Mr. Omar Khan 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 offering of units of the company, including the exercise in full of the underwriters' overallotment option. The offering was co-led by ATB Capital Markets Inc. and Echelon Wealth Partners Inc., together with Beacon Securities Ltd., Desjardins Securities Inc. and Roth Canada ULC, and Alliance Global Partners, as a United States placement subagent.
In connection with the offering, the company issued an aggregate of 2,415,000 units at a price of $9.60 per unit for aggregate gross proceeds of $23,184,000. 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 acquire one common share of the company for a period of 36 months from the closing of the offering at an exercise price of $12.25, subject to an accelerated expiry if the 10-trading-day volume-weighted average price of the common shares on the TSX Venture Exchange is equal to or greater than $19.20 per common share.
The TSX-V has conditionally approved the listing of the common shares as well as the common shares issuable upon the exercise of: (i) the warrants; (ii) the brokers' warrants; and (iii) the warrants comprising the units underlying such brokers' warrants. Listing will be subject to the company fulfilling all the listing requirements of the TSX-V.
The net proceeds of the offering will be used for: opening new retail cannabis store locations; completing strategic acquisitions; the repayment of debt; and general corporate and working capital purposes.
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 and Shimmy Posen, the chief financial officer and corporate secretary of the company, respectively, participated in the offering and acquired an aggregate of 105,000 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 obtain a formal valuation and minority shareholder approval 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 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 Inc.
High Tide is a retail-focused cannabis company enhanced by the manufacturing and distribution of consumption accessories. The company is the most-profitable Canadian retailer of recreational cannabis, as measured by adjusted EBIDTA (earnings before interest, taxes, depreciation and amortization), with 85 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, Smokecartel, FABCBD 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 Tilray Inc. and Aurora Cannabis Inc.
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