James E. Wagner Cultivation Announces Closing of the Second Tranche of its up to $7,500,000 Private Placement

Published: January 29, 2020

James E. Wagner Cultivation Announces Closing of the Second Tranche of its up to $7,500,000 Private Placement

James E. Wagner Cultivation Corporation (“JWC”) announced that on January 27, 2020, it closed the second tranche (the “Second Tranche”) of its previously announced non-brokered private placement of units (each, a “Unit”) of the Corporation (the “Offering”). Upon closing of the Second Tranche, the Corporation issued a total of 2,420,238 Units at a purchase price of $0.21 per Unit, to raise aggregate gross proceeds of $508,250.00. Each Unit is comprised of one common share of the Corporation (a “Common Share”) and one half of one common share purchase warrant (each full warrant, a “Warrant”). Each Warrant will be exercisable to purchase one Common Share at an exercise price of $0.275 per share for a period of three (3) years following the date of issuance.

Certain directors, officers and other insiders of the Corporation participated in the Second Tranche for a total of $47,250.00 worth of Units. Participation by those persons constitutes a related party transaction as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The issuance of Units to the related parties is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(a) of MI 61-101 and exempt from the minority shareholder approval requirements of Section 5.6 of MI 61-101 pursuant to Subsection 5.7(1)(a) of MI 61-101.

The Second Tranche is part of a larger offering being conducted by the Corporation for up to 35,714,285 Units to raise aggregate gross proceeds of up to $7,500,000. The Corporation intends to use the proceeds of the Offering for corporate and general working capital purposes and to further develop the Corporation’s second facility located at 530 Manitou Drive, Kitchener, Ontario.

The Offering is scheduled to close in tranches, with the third and final closing expected to take place on or about January 31, 2020. Closing of each tranche of the Offering is subject to customary closing conditions, including, without limitation, receipt of applicable regulatory approvals, including the approval of the TSX Venture Exchange.

Nathan Woodworth, President and Chief Executive Officer of JWC, said: “The current financing will allow us to strengthen our balance sheet at a critical point in the history of our industry, allowing us to move forward in confidence into the new year. It also gives us the opportunity to strengthen ties with existing investors while forming relationships with new investors.”

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