WeedMD Closes on $13 Million Private Placement

WeedMD Inc. (TSX-V: WMD) (OTCQX: WDDMF) has closed its previously-announced bought-deal short-form prospectus offering of convertible debenture units at a price of $1,000 per Convertible Debenture Unit for aggregate gross proceeds of $13,115,000, which includes proceeds from the over-allotment option. The Offering for WeedMD was led by Mackie Research Capital Corporation and included Haywood Securities Inc.

According to the company statement, the net proceeds will be used for purchasing new equipment and retrofitting the Aylmer Facility, building an outdoor processing facility at the Strathroy facility, working capital requirements, and other general corporate purposes.

Terms

The announcement stated that the underwriters were granted a 15% over-allotment option until October 25, 2019. In connection with the offering, WeedMD said that there were additional gross proceeds of $1,115,000 from the over-allotment option. An additional 1,115 Convertible Debenture Units were issued representing additional gross aggregate proceeds of $1,115,000 and the total gross proceeds from Convertible Debenture Units sold in the Offering, including the 12,000 Convertible Debenture Units sold initially and the 1,115 Additional Convertible Debenture Units sold pursuant to the over-allotment option, is $13,115,000.

Each Convertible Debenture Unit issued pursuant to the Offering consists of one $1,000 principal amount of 8.5% interest bearing unsecured convertible debenture of the Company and 625 common share purchase warrants. Each Warrant entitles the holder thereof to purchase one common share in the capital of the company at an exercise price of C$1.80 until September 25, 2022. The stock was lately trading at C$1.31 on the Toronto Exchange.

Provided that, if at any time prior to the expiry date of the Warrants, the volume-weighted average trading price of the Common Shares on the TSX Venture Exchange is greater than C$3.60 for 20 consecutive trading days, the Company may, within 10 business days of the occurrence of such event, deliver a notice (including a press release) to the holders of Warrants accelerating the expiry date of the Warrants to the date that is 30 days following the date of such notice. Any unexercised Warrants shall automatically expire at the end of the Accelerated Exercise Period.

The TSXV has conditionally accepted the Offering and the listing of the Convertible Debentures and Warrants. It is expected that the Convertible Debentures and Warrants will commence trading on the TSXV on September 27, 2019 under the symbols “WMD.DB” and “WMD.WT”, respectively.

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