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TerrAscend Announces Private Placements to Raise US$25 Million

Published: 10/02/2019

Team: Sean Maniaci, Jamie Litchen, Jonathan Sherman, Kyle Simpson, James Lyle, James G. Morand

On October 2, 2019, TerrAscend Corp. announced non-brokered private placement offerings to raise approximately US$25 million through the issuance of units of each of TerrAscend (the “Enterprise Offering”) and TerrAscend Canada Inc. (the “Canadian Offering”). Each unit in the Enterprise Offering is comprised of one unsecured convertible debenture of TerrAscend and 25.2 common share purchase warrants of TerrAscend. Each unit in the Canadian Offering is comprised of one unsecured convertible debenture of TerrAscend Canada Inc. and 25.2 common share purchase warrants of TerrAscend.

The convertible debentures issued pursuant to the Enterprise Offering and the Canadian Offering have a maturity date of five years from the date of issue and bear interest from the date of issue at 6% per annum. The debentures are convertible into common shares of TerrAscend (or in the case of the Canadian Offering, into exchangeable shares of TerrAscend) at a conversion price of $5.95. TerrAscend may force the holders of the convertible debentures to convert into common shares of TerrAscend (or in the case of the Canadian Offering, into exchangeable shares of TerrAscend) if, following the date that is four months and one day following the date of issue, the five-trading day volume weighted-average price of the common shares of TerrAscend equals or exceeds $10.82.

The common share purchase warrants issued by TerrAscend have an exercise price of $6.49 and, in connection with the Canadian Offering, are only exercisable following the satisfaction of certain conditions, including the federal legalization of cannabis in the US.

TerrAscend intends to use the proceeds from the Enterprise Offering to fund various growth initiatives, capital expenditures, working capital and general corporate purposes, provided that none of the proceeds of the Canadian Offering may be used in connection with any cannabis or cannabis-related operations in the US. An initial tranche of US$10 million closed on October 2, 2019 and additional tranches are expected to close by mid-October 2019.

Cassels Brock is acting for TerrAscend with a deal team that includes Sean Maniaci, Jamie Litchen, Jonathan Sherman, Kyle Simpson and James Lyle (Securities and Cannabis) and James Morand (Tax).