Hempco Food and Fiber Inc. Signs Definitive Agreement with Aurora Cannabis For Acquisition of Remaining Interest in Hempco Food and Fiber

Published: July 2, 2019

Hempco Food and Fiber Inc. announced that further to the joint news release dated April 16, 2019 with Aurora Cannabis Inc. has entered into a definitive arrangement agreement. Subject to the terms and conditions of the Arrangement Agreement, Aurora has agreed to acquire all of the issued and outstanding common shares of Hempco not already owned by it in exchange for common shares of Aurora.

Aurora currently owns 32,872,294 Hempco common shares and a convertible debenture in the face amount of $5,000,000, which may be converted at any time at Aurora’s election into Hempco common shares at a conversion price of $1.18 per conversion share. If all of the principal amount of this convertible debenture were converted Aurora would receive an additional 4,237,288 Hempco common shares.

Under the terms of the Arrangement Agreement, Aurora will, upon completion of the Transaction, issue approximately 0.08659 Aurora Shares in exchange for each Hempco Share not already owned by Aurora. The Exchange Ratio was based on relative share values of $1.04 per Hempco Share, representing a 14% premium to the share price on April 15, 2019, and $12.01 per Aurora Share, representing the volume-weighted average price per Aurora Share on the Toronto Stock Exchange for the five-trading-day period ending on April 11, 2019 – the day before the parties signed the binding letter agreement concerning the Transaction . Hempco shareholders will not receive any cash in the Transaction. In addition, each outstanding stock option to acquire Hempco Shares will, following completion of the Transaction, entitle the holder to receive, upon the exercise thereof, approximately 0.08659 Aurora Shares for each Hempco Share, at a price adjusted in accordance with the Exchange Ratio, and otherwise on the same terms and conditions as the original option or warrant.