald to Sciences pursuant to a previously disclosed loan agreement between the parties as well as other related party transactions. Pursuant to the Debt Settlement, Emerald will satisfy the Debt by issuing 10,389,611 common shares of Emerald (each, a "Debt Share") at a deemed value of $0.29 per Debt Share. The Debt Settlement has been approved by the independent members of the board of directors of Emerald, who have determined that the fair market value of the securities being issued under the Debt Settlement and the consideration therefor are reasonable.
Secondary Offering
Sciences has advised the Company that Sciences has entered into a binding term sheet (the "Term Sheet") with a single Canadian institutional investor (the "Investor") in connection with a secondary offering (the "Secondary Offering") of Shares. Pursuant to the Term Sheet, the Investor will purchase 5,785,119 Shares (the "Secondary Shares") from Sciences at a price of $0.235 per Secondary Share. Sciences will receive all of the net proceeds from the Secondary Offering.
In connection with the Secondary Offering, Emerald has agreed to file a shelf prospectus supplement qualifying the Secondary Shares for distribution in each of the provinces of Canada, in accordance with National Instrument 44-101 Short Form Prospectus Distributions and National Instrument 44-102 Shelf Distributions.