Cannabis Wheaton Income announces $50M offering




pcNewsWireCannabis Wheaton Income Corp. (TSX-V: CBW) has engaged a syndicate of agents co-led by Eight Capital and Canaccord Genuity Corp. for a best efforts private placement of Special Warrants and Convertible Debenture Units for gross proceeds of up to $50,000,000.

Proceeds will primarily be used for general corporate purposes, including but not limited to, the financing of the company’s streaming partners pursuant to certain of the company’s streaming agreements, and for general and administrative expenses.

News Release

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION TO UNITED STATES

CANNABIS WHEATON ANNOUNCES PRIVATE PLACEMENT OF SPECIAL WARRANTS AND CONVERTIBLE DEBENTURE UNITS

Vancouver, British Columbia, May 23, 2017 – Cannabis Wheaton Income Corp. (TSX.V – CBW) (“Cannabis Wheaton” or the “Company”) is pleased to announce that it has engaged a syndicate of agents co-led by Eight Capital and Canaccord Genuity Corp. (the “Co-Lead Agents” and together with the remaining syndicate members, the “Agents”) to sell, on a best efforts, private placement basis, Special Warrants and Convertible Debenture Units (as described below) of the Company, for gross proceeds of up to $50,000,000 (the “Offering”).

The Company has agreed to grant the Agents an over-allotment option to offer up to that number of additional Special Warrants and/or Convertible Debenture Units as is equal to 15% of the number sold in the Offering, on the same terms and conditions as the Offering, increasing the size of the Offering to a maximum of $57,500,000 in aggregate gross proceeds. The over-allotment option may be exercised in whole or in part on or before 48 hours prior to the closing of the Offering, which is expected to occur on or about June 21, 2017 (the “Closing Date”).

The net proceeds from the Offering will primarily be used for general corporate purposes, including but not limited to, the financing of the Company’s streaming partners pursuant to certain of the Company’s streaming agreements, and for general and administrative expenses.

The Offering will consist of “Special Warrants” and “Convertible Debenture Units” as follows.

Special Warrants

Each Special Warrant will be offered at a price of $1.15 per Special Warrant for gross proceeds of up to $25,000,000 (the “Special Warrant Offering”). Each Special Warrant will be automatically exercised (without any further action by the holder or payment of any further consideration and subject to customary anti-dilution adjustments) into one Unit (as defined below) of the Company on the date (the “Automatic Exercise Date”) that is the earlier of: (i) the date that is three business days following the date on which the Company obtains a receipt from the applicable Canadian securities regulatory authorities (the “Securities Commissions”) for a (final) short form prospectus qualifying the distribution of the Units issuable upon exercise of the Special Warrants (the “Qualifying Prospectus”), and (ii) the date that is four months and one day after the Closing Date. Each Unit will consist of one common share (each a “Common Share”) and one common share purchase warrant of the Company (a “Warrant”). Each Warrant will (subject to acceleration and customary anti-dilution adjustments) entitle the holder thereof to purchase one Common Share, at any time on or prior to the date that is 24 months following the Closing Date, at an exercise price of $1.60 per share. The Company will use its commercially reasonable efforts to obtain a receipt from the Securities Commissions for the Qualifying Prospectus before the date that is four months and one day following the Closing Date; provided, however, that there is no assurance that a Qualifying Prospectus will be filed or that a receipt therefor will be issued by the Securities Commissions prior to the expiry of the statutory four month hold period.

Convertible Debenture Units

Each Convertible Debenture Unit will be offered at a price of $1,000 per Convertible Debenture Unit for gross proceeds of up to $25,000,000. Each Convertible Debenture Unit will consist of $1,000 principal amount of 6% senior unsecured convertible debentures (the “Convertible Debentures”) and 435 Common Share purchase warrants (the “CD Warrants”) of the Company. Each CD Warrant (subject to acceleration and customary anti-dilution adjustments) will be exercisable to acquire one Common Share at an exercise price of $1.60 per share for a period of 24 months following the Closing Date. Subject to the Company filing a Qualifying Prospectus (as described above), the Convertible Debentures, the CD Warrants and the Common Shares will be subject to the statutory four month hold period.

The Convertible Debentures will bear interest from the Closing Date at 6.0% per annum, calculated semi-annually in arrears on June 30 and December 31 of each year. The first interest payment will be made on June 30, 2018 and will consist of interest accrued from and including the Closing Date to June 30, 2018. The Convertible Debentures will mature on the date that is 24 months from the Closing Date (the “Maturity Date”).

The Convertible Debentures will be convertible into Common Shares at the option of the holder at any time prior to the close of business on the last business day immediately preceding the Maturity Date at a conversion price of $1.15 per Common Share (the “Conversion Price”), subject to adjustment in certain events. Holders converting their Convertible Debentures will receive accrued and unpaid interest thereon for the period from and including the date of the latest interest payment date to, but excluding, the date of conversion.

Beginning on the date that is four months and one day following the Closing Date, the Company may force the conversion of the principal amount of the then outstanding Convertible Debentures at the Conversion Price on not less than 30 days’ notice should the daily volume weighted average trading price of the Company’s Common Shares be greater than $2.30 for any 10 consecutive trading days on the TSX Venture Exchange (the “TSX-V”), or such other exchange as the Common Shares may then be trading (the “Trigger Event”). In addition, upon the occurrence of the Trigger Event, the Company may also accelerate the expiry date of the Warrants and CD Warrants on not less than 30 days’ notice.

Subject to a number of customary closing conditions (including the Company completing the Special Warrant Offering), the Company is pleased to announce that MMCAP International Inc. SPC (the “Lead Subscriber”) intends to subscribe for up to $20,000,000 aggregate principal amount of the Convertible Debenture Units.

Closing Conditions and Related Matters

The Offering is subject to a number of customary closing conditions, including TSX-V approval, negotiation of definitive closing documents, due diligence and the absence of a material adverse change.

As part of the Offering, directors, officers, and certain other shareholders, together representing approximately 55% of the issued and outstanding Common Shares on a fully diluted basis (prior to giving effect to the Offering), have agreed to enter into lock-up agreements in favour of the Agents restricting their ability to transfer their Common Shares and other securities of the Company convertible into Common Shares (collectively, the “Lock-Up Securities”) until the date that is 12 months following the Closing Date, provided that: (i) one-third of the Lock-Up Securities shall cease to be subject to the lock-up on the date that is 6 months and one day following the Closing Date; and (ii) a further one-third of the Lock-Up Securities shall cease to be subject to the lock-up on the date that is 9 months and one day following the Closing Date.

Representatives of the Co-Lead Agents hold an aggregate of 13,139,859 common shares and 13,139,859 common share purchase warrants of the Company, representing approximately 8.0% of the issued and outstanding common shares on a basic basis (8.5% of the outstanding common shares on a fully-diluted basis) as at the date hereof.

The Company also announces that it has filed an amended and restated annual information form containing additional disclosure relating to its updated investment strategy in the cannabis industry.

ON BEHALF OF THE BOARD
“Chuck Rifici”
Chairman & CEO

About Cannabis Wheaton Income Corp. (TSX.V: CBW)

Backed by a team of industry experts, Cannabis Wheaton is the first cannabis streaming company in the world. Our streams will include production from across Canada coming from our partners comprised of licensed producers of cannabis (LP) and LP applicants. Cannabis Wheaton’s mandate is to facilitate real growth for our streaming partners by providing them with financial support and sharing our collective industry experience.

Stay Connected

For more information about Cannabis Wheaton and our management team, please visit: http://www.cannabiswheaton.com, or follow us on Twitter @CannabisWheaton. Call: 1-604 687 7130 Email: Mario@skanderbegcapital.com http://www.skanderbegcapital.com.

Media:
Natali Tofiloski
(416) 655-1070
natali@themintagency.com

Neither 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: Cannabis Wheaton Income Corp.