** THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.**
PHOENIX, Oct. 21, 2020 (GLOBE NEWSWIRE) — Harvest Health & Recreation Inc. (“Harvest” or the “Company”) ( CSE: HARV ), a vertically integrated cannabis company and multi-state operator in the U.S., is pleased to announce that is has entered into an agreement pursuant to which Eight Capital, as lead agent and bookrunner, together with a syndicate of underwriters (collectively, the “ Underwriters ”), will purchase on a “bought deal” basis 13,274,400 units of the Company (“the Units ”) at a price of $2.26 per Unit (the “ Offering Price ) for aggregate gross proceeds to Harvest of $30,000,144 (the “ Offering ”). (All figures are in Canadian dollars unless otherwise stated.)
Each Unit shall consist of one common share of the Company (each, a “ Unit Share ”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “ Warrant ”). Each Warrant shall be exercisable into one common share of the Company at an exercise price of $3.05 per common share for a period of 30 months from the Closing Date (as defined below) (the “ Warrant Shares ” or together with the Unit Shares, “ Shares ”). If the daily volume weighted average trading price of the common shares of the Company on the Canadian Securities Exchange (the “ CSE ”) for any 10 consecutive days equals or exceeds $4.97, the Company may, upon providing written notice to the holders of the Warrants, accelerate the expiry date of the Warrants to the date that is 30 days following the date of such written notice.
The Company has granted the Underwriters an option, exercisable, in whole or in part, at any time not later than the 30 th day following the closing of the Offering, to purchase up to an additional 15% of the Offering at the Offering Price for market stabilization purposes and to cover over-allotments, if any (the “ Over-Allotment Option ”). If the Over-Allotment Option is exercised in full, the total gross proceeds of the Offering will be approximately $34,500,000.
The Units will be offered by way of (i) a prospectus supplement (the “ Prospectus Supplement ”) to Harvest’s short form base shelf prospectus dated June 24, 2020, of which the Prospectus Supplement will be filed with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada; (ii) in the United States by way of private placement pursuant to the exemption from registration provided for under Rule 144A of the United States Securities Act of 1933, as amended; and (iii) in jurisdictions outside of Canada and the United States as are agreed to by the Company and the Underwriters on a private placement or equivalent basis.
The net proceeds of the Offering are expected to be used for working capital and general corporate purposes.