TORONTOJuly 9, 2018 /CNW/ – Canopy Rivers Corporation (“Canopy Rivers“) is pleased to announce that it has completed its previously announced private placement (the “Offering“) of subscription receipts (the “Subscription Receipts“) for gross proceeds of $104,212,000. 28,792,000 Subscription Receipts were sold pursuant to a brokered portion of the Offering co-led by CIBC Capital Markets (“CIBC”), GMP Securities L.P. (“GMP”), as joint bookrunners and together with Eight Capital (collectively with CIBC and GMP, the “Co-Lead Agents“), on behalf of a syndicate of agents including Cormark Securities Inc., INFOR Financial Inc. and PI Financial Corp. (together with the Co-Lead Agents, the “Agents“). An additional 982,857 Subscription Receipts were sold on a non-brokered basis.

Canopy Rivers is also pleased to announce that it has entered into a definitive amalgamation agreement with AIM2 Ventures Inc. (“AIM2“) and 10859150 Canada Inc., a wholly-owned subsidiary of AIM2, which outlines the terms and conditions pursuant to which the parties will complete the the proposed business combination transaction  involving Canopy Rivers and AIM2 (the “Transaction“). The Transaction will result in a reverse take-over of AIM2 by Canopy Rivers and will constitute AIM2’s “Qualifying Transaction” (as such term is defined in Policy 2.4 of the TSX Venture Exchange (the “TSXV“)). Pursuant to the Transaction, Canopy Rivers and a wholly-owned subsidiary of AIM2 will amalgamate to form a new amalgamated company, and upon such amalgamation, holders of class B common shares of Canopy Rivers (“Canopy Rivers Subordinated Voting Shares“) will receive one post-consolidation AIM2 common share (a “New AIM2 Subordinated Voting Share“) for each Canopy Rivers Subordinated Voting Share held and Canopy Growth Corporation, the sole holder of the class A common shares of Canopy Rivers (the “Canopy Rivers Multiple Voting Shares“), will receive one new AIM2 multiple voting share for each Canopy Rivers Multiple Voting Share held. Other details of the Transaction are as disclosed in Canopy Rivers and AIM2’s joint press release dated May 30, 2018 and in AIM2’s press release dated June 18, 2018.

Pursuant to the Offering, the Company issued an aggregate of 29,774,857 Subscription Receipts at a price of $3.50(the “Issue Price“) per Subscription Receipt for gross proceeds of $104,212,000. The Subscription Receipts were issued pursuant to a subscription receipt agreement (the “Subscription Receipt Agreement“) among Canopy Rivers, the Co-Lead Agents and Computershare Trust Company of Canada (the “Escrow Agent“). Upon satisfaction of certain Escrow Release Conditions (as defined below), each Subscription Receipt will be automatically converted without any further consideration or action by the holder thereof into one Canopy Rivers Subordinated Voting Share.

The gross proceeds of the Offering, less 50% of the commission payable to the Agents (the “Commission“), together with all interest and other income earned thereon (the “Escrowed Funds“) are to be held in escrow by the Escrow Agent pending satisfaction of the Escrow Release Conditions. Provided that the Escrow Release Conditions are satisfied by [November 2], 2018 (the “Escrow Release Deadline“), the Escrowed Funds will be released from escrow by the Escrow Agent to: (a) the Co-Lead Agents, on behalf of the Agents, in an amount equal to 50% of the Commission, together with any pro rata interest earned thereon, and the expenses incurred by the Agents in connection with the Offering; and (b) Canopy Rivers, in an amount equal to the Escrowed Funds, less the foregoing deductions.

If the Escrow Release Conditions have not been satisfied on or prior to the Escrow Release Deadline, the Escrowed Funds shall be returned to the holders of the Subscription Receipts on a pro rata basis and the Subscription Receipts shall thereafter be cancelled. If the Escrowed Funds are less than the aggregate Issue Price paid for the then issued and outstanding Subscription Receipts plus the interest and other income earned thereon, Canopy Rivers will contribute such amount as is necessary to pay, in respect of each Subscription Receipt cancelled, an amount equal to the Issue Price per Subscription Receipt and the interest and other income earned thereon.

The escrow release conditions (“Escrow Release Conditions“) will be as follows:


all conditions precedent to the closing of the Transaction as included in the definitive agreement in respect of the Transaction have been satisfied or waived, including, inter alia, the filing and acceptance by the TSXV of the disclosure document, to the satisfaction of the Co-Lead Agents, on behalf of the Agents, and the definitive agreement shall not have been terminated;


the receipt of all required shareholder and regulatory approvals, as applicable, for the Transaction and the Offering, to the satisfaction of the Co-Lead Agents, on behalf of the Agents;


receipt of conditional approval by the TSXV for the listing of the New AIM2 Subordinated Voting Shares, including any such New AIM2 Subordinated Voting Shares issuable upon the conversion of the securities of Canopy Rivers issuable pursuant to the Offering;


Canopy Rivers shall have not committed any breach of the agency agreement entered into between Canopy Rivers and the Agents in connection with the Offering, that has not been waived by the Co-Lead Agents or cured within five days of Canopy Rivers’ receipt of written notice from the Co-Lead Agents specifying in reasonable detail the nature of such breach;


the distribution of the New AIM2 Subordinated Voting Shares to be issued in exchange for the Canopy Rivers Subordinated Voting Shares pursuant to the Transaction being exempt from applicable prospectus and registration requirements of applicable securities laws and not subject to any statutory hold or restricted period; and


Canopy Rivers having delivered a notice to the Escrow Agent confirming that the conditions set forth in (a) through (e) above have been met or waived.

Immediately prior to the effective time of the Transaction, upon satisfaction of the Escrow Release Conditions, the Subscription Receipts will be automatically converted into Canopy Rivers Subordinated Voting Shares in accordance with the terms of the Subscription Receipt Agreement. Pursuant to the Transaction, holders of each Canopy Rivers Subordinated Voting Share will receive one New AIM2 Subordinated Voting Share for each one Canopy Rivers Subordinated Voting Share held.

This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

About Canopy Rivers:
Canopy Rivers is a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector. Canopy Rivers works collaboratively with Canopy Growth (TSX:WEED, NYSE: CGC) to identify strategic counterparties seeking financial and/or operating support and affiliation with the Canopy Growth group of companies. The result is an ecosystem of complementary and best-in-class cannabis operating companies that is representative of all the various niches in this newly developing cannabis economy. As the portfolio continues to develop, constituents benefit from opportunities to join forces with Canopy Growth and collaborate among themselves, resulting in an ideal environment for innovation, synergy and value creation for Canopy Rivers, Canopy Growth and the entire ecosystem of portfolio companies.

Cautionary Note Regarding Forward-Looking Information

This press release contains statements which constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of Canopy Rivers with respect to future business activities and operating performance. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding the proposed Transaction involving AIM2, the satisfaction of the Escrow Release Conditions and expectations for other economic, business, and/or competitive factors.

Investors are cautioned that forward-looking information is not based on historical facts but instead reflect Canopy Rivers’ management’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made.Although Canopy Rivers believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the ability to consummate the Transaction; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other conditions to the consummation of the Transaction on the proposed terms and schedule; the potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; the re-rating potential following the consummation of the Transaction; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws, including the approval and implementation of the Cannabis Act; compliance with extensive government regulation; and the diversion of management time on the Transaction. This forward-looking information may be affected by risks and uncertainties in the business of Canopy Rivers and market conditions.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Canopy Rivers has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Canopy Rivers does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

SOURCE Canopy Rivers Corporation

For further information: Canopy Rivers Corporation, Daniel Pearlstein, Executive Vice President & Head of Business Development, E-mail: daniel@canopyrivers.com