VANCOUVER, Jan. 18, 2019 /CNW/ - Hempco Food and Fiber Inc. (TSX.V: HEMP) ("Hempco®" or the "Company") is pleased to announce it has completed an agreement with Aurora Cannabis Inc. ("Aurora") for a non-brokered, private placement of a C$5 million non-transferable, secured, convertible debenture. As previously disclosed on December 21, 2018, the Company has drawn C$3 million against the C$5 million loan for general corporate purposes.
Principal amounts outstanding from time-to-time will bear simple interest at a rate of eight percent (8%) per annum until the principal amount is repaid or converted. The debenture will mature on the second anniversary of the date of issue. Aurora will have the right to convert the principal balance into common shares of Hempco (each, a "Hempco Share") at a conversion price of $1.18 per Hempco Share. At Aurora's election, it may also convert the simple interest into Hempco Shares at a conversion price equal to the market price for Hempco Shares in effect on the date of the notice of conversion. Aurora currently holds a 52% interest in Hempco and, if fully converted, excluding interest, would hold 55% of Hempco's outstanding shares.
The convertible debenture will be secured by a general security agreement and a guaranty from Hempco's wholly owned subsidiary, Hempco Canada Superfoods Inc. ("Superfoods"). The guaranty will be secured by a general security agreement from Superfoods.
"The agreement provides us with access to additional funds to accelerate execution of our Five-Prong Growth Strategy, which includes the development of new markets, the introduction of new product innovations, as well as capitalizing on global tri-crop opportunities," said Diane Jang, CEO, Hempco Food and Fiber Inc. "With our new Nisku plant anticipated to commence operations and ramp up this coming spring, we are well positioned to execute and pursue accelerated growth."
The convertible debenture and any Hempco Shares issued upon conversion will be subject to a four-month hold period under applicable securities laws.
The issuance of the convertible debenture is finalized, subject to approval by TSX Venture.
For more than 12 years Hempco has been a trusted and respected pioneer, innovator and provider of quality hemp-based foods, hemp fiber and hemp nutraceuticals. Hempco produces and markets the brands PLANET HEMP ™ and PRAISE, hemp-based foods and nutritional supplements for people and animals. Hempco is expanding its processing ability to meet global demands in a 56,000 sq. ft. facility located at Nisku, Alberta. Hempco's common shares trade on the TSX Venture Exchange under the symbol "HEMP".
The 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.
This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"). Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements in this press release include the Company's anticipation of further growth. These statements are only predictions and are not guarantees of future performance; therefore, undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are 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 statements. The Companies are under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
On behalf of the Board of Directors,
HEMPCO FOOD AND FIBER INC.
SOURCE Hempco Food and Fiber Inc.