Canopy Growth Corporation and Canopy USA, LLC Announce Filing of Early Warning Report regarding TerrAscend Corp.

3.5 min readPublished On: October 25th, 2022By

SMITHS FALLS, ON, Oct. 25, 2022  Growth Corporation and Canopy USA, LLC Today announced that each of the Company and Canopy USA has filed an early warning report under National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues in connection with the Company’s direct and indirect disposition of, and Canopy USA’s direct and indirect acquisition of beneficial ownership of: (i) 38,890,570 exchangeable shares in the capital of TerrAscend Corp. (ii) an option to acquire 1,072,450 common shares in the capital of TerrAscend for an aggregate exercise price of $1.00 (ii) 2,152,733 Common Share purchase warrants with an exercise price of C$3.74 per Common Share (the “TerrAscend 1A Warrants”); (iv) 15,656,242 Warrants with an exercise price of C$5.14 per Common Share (the “TerrAscend 1B Warrants”); (v) 2,225,714 Warrants with an exercise price of C$5.95 per Common Share (the “TerrAscend 2A Warrants”); (vi) 333,723 Warrants with an exercise price of C$6.49 per Common Share (vii) 1,926,983 Warrants with an exercise price of C$15.28 per Common Share (the “TerrAscend 3A Warrants”); and 178,735 Warrants with an exercise price of C$17.19 per Common Share (the “TerrAscend 3B Warrants”, together with the TerrAscend 1A Warrants, TerrAscend 1B Warrants, the TerrAscend 2A Warrants, TerrAscend 2B Warrants and TerrAscend 3A Warrants, the “TerrAscend Warrants”).

Completion of the Reorganization resulted in a 100% decrease in Canopy Growth’s interest in the Exchangeable Shares on a non-diluted basis and an approximate 19.9% decrease in Canopy Growth’s interest in the Common Shares on a partially diluted basis, assuming the conversion of the 38,890,570 Exchangeable Shares into Common Shares and the exercise of the 22,474,130 TerrAscend Warrants and the TerrAscend Option to acquire 1,072,450 Common Shares. Immediately prior to the completion of the Reorganization, Canopy Growth owned 38,890,570 Exchangeable Shares and 22,474,130 TerrAscend Warrants and was deemed to own 1,072,450 Common Shares that are subject to the TerrAscend Option, representing 100% of the issued and outstanding Exchangeable Shares on a non-diluted basis and approximately 19.9% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of the 38,890,570 Exchangeable Shares into Common Shares and the exercise of the 22,474,130 TerrAscend Warrants and the TerrAscend Option to acquire 1,072,450 Common Shares.

Immediately following the Reorganization, Canopy USA beneficially owns, and exercises control or direction over, 38,890,570 Exchangeable Shares and 22,474,130 TerrAscend Warrants and is deemed to own 1,072,450 Common Shares that are subject to the TerrAscend Option, representing 100% of the issued and outstanding Exchangeable Shares on a non-diluted basis and approximately 19.9% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of 38,890,570 Exchangeable Shares into Common Shares and the exercise of the 22,474,130 TerrAscend Warrants and the TerrAscend Option to acquire 1,072,450 Common Shares.

Canopy USA’s beneficial ownership interest is by virtue of its control of the Canopy USA LPs. Canopy USA LP I beneficially owns, and exercises control or direction over, 2,105,718 TerrAscend Warrants, representing approximately 0.8% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of 2,105,718 TerrAscend Warrants. Canopy USA LP II beneficially owns, and exercises control or direction over, 38,890,570 Exchangeable Shares and is deemed to own 1,072,450 Common Shares that are subject to the TerrAscend Option, representing approximately 13.7% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of 38,890,570 Exchangeable Shares into Common Shares and the exercise of the TerrAscend Option. Canopy USA LP III beneficially owns, and exercises control or direction over, 20,368,412 TerrAscend Warrants, representing approximately 7.5% of the issued and outstanding Common Shares on a partially-diluted basis, assuming the conversion of 20,368,412 TerrAscend Warrants.

Canopy USA beneficially holds the TerrAscend securities for investment purposes. While Canopy USA and/or the Canopy USA LPs currently have no immediate plans or intentions with respect to the securities of TerrAscend, depending on market conditions, general economic and industry conditions, trading prices, TerrAscend’s business, financial condition and prospects and/or other relevant factors, Canopy USA and/or the Canopy USA LPs may develop such plans or intentions in the future and, at such time, may from time to time acquire additional securities, dispose of some or all of the existing or additional securities or may continue to hold the securities of TerrAscend.

(This information is primarily sourced from Canopy Growth Corporation.  Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).

 

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