Cannabis Wheaton Income Corp.
TSX VENTURE : CBW

Cannabis Wheaton Income Corp.

September 18, 2017 23:08 ET

Cannabis Wheaton Announces Private Placement of Convertible Debenture Units

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 18, 2017) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION TO UNITED STATES

Cannabis Wheaton Income Corp. (TSX VENTURE:CBW) ("Cannabis Wheaton" or the "Company") is pleased to announce a private placement offering of up to 35,000 of convertible debenture units ("Convertible Debenture Units") for aggregate gross proceeds of up to $35 million (the "Offering").

The net proceeds received by the Company will be used to fund working capital and general corporate purposes, including but not limited to, financing of the Company's streaming partners pursuant to certain streaming agreements and general and administrative expenses.

MMCAP International Inc. SPC (the "Lead Subscriber") and the Company have executed a binding term sheet with respect to the Offering, whereby the Lead Subscriber has agreed to subscribe for up to $28 million aggregate principal amount of Convertible Debenture Units. Closing of the Offering is subject to the satisfaction of customary conditions.

The Company has agreed to use its commercially reasonable efforts to obtain a receipt from the applicable Canadian securities regulatory authorities (the "Securities Commissions") for a (final) short form prospect qualifying the distribution of the common shares of the Company (the "Common Shares") issuable upon conversion of the Debenture and CD Warrants (the "Qualifying Prospectus") before the date that is four months and one day following the closing of the offering; provided, however, that there is no assurance that a Qualifying Prospectus will be filed or that a receipt therefor will be issued by the Securities Commissions prior to the expiry of the statutory four month hold period.

Convertible Debenture Units

Each Convertible Debenture Unit will be offered at a price of $1,000 per Convertible Debenture Unit for aggregate gross proceeds of up to $35 million. Each Convertible Debenture Unit will consist of $1,000 principal amount of 8% senior unsecured convertible debentures (the "Debentures") and 833 Common Share purchase warrants (the "CD Warrants") of the Company. Each CD Warrant will be exercisable to acquire one Common Share at an exercise price of $1.20 per Common Share for a period of 24 months following the Closing Date.

The Debentures will bear interest from the closing date of the Offering at 8.0% per annum, calculated semi-annually on June 30 and December 31 of each year. The first interest payment will be made on June 30, 2018 and will consist of interest accrued from and including the Closing Date to June 30, 2018. The Debentures will mature on the date that is 60 months from the Closing Date (the "Maturity Date").

The Debentures will be convertible at the option of the holder, at any time prior to the close of business on the last business day immediately preceding the Maturity Date, into (i) that number of common shares of the Company ("Common Shares") computed on the basis of the principal amount of the Debentures divided by the conversion price of $1.20 per Common Share (the "Conversion Price"), and (ii) a cash payment equal to the additional interest amount that such holder would have received if it had held the Debenture from the date of conversion until the Maturity Date.

The Debentures will provide for the adjustment of the Conversion Price in certain events including, without limitation, the subdivision or consolidation of the outstanding Common Shares, the issue of Common Shares or securities convertible into Common Shares by way of stock dividend or distribution, the issue of rights, options or warrants to all or substantially all of the holders of Common Shares in certain circumstances, and the distribution to all or substantially all of the holders of Common Shares of any other class of shares, rights, options or warrants, evidences of indebtedness or assets.

Upon a change of control of the Company, on the date that is not less than 30 days following the giving of notice of the change of control, the Debenture holders shall, in their sole discretion, have the right to require the Company to, either: (i) purchase the Debentures at 100% of the principal amount thereof plus unpaid interest to the Maturity Date; or (ii) if the Change of Control results in a new issuer, convert the Debenture into a replacement debenture of the new issuer in the aggregate principal amount of 101% of the aggregate principal amount of the Debenture.

The Debenture shall be offered and sold by private placement (i) in Canada to "accredited investors" within the meaning of NI 45-106 - Prospectus Exemptions and other exempt purchasers in each province of Canada, and (ii) outside Canada and the United States on a basis which does not require the qualification or registration of any of the Debentures or the Company. The Debentures, CD Warrants and, subject to the Company filing a Qualifying Prospectus (as described above), the Common Shares issuable upon the conversion of the Debentures and CD Warrants, will be subject to a statutory four month hold period.

Related Party Disclosure

The Lead Subscriber is considered to be a related party for purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") and Policy 5.9 - Protection of Minority Security Holders in Special Transactions of the TSX Venture Exchange, making the Offering a "related party transaction". Pursuant to MI 61-101, the Company has filed a material change report providing disclosure in relation to each "related party transaction" on SEDAR under the Company's issuer profile at www.sedar.com. The Company did not file the material change report more than 21 days before the expected closing date of the Offering as the definitive documentation for the Offering and the participation therein by each "related party" of the Company were not settled until shortly prior to the closing of the Offering, and the Company wishes to close the Offering on an expedited basis for sound business reasons.

Closing Conditions and Related Matters

Subject to the satisfaction of customary of conditions, the Offering is expected to close on or about September 29, 2017.

ON BEHALF OF THE BOARD

Chuck Rifici, Chairman & CEO

About Cannabis Wheaton Income Corp. (TSX VENTURE:CBW)

Backed by a team of industry experts, Cannabis Wheaton is the first cannabis streaming company in the world. Our streams will include production from across Canada coming from our partners comprised of licensed producers of cannabis (LP) and LP applicants. Cannabis Wheaton's mandate is to facilitate real growth for our streaming partners by providing them with financial support and sharing our collective industry experience.

Stay Connected

For more information about Cannabis Wheaton and our management team, please visit: http://www.cannabiswheaton.com, or follow us on Twitter @CannabisWheaton.

Forward-Looking Information

This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: closing of the Offering, inability to complete the Offering on the proposed terms or at all, delays in obtaining or inability to obtain required government or other regulatory approvals, the ability to generate revenue through the streaming agreements, requirements to obtain additional financing, timeliness of government approvals for granting of permits and licences, including licences to cultivate cannabis, completion of the facilities, where applicable, actual operating performance of the facilities, regulatory or political change, competition and other risks affecting the Company in particular and the medical cannabis industry generally. Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

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