Zenabis Raises C$20.5 Million Selling Units at C$0.13

Zenabis Announces Pricing of Public Offering of Units and Upsizing of the Offering to $20,493,704 million

VANCOUVER, BC, June 19, 2020 /CNW/ – Zenabis Global Inc. (TSX:ZENA) (“Zenabis” or the “Company”) is pleased to announce that further to the previously announced overnight marketed offering of units of Zenabis (“Units”), it has entered into an agency agreement with a syndicate of agents co-led by AltaCorp Capital Inc. and Eight Capital and including Canaccord Genuity Corp., Haywood Securities Inc. and PI Financial Corp. (collectively, the “Agents”) providing for the sale of up to 157,643,875 Units at a price of $0.13 per Unit (the “Offering Price”) for gross proceeds of up to $20,493,704 (the “Offering”). In addition, Zenabis has granted the Agents an over-allotment option (the “Over-Allotment Option”), exercisable in whole or in part, for a period of 30 days following the closing of the Offering, to purchase an additional 15% of the number of Units sold in the Offering. Each Unit consisting of a common share of the Company (each, a “Common Share”) and one common share purchase warrant (each, a “Warrant”) to purchase a Common Share at a price of $0.16 for a period of 60 months following the closing date of the Offering. If the Over-Allotment Option is exercised in full, the total gross proceeds to Zenabis will be $23,567,760.

Zenabis intends to use the net proceeds of the Offering for general working capital and corporate purposes, the partial repayment of subordinated secured notes, the partial repayment of the Company’s unsecured convertible debentures, the partial or full repayment of it’s $7,000,000 third tranche of senior secured debt (“Tranche 3”) and the payment of an extension fee on the remaining balance of Tranche 3, if applicable.

Zenabis has agreed to: (i) pay the Agents a cash commission equal to 6.0% of the gross proceeds of the Offering, including any proceeds received from the exercise of the Over-Allotment Option, at the closing of the Offering; and (ii) as additional compensation for the Agents, grant to the Agents non-transferable broker warrants (each, a “Broker Warrant”) equal to 6% of the aggregate number of Units sold under the Offering. Each Broker Warrant will entitle the holder thereof to acquire one Common Share at a price equal to the Offering Price at any time prior to 5:00 p.m. (Toronto time) on the date which is 12 months following the date of the closing of the Offering.

The Offering will be made by way of a prospectus supplement (the “Prospectus Supplement”) to the Company’s existing short form base shelf prospectus dated April 9, 2019 (the “Shelf Prospectus”). The Prospectus Supplement relating to the Offering will be filed with the securities commissions in each of the provinces of Canada other than Québec. The Offering has not been approved or disapproved by any regulatory authority, nor has any such authority passed on the accuracy or adequacy of the prospectus supplement.

The Offering is expected to close on or about Wednesday June 24th, 2020 and will be subject to customary closing conditions, including the listing of the Common Shares on the TSX. Zenabis, its directors and senior officers have agreed, subject to certain limited exceptions, not to sell any Common Shares or other securities of Zenabis for a period of 60 days from the closing of the Offering.

The Supplement and the Shelf Prospectus contain important detailed information about the Offering. A copy of the Supplement and the Shelf Prospectus can be found under the Company’s profile on SEDAR at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction.

About Zenabis

Zenabis is a significant Canadian licensed cultivator of medical and recreational cannabis, and a propagator and cultivator of floral and vegetable products. Zenabis employs staff coast-to-coast, across facilities in Atholville, New Brunswick; Aldergrove, Pitt Meadows and Langley, British Columbia; and Stellarton, Nova Scotia. Zenabis currently has 111,200 kg of licensed cannabis cultivation space across four licensed facilities. Zenabis has 3.5 million square feet of total facility space dedicated to a mix of cannabis production and cultivation and its propagation and floral business.

Zenabis expects Zenabis Stellarton and Zenabis Langley facilities to join Zenabis Atholville in steady state production in 2020. The Zenabis brand name is used in the cannabis medical market, the Namaste, Blazery, and Re-Up brand names are used in the cannabis adult-use recreational market, and the True Büch brand name is used for Zenabis’ kombucha products.

Original press release


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