Mr. Vahan Ajamian reports
HIGH TIDE ANNOUNCES CLOSING OF $23 MILLION BOUGHT DEAL EQUITY FINANCING, INCLUDING EXERCISE IN FULL OF OVER-ALLOTMENT OPTION
High Tide Inc. has closed its previously announced bought deal short form prospectus offering of units of the company, including the exercise in full of the underwriters' overallotment option. The offering was led by ATB Capital Markets Inc. and Echelon Wealth Partners Inc., together with Beacon Securities Ltd. and Desjardins Securities Inc.
In connection with the offering, the company issued an aggregate of 47,916,665 units at a price of 48 cents per unit for aggregate gross proceeds of $22,999,999.20. Each unit comprises one common share of the company and one-half of one common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share at an exercise price of 58 cents for a period of 36 months following the closing of the offering. The TSX Venture Exchange has conditionally approved the listing of: (i) the common shares and the warrants issued pursuant to the offering; and (ii) the common shares issuable upon the exercise of the warrants, the broker warrants issued to the underwriters and the warrants comprising the units underlying such broker warrants. Listing will be subject to the company fulfilling all of the listing requirements of the TSX-V. The company expects the warrants to commence trading on or about Feb. 23, 2021.
The company intends to use the net proceeds of the offering for opening new retail cannabis store locations, completing strategic acquisitions, general corporate and working capital purposes, and for such other purposes as described in the short form prospectus of the company dated Feb. 16, 2021, prepared and filed in connection with the offering.
Garfinkle Biderman LLP acted as legal adviser to the company in connection with the offering. Stikeman Elliott LLP acted as legal adviser to the underwriters in connection with the offering.
Related party transaction
Rahim Kanji, chief financial officer; Vahan Ajamian, vice-president, capital markets; and Shimmy Posen, corporate secretary, participated in the offering and acquired an aggregate of 3,112,084 units pursuant to the offering. The participation of the participating insiders in the offering constitutes a related party transaction, as such term is defined in Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, and would require the company to receive minority shareholder approval for, and obtain a formal valuation for the subject matter of, the transaction in accordance with MI 61-101, prior to the completion of such transaction. However, in completing the offering, the company has relied on exemptions from the formal valuation and the minority shareholder approval requirements of MI 61-101, in each case on the basis that the fair market value of the participating insiders' participation in the offering does not exceed 25 per cent of the market capitalization of the company, as determined in accordance with MI 61-101. The company did not file a material change report more than 21 days before the closing date of the offering due to the limited time between the launch date of the offering and the closing date.
About High Tide
High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of consumption accessories. The company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 70 current locations spanning Ontario, Alberta, Manitoba and Saskatchewan. High Tide's retail segment features the Canna Cabana, KushBar, Meta Cannabis Co., Meta Cannabis Supply Co. and NewLeaf Cannabis banners, with additional locations under development across the country. High Tide has been serving consumers for over a decade through its numerous consumption accessory businesses, including e-commerce platforms Grasscity and CBDcity, and its wholesale distribution division under Valiant Distribution, including licensed entertainment product manufacturer Famous Brandz. High Tide's strategy as a parent company is to extend and strengthen its integrated value chain while providing a complete customer experience and maximizing shareholder value. Key industry investors in High Tide include Aphria Inc. and Aurora Cannabis Inc.
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