Canada House Wellness Group Inc. has closed the strategic investment transaction with Archerwill Investments Inc.
Transaction Highlights
- Archerwill invested $6,500,000 in the form of a secured convertible debenture (the “Convertible Debenture“) to obtain a 15.9% ownership interest in Canada House, assuming conversion of the full principal amount;
- Prior to the Transaction, Archerwill beneficially owned or had control or direction over 3,122,000 common shares in the capital of Canada House (“Common Shares“) and 4,973,635 securities of Canada House convertible into or exercisable for 4,973,635 Common Shares;
- Archerwill concurrently received Common Share purchase warrants (“Warrants“), exercisable at $0.06 per share for a period of 4 years, which, if exercised in full, would subsequently increase Archerwill’s ownership interest to 28.3% (assuming Archerwill’s conversion and exercise in full of all securities it holds in Canada House but no other conversions of outstanding securities of Canada House);
- Canada House and Archerwill entered into an investor rights agreement which provides Archerwill with a right to match certain acquisition proposals received by Canada House, pre-emptive rights allowing it to participate alongside common shareholders in future financings in order to maintain its ownership percentage moving forward, as well as certain other governance rights in respect of Canada House; and
- Archerwill will be entitled to nominate two directors for appointment to the board of directors of Canada House at its next shareholder meeting and for so long as Archerwill meets certain specified beneficial ownership thresholds of the Company’s then issued and outstanding Common Shares or not less than $1,000,000 of obligations under the Convertible Debenture remain outstanding.
Please refer to the Company’s press release of July 15, 2020 and Archerwill’s Early Warning News Release dated August 5, 2020 for additional details on the Transaction and the terms and conditions of the Convertible Debenture and Warrants issuable to Archerwill.
A portion of the proceeds to Canada House from the Transaction have been used to repay the entire amount owing to Lind Global Macro Fund, LP pursuant to the convertible security funding agreement dated September 10, 2019 between Canada House and Lind Global Macro Fund, LP. The remaining proceeds are expected to be used to retire certain existing obligations of Canada House and for general working capital and expansion purposes.
“We are thrilled to welcome Irvine and Kevin Weitzman to our organization,” commented Canada House CEO Chris Churchill-Smith. “The closing of this transformative financing significantly improves Canada House’s financial position by strengthening both the balance sheet and the cash flow profile of our company while bringing in partners with vast and successful experience in the Consumer-Packaged Goods space. We look forward to working closely alongside Irvine and Kevin during this important phase of Canada House’s corporate development as we continue to prove out high value distribution channels to the medical and provincial markets.”
The Company is also pleased to announce its annual general and special meeting of shareholders which will be held on September 30, 2020. In addition to presenting financial statements, electing directors, and appointing auditors, the Company will be seeking approval to move its registered office to Montreal, Quebec.
Canada House Wellness Group Inc. is the parent company of Abba Medix Corp., a Licensed Producer in Pickering, Ontario that produces high quality medical grade cannabis; IsoCanMed Inc., a Licensed Producer in Louiseville, Quebec growing best-in-class indoor cannabis
