08:07:02 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



National Access Cannabis Corp
Symbol META
Shares Issued 159,308,933
Close 2018-10-23 C$ 0.81
Market Cap C$ 129,040,236
Recent Sedar Documents

National Access arranges $35-million private placement

2018-10-23 10:36 ET - News Release

Mr. Mark Goliger reports

NATIONAL ACCESS CANNABIS CORP. ANNOUNCES FINANCING TRANSACTIONS

National Access Cannabis Corp. has entered into an agreement with a syndicate of agents led by Cormark Securities Inc., which has agreed to act as agent for, and on behalf of, the company, on a best efforts agency basis and without underwriter liability, in connection with a proposed private placement of up to $35-million in special warrants of the company, which will entitle the holders to receive 8 per cent senior secured convertible debentures of National Access Cannabis.

In addition, National Access Cannabis announced that three of Canada's top licensed producers have agreed to subscribe for an aggregate of up to $40-million in common shares of National Access Cannabis in three tranches. Pursuant to the subscription documents (as defined herein), each licensed producer has agreed to participate in the private placement for an aggregate amount of either $10-million or $15-million of common shares in two or three tranches, subject to the terms and conditions of the subscription documents, including the achievement of future retail expansion milestones.

The initial tranche of up to $15-million of common shares is expected to close on or about Oct. 26, 2018, at a price of 91 cents per common share. In order to participate in the licensed producer financing, National Access Cannabis and each licensed producer will enter into a master investment agreement and a subscription agreement committing to, among other things, the terms of the licensed producer financing described herein. National Access Cannabis may also decide to include additional leading licensed producers for up to an aggregate of $55-million. Each of the licensed producers are expected to be minority shareholders of National Access Cannabis upon closing of the licensed producer financing.

"The investment by three of Canada's leading LPs is both a validation of NAC's retail recreational and medical cannabis pharmacy partnership model, and an acknowledgment that we believe that the products produced by these organizations will be successful in the Canadian retail marketplace," commented Mark Goliger, chief executive officer of National Access Cannabis. "The proceeds of the LP financing and offering will fully finance NAC's immediate growth plan and allow it to continue to build out its network of retail locations over the next two years to establish itself as one of the largest players in both medical and recreational retail in Canada."

The offering

Each special warrant will entitle the holder to receive, subject to adjustment in certain instances and without payment of any further consideration, one debenture, each with a deemed issue price of $1,000 per debenture.

Special warrants that have not been previously exercised will be deemed exercised on behalf of, and without any required action on the part of, the holders on the earlier of: (i) the third business day after the date on which a final receipt has been issued by the securities regulatory authorities in the provinces in which the special warrants are sold for a final prospectus qualifying the debentures issuable upon exercise of the special warrants; and (ii) 4:59 p.m. ET on the date which is four months and a day following the closing date of the offering. In the event that a final receipt for the prospectus is not obtained prior to the date that is 45 days following the closing date, each special warrant shall thereafter be exercisable into 1.1 debentures (in lieu of one debenture).

The debentures will be senior secured obligations of National Access Cannabis and will bear interest at a rate of 8 per cent per year, payable semi-annually in arrears on May 31 and Nov. 30 of each year, commencing May 31, 2019. The debentures will be convertible at any time at the option of the holders into common shares at a conversion price of $1.08 per common share. The debentures will mature on Nov. 30, 2021.

National Access Cannabis has also granted the agents an option to sell up to an additional $5.25-million of special warrants, on the same terms and conditions, exercisable in whole or in part, at the agents' discretion, up to the closing of the offering.

National Access Cannabis will have the right at any time, beginning four months and one day following the closing date, to force the conversion of the principal amount of the then outstanding debentures at the conversion price on no less than 30 days of notice should the daily volume-weighted average trading price of the common shares be greater than $1.57 for any 10 consecutive trading days. Holders converting their debentures under a mandatory conversion will receive unpaid interest thereon for the period from the date of the latest interest payment date to, and including, the maturity date.

The licensed producer financing

Pursuant to the subscription documents, each licensed producer will agree to participate in the private placement for an aggregate amount of either $10-million or $15-million of common shares in two or three tranches, subject to the terms and conditions of the subscription documents.

The second tranche will occur when National Access Cannabis has been granted approval for an aggregate of 50 cannabis retail locations from the applicable regulatory authorities in the provinces of Canada, but before Oct. 26, 2019. National Access Cannabis may deliver a written notice to each of the licensed producers requiring each licensed producer to purchase and subscribe for $5-million of additional common shares at a price per common share equal to the 15-day volume-weighted average trading price of the common shares on the TSX Venture Exchange for the last 15 trading days of the calendar month immediately preceding the date of the first milestone notice, or if such trading price is lower than the maximum permitted discount for the second tranche of the licensed producer financing, the maximum permitted discount for the issuance of the common shares under TSX-V policies.

The third tranche will occur when National Access Cannabis has been granted approval for an aggregate of 100 cannabis retail locations from the applicable regulatory authorities in the provinces of Canada, but before Oct. 26, 2020. National Access Cannabis may deliver a written notice to the two of the three licensed producers requiring such licensed producers to purchase and subscribe for $5-million of additional common shares at a price per common share equal to the 15-day volume-weighted average trading price of the common shares on the TSX-V for the last 15 trading days of the calendar month immediately preceding the date of the second milestone notice, or if such trading price is lower than the maximum permitted discount for the third tranche of the licensed producer financing, the maximum permitted discount for the issuance of the common shares under TSX-V policies.

Closing and use of proceeds

The licensed producer financing is scheduled to close on or about Oct. 26, 2018, and the offering is scheduled to close on or about Nov. 13, 2018. The company intends to use the net proceeds of the combined financings to repay existing debt, store footprint expansion, strategic growth initiatives and general corporate purposes. The licensed producer financing and offering are subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX-V and any applicable security regulatory authorities.

The common shares issued in connection with the licensed producer financing and the special warrants issued pursuant to the offering will be subject to a statutory hold period of four months plus one day from the date of completion of the licensed producer financing or offering, as applicable, in accordance with applicable securities legislation.

About National Access Cannabis Corp.

National Access Cannabis is Canada's best practices leader in delivering secure, safe and responsible access to legal cannabis. Through its Canada-wide network of care centres, pharmacies, NAC Bio Inc.'s clinical research division, NewLeaf recreational cannabis retail stores and Meta Cannabis Supply Co. recreational cannabis retail stores, National Access Cannabis enables patients and the public to gain knowledge and access to Canada's network of authorized licensed producers of cannabis.

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