SOURCE: Cannabis Wheaton Income Corp.

Cannabis Wheaton Income Corp.

June 06, 2017 15:10 ET

Cannabis Wheaton Announces Revised Offering Terms and Lead Order News Release

VANCOUVER, BC--(Marketwired - June 06, 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 that it has entered into an engagement letter with Mackie Research Capital Corporation to act as lead agent and sole bookrunner (the "Agent") to sell by way of a private placement, on a best efforts basis, Special Warrants and Convertible Debenture Units (as described below), for gross proceeds of up to $50 million(the "Offering").

The Company has agreed to grant the Agent an over-allotment option to offer up to that number of additional Special Warrants and/or Convertible Debenture Units as is equal to 15% of the number sold in the Offering, on the same terms and conditions as the Offering, increasing the size of the Offering to a maximum of $57.5 million in aggregate gross proceeds. The over-allotment option may be exercised in whole or in part on or before 48 hours prior to the closing of the Offering, which is expected to occur on or about June 21, 2017 (the "Closing Date").

"Mackie Research has made a very strong show of support for Cannabis Wheaton and the Company's innovative platform. We are excited to proceed with the Offering in accordance with our original timeline and look forward to working with our streaming partners to advance our collective goals" said Chuck Rifici.

Lead Order

Subject to a number of customary closing conditions (including the Company completing the Special Warrant Offering), the Company is pleased to announce that a Canadian institutional investor is expected to subscribe for up to $25,000,000 aggregate principal amount of Convertible Debenture Units, with an option to increase its subscription by an additional $3,750,000.

Special Warrants

Each Special Warrant will be offered at a price of $1.00 per Special Warrant for gross proceeds of up to $25,000,000 ($28,750,000 inclusive of the over-allotment option) (the "Special Warrant Offering"). Each Special Warrant will be automatically exercised (without any further action by the holder or payment of any further consideration and subject to customary anti-dilution adjustments) into one Unit (as described below) of the Company on the date (the "Automatic Exercise Date") that is the earlier of: (i) the date that is three business days following the date on which the Company obtains a receipt from the applicable Canadian securities regulatory authorities (the "Securities Commissions") for a (final) short form prospectus qualifying the distribution of the Units issuable upon exercise of the Special Warrants (the "Qualifying Prospectus"), and (ii) the date that is four months and one day after the Closing Date. Each Unit will consist of one common share in the capital of the Company (each a "Common Share") and one Common Share purchase warrant of the Company (a "Warrant").

Each Warrant will (subject to acceleration and customary anti-dilution adjustments) entitle the holder thereof to purchase one Common Share, at any time on or prior to the date that is 24 months following the Closing Date, at an exercise price of $1.50per Common Share. The Company has agreed to use its commercially reasonable efforts to obtain the Qualifying Prospectus on or before the date that is 90 days following closing of the Offering (the "Qualification Deadline") 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. If a receipt for Qualifying Prospectus is not obtained before the Qualification Deadline, each holder shall be entitled to receive, without payment of additional consideration, 1.10 Units per Special Warrant.

Convertible Debenture Units

Each Convertible Debenture Unit will be offered at a price of $1,000 for gross proceeds of up to $25,000,000 ($28,750,000 inclusive of the over-allotment option). Each Convertible Debenture Unit will consist of $1,000 principal amount of 6% senior unsecured convertible debentures (the "Convertible Debentures") and 500 Common Share purchase warrants (the "CD Warrants") of the Company. Each CD Warrant (subject to acceleration and customary anti-dilution adjustments) will be exercisable to acquire one Common Share at an exercise price of $1.50per share for a period of 24 months following the Closing Date. Subject to the Company filing a Qualifying Prospectus (as described above), the Convertible Debentures, the CD Warrants and the Common Shares will be subject to the statutory four month hold period. The Convertible Debentures will bear interest from the Closing Date at 6.0% per annum, calculated semi-annually in arrears 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 Convertible Debentures will mature on the date that is 24 months from the Closing Date (the "Maturity Date"). The Convertible Debentures will be convertible into Common Shares 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 at a conversion price of $1.00 per Common Share (the "Conversion Price"), subject to adjustment in certain events. Holders converting their Convertible Debentures will receive accrued and unpaid interest thereon for the period from and including the date of the latest interest payment date to, but excluding, the date of conversion.

Beginning on the date that is four months and one day following the Closing Date, the Company may force the conversion of the principal amount of the then outstanding Convertible Debentures at the Conversion Price on not less than 30 days' notice should the daily volume weighted average trading price of the Company's Common Shares be greater than $2.00 for any 10 consecutive trading days on the TSX Venture Exchange (the "TSX-V"), or such other exchange as the Common Shares may then be trading (the "Trigger Event"). In addition, upon the occurrence of the Trigger Event, the Company may also accelerate the expiry date of the Warrants and CD Warrants on not less than 30 days' notice.

Subject to a number of customary closing conditions, including TSX-V approval, negotiation of definitive closing documents, reconfirmation of pricing, due diligence and the absence of a material adverse change, the Offering is expected to be completed on or about June 21, 2017.

ON BEHALF OF THE BOARD

"Chuck Rifici"

Chairman & CEO

(604) 687-7130

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. Call: 1-604 687 7130 Email: Mario@skanderbegcapital.com http://www.skanderbegcapital.com.

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: receipt of regulatory approvals 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.

Contact Information