Hydropothecary Closes Offering of Convertible Debenture Units for $69 Million
GATINEAU, QC --(Marketwired - November 24, 2017) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED
STATES.
The Hydropothecary Corporation ("THCX" or the "Company") (TSX VENTURE: THCX) is
pleased to announce it has closed its previously disclosed bought deal public offering (the
"Offering") of convertible debenture units of the Company (the "Units") for aggregate gross proceeds
of $69 million. The Offering was underwritten by a syndicate of underwriters led by Canaccord
Genuity Corp. and including Beacon Securities Limited, Cormark Securities Inc., Echelon Wealth Partners
Inc., Eight Capital and PI Financial Corp. (collectively, the "Underwriters").
Under the Offering, the Company issued 69,000 Units at a price of $1,000 per Unit,
including 9,000 Units issued pursuant to the exercise in full of the over-allotment option the
Company granted to the Underwriters in connection with the Offering. Each Unit consists of $1,000
principal amount of 7.0% unsecured convertible debentures of the Company (the "Convertible Debentures")
and 227 common share purchase warrants (the "Warrants") of the Company.
"With this new financing in place, and the progress of our current expansion on
track, we are positioned to become an industry-leading cannabis products company," said Sébastien
St-Louis, Co-founder and CEO. "As we move forward, our shareholders can take confidence in our
commitment to continuously lowering our production costs; to driving product innovation; and, to
producing quality products in response to customer demand," concluded Mr. St-Louis.
The Convertible Debentures bear interest from the date of closing at 7.0% per annum,
payable semiannually on June 30 and December 31 of each year and will mature on November 24,
2020. The Convertible Debentures are 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 maturity date
at a conversion price of $2.20 per share (the "Conversion Price"). The Company may force the
conversion of all of the principal amount of the then outstanding Convertible Debentures at the
Conversion Price on 30 days' written notice should the daily volume weighted average trading price
of the Common Shares be greater than $3.15 for any 10 consecutive trading days.
Each Warrant is exercisable to acquire one Common Share until November 24, 2019 at an
exercise price of $3.00 per share, subject to adjustment in certain events, and subject to the
Company's right to accelerate expiry of the Warrants if the closing trading price of the Common
Shares equals or exceeds $4.50 for any 10 consecutive trading days.
The Units were offered for sale in each of the provinces and territories of Canada by
short form prospectus, and in jurisdictions outside of Canada including the United States on a private
placement basis exempt from any prospectus, registration or other similar requirements.
The net proceeds from the Offering are expected to be used to further expand and
increase the Company's production capacity and expedite the development of the Company's innovative
product lines in preparation for eventual adult recreational use in Canada. Additional information on
the expected use of the net proceeds from the Offering is disclosed in the short form
prospectus.
The Offering is subject to final acceptance of the TSX Venture Exchange
("TSXV"). The TSXV has conditionally accepted the Offering and the listing of the
Convertible Debentures. Subject to the Company fulfilling the listing requirements of the TSXV, it is
expected that the Convertible Debentures will commence trading on the TSXV at market open on
Monday, November 27, 2017.
THCX also wishes to announce that $13.6 million principal amount of the Company's $25.1
million aggregate principal amount of 8% unsecured convertible debentures due June 30, 2019 (the
"Existing Debentures") have to date been tendered for conversion into Common Shares. The Existing
Debentures are convertible at the option of the holder into Common Shares at a conversion price
of $1.60 per share. As previously disclosed by THCX, the Company has exercised its forced
conversion right in respect of the Existing Debentures and any outstanding Existing Debentures will
be converted into Common Shares on December 27, 2017.
About The Hydropothecary
Corporation
The Hydropothecary Corporation is an authorized licensed producer and distributor of
medical cannabis licensed by Health Canada under the Access to Cannabis for Medical Purposes
Regulations (Canada). Hydropothecary provides naturally grown and rigorously tested medical cannabis of
uncompromising quality. Hydropothecary's branding, cannabis product offering, patient service standards and
product pricing are consistent with Hydropothecary's positioning as a premium brand for a legal
source for medical cannabis within this new marketplace. In addition to medical cannabis production
and sales, Hydropothecary explores various research and development opportunities for cannabinoid extracts,
drugs and combinatory chemistry. In addition, the company is investigating the development and
patenting of novel technologies related to medical cannabis, as well as the import and export of
medical cannabis.
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.