TerrAscend Corp. TRSSF TER announced its intention to complete two concurrent private placements for total gross proceeds of approximately $15 million. The company has received indicative orders of approximately $15 million. The private placements consist of an offering of units of the company (the “equity offering”) of approximately $7.5 million and a non-brokered offering of senior unsecured convertible debentures of approximately $7.5 million (the “debenture offering”). The net proceeds from the private placements will be used to qualify for the company’s proposed TSX listing, to fund Maryland dispensary acquisitions, and for working capital and general corporate purposes. The first closing is expected to occur on June 22, 2023.
Equity Offering
An aggregate of 5 million units are being issued in the proposed equity offering at a price of $1.50 per unit for aggregate gross proceeds of approximately $7.5 million. Each unit is comprised of one common share of the company and one-half of one common share purchase warrant. The issue price is equal to a 7.4% discount to the closing price of the common shares on the Canadian Securities Exchange on June 14, 2023. Each warrant will entitle the holder to acquire one common share from the company at a price of $1.95 per common share for a period of 24 months following the closing of the equity offering.
Debenture Offering
The company is offering approximately $7.5 million of debentures in the principal amount of $1,000 per debenture. Unless earlier repaid or converted, the outstanding principal and accrued and unpaid interest on the debentures will be due and payable 36 months following the closing of the debenture offering. Each debenture will bear interest at a rate of 9.9% per annum from the date of issuance, calculated and compounded semi-annually, and payable on the maturity date. Each holder may, at the option of the holder upon signing of the subscription agreement, elect to receive up to 4.95% per annum of such interest payable in cash on a semi-annual basis.
Each debenture will be convertible into common shares, at the option of the holder, at any time or times prior to the close of business on the last business day immediately preceding the maturity date, at a conversion price of $2.01, representing a 25% premium to the 3 day volume weighted average trading price of the common shares on the CSE on June 14, 2023. Holders converting their debentures will receive accrued and unpaid interest for the period from and including the date of the last interest payment date, to and including, the date of conversion.
Photo by Giorgio Trovato on Unsplash
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