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Home / Press Release  / Lineage Announces Closing of Final Tranches of Brokered Private Placement and Praises the CSA and CDS for Enacting Positive Positions Towards Issuers with U.S. Marijuana–related Activities

Toronto, Ontario – Lineage Grow Company Ltd. (the “Company” or “Lineage“) is pleased to announce the closing of the final tranches of its previously announced brokered private placement (the “Concurrent Financing”) of Units of the Company (the “Units”) to raise gross proceeds of up to $4,000,000 (the “Offering”) (please see the Company’s news releases dated October 31, 2017 and November 20, 2017).

 

A total of 7,389,664 Units were issued in three tranches with total gross proceeds of $1,847,416, with 3,442,065 Units ($860,516.17) issued in the second tranche on February 8, 2018, 3,047,600 Units ($761,900) issued in the third tranche on February 14, 2018 and 900,000 Units ($225,000) issued in the fourth and final tranche on February 16, 2018.  Each Unit has an issue price of $0.25 and consists of one (1) common share in the capital of the Company (“Common Share”) and one (1) common share purchase warrant (“Warrant”). Each Warrant will entitle the holder to purchase one Common Share at a price of $0.325 per Common Share, exercisable for a 24-month period from the applicable issue date.

 

The Company paid finders fees totaling $99,700 in the final three tranches ($62,900 in the second tranche on February 8, 2018, $18,800 in the third tranche on February 14, 2018 and $18,000 in the fourth tranche on February 16, 2018).  In addition, the Company issued a total of 778,000 finder options (the “Finder Options“) to registrants who acted as finders in the final three tranches of the Offering (with 251,600 Finder Options issued in the second tranche on February 8, 2018, 75,200 Finder Options issued in the third tranche on February 14, 2018 and 72,000 Finder Options issued in the third tranche on February 16, 2018).  Each Finder Option entitles the holder to purchase one Unit at a price of $0.25 per Unit, exercisable for a 24-month period from the applicable issue date of the Finder Options.

 

Together with the first tranche closing on January 24, 2018, the Company issued a total of 12,129,664 Units to raise total gross proceeds of $3,032,416 in all four tranches of the Offering.  All Common Shares, Warrants and Finder Options issued in the Offering are subject to a four-month resale restriction expiring June 9, 2018 if issued in the second tranche, June 15, 2018 if issued in the third tranche, and June 17, 2018 if issued in the fourth tranche.

 

In addition, Lineage is pleased to mention the Canadian Securities Administrators’ (the “CSA”) latest update to Staff Notice 51-352 – Issuers with U.S. Marijuana-Related Activities (the “Notice”) and the Memorandum of Understanding (the “MOU”) signed between CDS Clearing and Depository Services Inc. (“CDS”) and Canadian equities exchanges.  In the Notice, the CSA clarified its disclosure expectations applicable to all issuers with U.S. marijuana-related activities, encompassing those directly involved in the cultivation and distribution of marijuana, and those providing goods and services to third parties in the U.S. marijuana industry. The CSA reinforced its position that an approach based on disclosure remains appropriate due to the risks associated with the uncertain political climate concerning the U.S. marijuana industry. The CSA also reinforced the rights of individual stock exchanges to determine eligibility of individual issuers to list based on their respective listing requirements.

 

The Company believes the signing of the MOU by CDS and Canadian equities exchanges is also a positive development for issuers with U.S. marijuana-related activities. The MOU underlines CDS’ reliance on individual exchanges to review conduct of their listed issuers based on those exchanges’ respective listing requirements. The Canadian Securities Exchange (the “CSE“), a signatory of the MOU, has been very supportive of issuers with U.S. marijuana–related activities.