05:05:23 EDT Mon 15 Aug 2022
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Avicanna Inc
Symbol AVCN
Shares Issued 45,858,596
Close 2022-01-28 C$ 0.47
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Avicanna closes $1.55-million private placement

2022-01-28 17:15 ET - News Release

An anonymous director reports


Avicanna Inc. has closed a non-brokered private placement of 1,626 convertible debenture units of the company at a price of $800 per unit (representing an original issue discount equal to 20 per cent), for aggregate gross proceeds of approximately $1,550,400. Each unit consists of an aggregate of $1,000 principal amount of secured subordinated convertible debentures and 545 common share purchase warrants.

The debentures will mature one year following the closing of the offering. Each debenture shall be convertible at any time following the date that is six months from the closing of the offering, at the option of the holder, into common shares in the capital of the company at a price of: (a) $1.20 per share, if converted between the period commencing six months from the closing of the offering and ending on the second business day prior to the maturity date; or (b) 85 cents per share, if converted any time after the second business day prior to the maturity date. The debentures will not bear interest prior to the maturity date, after which they will bear interest at a rate of 15 per cent per annum (based on a year of 360 days composed of 12 30-day months). Upon a change of control of the company, holders of debentures have the right to require the company to repurchase their debentures, in whole or in part, at a price equal to 105 per cent of the principal amount of the debentures then outstanding. The company shall have the right at any time and from time to time during the period commencing on the date that is six months from the closing of the offering and the maturity date to repay up to 50 per cent of the principal amount of the then-outstanding debentures. The debentures will rank pari passu in right of payment of principal with all other debentures issued under the offering and will be subordinate to the company's outstanding senior secured debt.

Each warrant is exercisable into one common share in the capital of the company at a price of $1.10 per share for a period of three years from the closing of the offering.

In connection with the offering, the company has granted to the subscribers of units a right to subscribe for and purchase additional units on substantially the same terms as the units issued pursuant to the offering if: (a) at any time it wishes to prepay the then-outstanding senior debt and desires to finance, in its sole discretion, such prepayment through the issuance of such additional units; or (b) an event of default occurs in respect of the senior debt, in each case for the purpose of raising sufficient funds to prepay or repay, as applicable, the senior debt. The issuance of additional units shall be subject in all respects to the approval of the Toronto Stock Exchange, and the terms thereof shall be substantially the same terms as the units issued pursuant to the offering, including the same maturity date as the maturity date notwithstanding the issue date thereof, subject to any increase in the exercise price of the warrants and the conversion price of the convertible debentures, in each case which will form part of any additional units to be offered, to be not less than the then minimum pricing permitted by the Toronto Stock Exchange, and any proration and corresponding reduction of the original issue discount applied to such additional units, having regard to the maturity date of the additional units.

The company intends to use the proceeds from the offering for general working capital purposes, general and administrative expenses, expenditures related to production and manufacturing, and research and clinical development.

All securities issued under the offering, including securities issuable on conversion or exercise thereof, are subject to a hold period expiring four months and one day from the date hereof.

The offering is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX.

About Avicanna Inc.

Avicanna is a Canadian commercial-stage biopharmaceutical company established in cannabinoid research, development and evidence-based products for the global consumer, as well as medical and pharmaceutical market segments. In leading global cannabinoid advancements, Avicanna conducts most of its research in Canada at its research and development headquarters in the Johnson & Johnson Innovation Centre, JLABS @ Toronto, located in the MaRS Discovery District. The company actively collaborates with leading Canadian academic and medical institutions. Avicanna has established an industry-leading scientific platform, including advanced R&D and clinical development, which has led to the commercialization of over 20 products across four main market segments:

  • Medical cannabis and wellness products: Marketed under the RHO Phyto brand, or Magisterial Preparations, these medical and wellness products are an advanced line of pharmaceutical-grade cannabis products containing varying ratios of cannabidiol (CBD) and tetrahydrocannabinol (THC). The product portfolio contains a full formulary of products, including oral, sublingual, topical and transdermal deliveries that have controlled dosing, enhanced absorption and stability studies supported by preclinical data. The advanced formulary is marketed with consumer, patient and medical community education and training. Avicanna's medical and wellness product portfolio also forms the foundation of the company's pharmaceutical pipeline with the contribution of the formulations that form the basis of the products as well as the data generated from sales and participation of the products in real world evidence studies.
  • CBD derma-cosmetic products: Marketed under the Pura H&W or Pura Earth brands, these registered, clinically tested, derma-cosmetic products include a portfolio of functional CBD topical products.
  • Pharmaceutical pipeline: Leveraging Avicanna's scientific platform, vertical integration and real-world evidence, Avicanna has created a pipeline of patent-pending drug candidates which are indication specific, and in various stages of clinical development and commercialization. These cannabinoid-based drug candidates provide solutions for unmet medical needs in the areas of dermatology, chronic pain and various neurological disorders. Avicanna's first pharmaceutical preparation (Trunerox) is in the drug registration stage in South America.
  • Cannabis raw materials, seeds and bulk formulations: Marketed under the Aureus brand, the company's raw material business has successfully completed sales to 11 countries. Aureus offers cannabis dried flower, standardized seeds, full spectrum extracts and cannabinoid distillates, isolated cannabinoids (CBD, THC, cannabigerol (CBG) and other rare cannabinoids), and bulk formulations derived from hemp and cannabis cultivars through its sustainable, economical and industrial-scale subsidiaries based in Colombia. The majority of the Aureus products are produced at Santa Marta Golden Hemp SAS (SMGH), the company's majority-owned subsidiary, which is also good agricultural and collection practices (GACP) certified and has United States Department of Agriculture (USDA) National Organic Program certification for its hemp cultivar.

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