Aleafia Health Closes $40.25 Million Public Offering

Aleafia Health (TSX: ALEF) (OTCQX: ALEAF) (FRA: ARAH) reported to investors this morning that it has closed its previously announced public offering. The offering of convertible debenture units was done at a price of $1,000 per unit. The combined gross proceeds from the offering amounted to $40,250,000 which includes the full exercise of the over-allotment option.

The Aleafia offering was led by BMO Capital Markets, Mackie Research Capital, and Canaccord Genuity.

Public Offering:

Additional gross proceeds of $5,250,000 from the full exercise of the over-allotment option.
5,250 additional convertible debenture units were issued today by Aleafia.
Aleafia’s total combined gross proceeds from the offering were $40,250,000.
- This includes the 35,000 debenture units sold and the 5,250 additional convertible debenture units sold via the over-allotment option.

Convertible Debenture Units:

Each unit consists of one $1,000 principal amount, 8.5% interest bearing unsecured Aleafia Health convertible debenture.
Each unit also includes 680 common share purchase warrants.
- Each warrant allows the holder to purchase one common share in Aleafia Health.
  - The exercise price or the warrants is $1.55 and lasts until June 27, 2022.
Accelerated Exercise Period states that if at any time prior to the expiry date of the warrants:
- The volume weighted average trading price of Aleafia Health’s common shares trading on the TSX is greater than $3.10 for 20 consecutive trading days.
  - Aleafia may within 15 days of this happening deliver notice via press release to the warrant holders informing them that they have 30 days from this notice to exercise all warrants.
    - Unexercised warrants will automatically expire at the end of the Accelerated Exercise Period.

Source: Shutterstock

Additional Convertible Debenture Info:

The Convertible Debentures bear interest at a rate of 8.5% per year from the issue date.
- Payable semi-annually in arrears on the last day of June and December in each year.
- Mature on June 27, 2022
Each Convertible Debenture is convertible into Aleafia Health common shares for no additional cost at the option of the holder at any time prior to the earlier of:
- Close of business on the Maturity Date.
- The business day immediately before the date specified by Aleafia for the redemption of the Convertible Debentures upon a change of control at a conversion price of $1.47.

“We are excited to close this financing and strengthen our balance sheet as we solidify and accelerate the expansion of our cannabis health and wellness ecosystem, in Canada, and globally,” said Aleafia Health CEO, Geoffrey Benic. “This is a key step enabling management to execute on its business plan and to drive operational results creating value for shareholders.”

As consideration for the services provided by the investment banks, Aleafia has paid a cash commission of 6% as well as issued a combined 1,915,900 non-transferable broker warrants to the three banks. These broker warrants are exercisable into Aleafia Health common shares at $1.47 per share and expire on June 27, 2022.

Aleafia Health will use the capital raised from this offering for working capital requirements and other general corporate purposes.

Additional Information:

The Offering is subject to final acceptance of the TSX. The TSX 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 TSX on June 27, 2019 under the symbols “ALEF.DB” and “ALEF.WT”, respectively.

The Convertible Debentures and Warrants have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold in the United States, to or for the account or benefit of, persons in the United States or U.S. Persons (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and in accordance with applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Convertible Debentures or Warrants in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Investors looking for additional information on Aleafia Health are encouraged to visit the company’s website here.

Additional investor due diligence links: Aleafia IR Website & Aleafia Investor Deck

Stay up to date with all things Aleafia Health by following them on social media: Facebook, Twitter, Instagram, and LinkedIn

About Aleafia Health:

Aleafia Health is a leading, vertically integrated cannabis health and wellness company with four primary business units: Cannabis Cultivation & Products, Health & Wellness Clinics, Cannabis Education, and Consumer Experience with ecommerce, retail distribution and provincial supply agreements.

Aleafia Health owns three major cannabis product & cultivation facilities, two of which are licensed and operational including the first large-scale outdoor cultivation facility in Canada. The Company produces a diverse portfolio of commercially proven, high-margin derivative products including oils, capsules, and sprays. Aleafia Health operates the largest national network of medical cannabis clinics and education centres staffed by MDs, nurse practitioners, and educators.

Innovation is at the heart of Aleafia Health’s competitive advantage. The Company maintains a medical cannabis dataset with over 10 million data points to inform proprietary illness-specific product development and its highly differentiated education platform FoliEdge Academy. The Company is committed to creating sustainable shareholder value and has been named the 2019 top performing company of the year by the TSX Venture Exchange, prior to graduation to the TSX.

Read the full Aleafia press release