Canopy Growth Corporation (NASDAQ: CGC) has announced that further to the June 29, 2022 press release, it has signed an additional privately negotiated exchange deal with a noteholder of its outstanding 4.25% unsecured notes expiring in 2023. 

Canopy to acquire around C$7.25 of the aggregate principal sum of the note 

As per the agreement, the holder will acquire around C$7.25 million aggregate principal sum of the holders of the notes in exchange for the company’s common stock and around C$140,000 in cash in unpaid and accrued interest.

According to the Exchange Agreement terms, the company has agreed to buy the Notes from the holder for a total purchase price of C$7.17 million minus unpaid and accrued interest that will be payable as part of t Cash Payment. The aggregate purchase price is payable in that the number of Canopy shares will be equal to the purchase price divided by the volume-weighted average trading price of the company’s shares on the Nasdaq capital market for ten consecutive trading days from June 30, 2022. This will be subject to a base price of $2.5 and a maximum price of almost $3.5, which was the closing price of the company’s shares on June 29, 2022. 

Canopy to issue 1.589 million shares in the initial closing 

The issuance of shares will satisfy the Share Consolidation. The company will issue shares in two tranches, with 1.589 million shares issued to the noteholder at initial closing and if the Average Price determined in the Averaging Duration is below the price as of July 18, 2022. This will be up to a certain percentage of canopy shares in excess of the purchase price over the initial closing shares.

Combined with other exchange agreements announced before the June 29, 2022 announcement, the company has so far issued close to 35.66 million Canopy shares. Under the terms of the Exchange Agreement and other agreements, at no time will over 80.629 million shares be issuable as per the transaction. The transactions will be carried as private placements, and the issued shares will be as per the exemption of the Security Act of 1933’s registration requirements. 

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