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Emblem Corp
Symbol C : EMC
Shares Issued 90,228,004
Close 2018-02-01 C$ 1.66
Recent Sedar Documents

Emblem closes $53.75-million bought deal

2018-02-02 12:20 ET - News Release

Mr. Ali Mahdavi reports

EMBLEM COMPLETES BOUGHT DEAL FINANCING

Emblem Corp. has closed its previously announced bought deal short form prospectus offering, including the exercise in full of the underwriters' (as defined herein) overallotment option. In connection with the offering, the company issued 14,024,391 units of the company and 25,000 8 per cent convertible unsecured debentures of the company due in 2021. The units were sold at a price per unit of $2.05 for gross proceeds of $28,750,001.55 and the convertible debentures were sold at a price per convertible debenture of $1,000 for gross proceeds of $25-million for total aggregate gross proceeds of $53,750,001.55. The offering was underwritten by a syndicate of underwriters led by Eight Capital and included Canaccord Genuity Corp., Echelon Wealth Partners Inc. and GMP Securities LP.

Each unit consists of one common share in the capital of the company and one common share purchase warrant. Each warrant will entitle the holder thereof to acquire, subject to adjustment in certain circumstances, one additional common share at an exercise price of $2.70 per common share until Feb. 2, 2020.

The convertible debentures will bear interest at an annual rate of 8 per cent payable in arrears in equal instalments semi-annually. The maturity date of the convertible debentures will be Feb. 2, 2021. Each convertible debenture will be convertible at the holder's option into common shares at any time prior to the close of business on the business day immediately preceding the maturity date at a conversion price of $2.30 per conversion share, subject to adjustment in certain events as described in a debenture indenture dated as of Feb. 2, 2018, entered into between the company and Computershare Trust Company of Canada. Pursuant to the terms of the indenture, the company may require the conversion of all of the principal amount of the then outstanding convertible debentures at the conversion price on not less than 30 days of notice should the daily volume-weighted average trading price of the outstanding common shares on the TSX Venture Exchange be greater than $3.45 for any 10 consecutive trading days.

The net proceeds of the offering will be partially used to finance the currently unfinanced portion of the planning, design, development, construction and implementation (including the purchase of certain designated capital equipment) of the company's new facility, which is expected to comprise up to approximately 135,000 square feet of greenhouse space and 35,000 square feet of infrastructure space. The remaining net proceeds of the offering will be used to finance pharmaceutical formulation development, including research and trials, and for general working capital purposes, which may include establishing new international distribution channels in jurisdictions where there is a federal legal framework for medical cannabis and the associated costs of compliance with applicable regulatory requirements. For additional details regarding the use of proceeds of the offering, please see the company's short form prospectus dated Jan. 29, 2018, which is available under the company's profile at SEDAR.

The company also announces that holders of $15-million of the company's previously issued convertible debentures due Nov. 16, 2020, converted their debentures into common shares at the stated conversion price of $1.95 per common share. In connection with the conversion, Emblem issued 7,692,307 common shares to the debentureholders.

Upon completion of the offering the company will have a cash and cash equivalents balance of approximately $87-million.

About Emblem Corp.

Emblem is a fully integrated licensed producer and distributor of medical cannabis and cannabis derivatives in Canada under the ACMPR (Access to Cannabis for Medical Purposes Regulations). Led by a team of cannabis experts and former health care and pharma executives, it has three distinct verticals -- cannabis production, patient education centres and pharmaceutical dosage form development.

We seek Safe Harbor.

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