Last October, global cannabis company TerrAscend, with licenses in the US, Canada and Europe, announced a loan deal with Canopy Rivers Corporation. However, that agreement is now in need of change. In this deal, TerrAscend will be receiving $10 million from Canopy Rivers, which, in exchange, will provide 13,243 units with some additional warrants. Based on the discussion held between the Toronto Stock Exchange and both companies, certain terms of the loan were updated.
In the original terms, those 13,243 units consisted of one secure convertible obligation with a principal amount of $755 and 25.2 common share purchase warrants with an exercise price of $6.49. But now, the terms have been amended, and the total loan amount was set at $10,008,132 that TerrAscend Canada now owes to Canopy Rivers. Under this agreement, a 6% interest will be accrued each year and all the interest will be paid in cash back to Canopy Rivers. The principal amount maturation date was set as October 2, 2024, with the option of paying off the loan before time.
Besides that, TerrAscend is giving a warrant to Canopy Rivers in the form of a total of 2,225,714 common share purchase warrant. This can be redeemed if and only if certain events occur. These events include the federal laws in the US changing to remove the ban on cannabis for cultivation, distribution and possession and that the stock exchanges in which Canopy Rivers participates allow investment in a company dedicated to cannabis production. These warrants come with a $4.50 price each and the same maturation date as the loan terms were established. In the event TerrAscend’s price goes through the roof and reach over $10.82 per unit, there will be additional rights that it can excise. All those conditions and warrants remain issued and outstanding.