TerrAscend Secures $20.5 Million in Total Proceeds from Private Placements

TORONTO –TerrAscend Corp. a cannabis operator in North America, announced the successful closing of the second tranche of private placements, resulting in total aggregate proceeds of $20.5 million.

The second tranche of the private placements involved the sale of 2,292,434 units (“Units”) of the Company at a price of $1.50 per Unit, generating gross proceeds of approximately $3.4 million. When combined with the first closing, the equity offering raised total aggregate proceeds of approximately $9.5 million. Additionally, the Company issued 100 senior unsecured convertible debentures (“Debentures”) at a price of $1,000 per Debenture, resulting in gross proceeds of $100,000. The debenture offering, in conjunction with the equity offering, raised total aggregate proceeds of $10 million. Furthermore, TerrAscend Growth Corp. sold Class A shares to a third-party investor for $1,000,000 as part of the reorganization investment. The net proceeds from the private placements will be utilized to fulfill the requirements for the Company’s proposed listing on the Toronto Stock Exchange, finance acquisitions of Maryland dispensaries, and support working capital and general corporate purposes.

Regarding the equity offering, each Unit comprises one common share of the Company and one-half of one common share purchase warrant (“Warrant”). The Warrant grants the holder the right to acquire one common share at a price of $1.95 per share within 24 months following the closing of the equity offering.

As for the debenture offering, the principal and accrued interest on the Debentures will be due and payable 36 months after the closing of the offering. The Debentures carry an interest rate of 9.9% per annum, compounded semi-annually, with interest payments due on the maturity date. Debenture holders have the option to receive up to 4.95% per annum of such interest in cash on a semi-annual basis. Additionally, each Debenture is convertible into common shares at the holder’s discretion before the maturity date, at a conversion price of $2.01 per share. Holders converting their Debentures will receive accrued and unpaid interest for the relevant period.

The completion of the reorganization investment followed approval by TerrAscend shareholders on June 22, 2023. As a result, TerrAscend now holds exchangeable shares of TerrAscend Growth, representing approximately 99.8% of the economic ownership of TerrAscend Growth on an as-converted basis. In addition to its interest in TerrAscend Growth, TerrAscend owns 95% of Cookies Retail Canada Corp., which operates the Cookies-branded retail store in Toronto, Ontario, Canada.

It is important to note that the private placement constitutes a “related party transaction” as per Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The participation of insiders, including Edward J. Schutter, Ziad Ghanem, Keith Stauffer, Jeroen De Beijer, and Jason Wild, accounted for the insider participation in the private placements. The Company has met the requirements for exemptions from the formal valuation and minority shareholder approval under MI 61-101 due to the fair market value of the insider participation being below 25% of the Company’s market capitalization.