TORONTO, Aug. 24, 2017 (GLOBE NEWSWIRE) -- TerrAscend Corp. (CSE:TER) (“TerrAscend” or the
“Company”), is pleased to announce that it has agreed to place (the “Convertible Debenture Placement”) a CAD$7,000,000 aggregate
principal amount, 6.0% senior secured convertible debenture of the Company (the “Debenture”) with the Investor (as defined
below). The Debenture will be placed on a brokered private placement basis at a price of CAD$1,000 per CAD $1,000 of
principal.
TerrAscend has engaged PI Financial Corp. and GMP Securities L.P. (collectively, the “Lead Agents”) to act as
co-Lead Agents for the Convertible Debenture Placement, for and on behalf of a syndicate of dealers consisting of the Lead Agents,
each making up 40% of the syndicate, and XIB Asset Management Inc., making up 20% of the syndicate. PI Financial Corp. will act as
the sole bookrunner for the Convertible Debenture Placement.
“The additional capital provides us the financial security to build a state of the art drug preparation facility
under the banner of Solace Rx Inc. ('SolaceRx'), as well as ensuring Terra Health Network becomes the preeminent patient navigation
service in the industry,” noted TerrAscend’s Founder & CEO, Basem Hanna. “We are confident that with the additional funds, we have
sufficient capital to execute on all aspects of our business plan, including drug formulation, patient navigation, cannabis
cultivation and distribution. TerrAscend has the team, facility, and capital to become a leader in the cannabis space.”
The Debenture is set to mature 48 months following the Closing (as defined below) (the “Maturity Date”) and will
bear interest at a rate of 6.0% per annum, from the date of issue, payable in cash semi-annually in arrears on September 30 and
March 31 of each year commencing on March 31, 2018. Any unpaid interest will accrue and be added to the principal amount of the
Debenture. The Debenture, including the common shares of the Company (the “Common Shares”) issuable upon conversion, will be
subject to a four-month hold period from the date of Closing and subject to all necessary regulatory approvals, including the
approval of the Canadian Securities Exchange.
The Debenture will be convertible at the Investor’s option into fully-paid Common Shares at any time prior to
the earlier of the Maturity Date and the business day immediately preceding the date fixed for redemption at a conversion price
equal to CAD$1.20 per Conversion Share (the “Conversion Price”). Upon conversion, the Investor will receive accrued and unpaid
interest on the principal amount that is the subject of the conversion for the period from and including the date of the latest
interest payment date to, but excluding, the date of conversion. The Conversion Price shall be subject to standard anti-dilutive
provisions. The Investor must consent to TerrAscend raising any additional equity in excess of $5 million, unless the issue price
of the Common Shares or the exercise or conversion price of securities convertible into Common Shares is not more than a 10%
discount to the Conversion Price, in which case no consent of the Investor shall be required. If, after the date that is four
months and a day after the date of Closing but prior to the Maturity Date, (i) the volume-weighted average price (“VWAP”) of the
Company’s Common Shares on the TSXV, CSE or other principal recognized stock exchange equals or exceeds 142% of the Conversion
Price for 10 consecutive trading days (the “VWAP Days” and each a “VWAP Day”), and (ii) the volume traded during each VWAP Day is
not less than 50,000 Common Shares, the Company may force conversion of all but not less than all of the principal amount of the
Debenture at the Conversion Price in accordance with the terms of the Debenture.
The closing of the Convertible Debenture Placement is expected to occur on or about September 8, 2017 (the
“Closing”) and is subject to the satisfaction of customary closing conditions including, but not limited to, the receipt of all
necessary approvals, including the approval of the Canadian Securities Exchange, and the completion of the conversion of the
Existing Debenture (as defined below).
The Company intends to use the net proceeds of the offering to fund construction of SolaceRx, capital
expenditure initiatives at TerrAscend’s Mississauga location, further development of Terra Health Network, and for general working
capital purposes.
In addition to the foregoing, MMCAP International Inc. SPC (the “Investor”) has provided the Company with an
irrevocable notice of conversion of the remaining aggregate principal amount of the senior secured convertible debenture that was
originally issued on January 31, 2017 (the “Existing Debenture”). Pursuant to the conversion notice, it is expected that the
aggregate principal amount remaining under the Existing Debenture will convert into Common Shares on or about September 1, 2017.
Upon conversion of the Existing Debenture, the Investor will exercise direction and control over 12,879,338 Common Shares
representing 27.9% of the issued and outstanding Common Shares on a fully diluted basis. It is expected that, immediately after the
Closing of the new Convertible Debenture Placement, the Investor will exercise direction and control over 18,712,671 Common Shares
representing 36% of the issued and outstanding Common Shares on a fully diluted basis.
The Convertible Debenture Placement is a related party transaction under Multilateral Instrument 61-101
Protection of Minority Security Holders in Special Transactions (“MI 61-101”), since immediately prior to the Closing the
Investor will exercise direction and control over approximately 27.9% of the Common Shares. The board of directors of the
Company adopted a resolution authorizing the Convertible Debenture Placement on August 18, 2017. There have been no prior
valuations of the Company within the last 24 months that are required to be disclosed in accordance with section 6.8 of MI
61-101. The fair market value of the Convertible Debenture Placement will not exceed 25% of the Company’s market
capitalization calculated in accordance with the exemptions set out in MI 61-101. The Company will file a material change
report in connection with the Convertible Debenture Placement less than 21 days in advance of the expected Closing, which the
Company deems reasonable and necessary in the circumstances as the Company wishes to complete the Convertible Debenture Placement
in an expeditious manner and to use the funds for the reasons set forth above.
The Canadian Securities Exchange has not reviewed this news release and does not accept responsibility for its adequacy or
accuracy.
About TerrAscend
TerrAscend is a vertically-integrated Canadian cannabis company that strives to create and deliver quality products and services
that meet the evolving needs of the cannabis market. The Company provides support to patients through its wholly-owned
subsidiaries, Solace Health Inc. (“Solace Health”), a licensed producer of medical cannabis under the Access to Cannabis
for Medical Purposes Regulations, Terra Health Network Inc. (“Terra Health”), a clinical support program and education
platform led by health care professionals, and Solace Rx Inc. (“SolaceRx”), a drug preparation premises for non-cannabis
formulations. Please visit www.TerrAscend.com for more information about the Company.
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 include, but are not limited to, the anticipated timing for closing of the Convertible Debenture Placement.
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 Company 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.
For more information: Ari Unterman Investor Relations 1-855-TERRA-95 x100 aunterman@terrascend.com
