Aleafia Health Announces $15 Million Bought Deal Offering of Units

Rhea-AI Summary

Aleafia Health has announced an agreement with Cantor Fitzgerald Canada Corporation to purchase 18,000,000 units at $0.83 each, for gross proceeds of $14,940,000. Each unit includes one common share and one-half warrant, with warrants priced at $1.05 for 24 months. An overallotment option allows for an additional 15% in units, potentially increasing total proceeds to $17,181,000. The funds will be utilized for working capital and general corporate purposes, with the offering closing around March 9, 2021, pending regulatory approvals.

Positive

• Gross proceeds of $14,940,000 from the offering.
• Potential total proceeds of $17,181,000 if over-allotment is exercised.
• Use of funds targeted for working capital and general corporate purposes.

Negative

• None.

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

TORONTO, Feb. 16, 2021 (GLOBE NEWSWIRE) -- Aleafia Health Inc. (TSX: AH, OTC: ALEAF) (“Aleafia Health” or the “Company”) is pleased to announce that it has entered into an agreement with Cantor Fitzgerald Canada Corporation, as lead underwriter and sole bookrunner, on behalf of a syndicate of underwriters (together, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase 18,000,000 units of the Company (the “Units”), on a “bought deal” basis pursuant to a short form prospectus offering, subject to all required regulatory approvals, at a price per Unit of $0.83 (the “Issue Price”) for gross proceeds of $14,940,000 (the “Offering”).

Each Unit will be comprised of one common share in the capital of the Company (a “Common Share”) and one-half of one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant shall entitle the holder thereof to purchase one Common Share at an exercise price of $1.05, for a period of 24 months following the closing of the Offering.

The Company has agreed to grant the Underwriter an over-allotment option (the “Over-Allotment Option”), solely for market stabilization and overallocation purposes, to purchase up to an additional 15% of the Units at the Issue Price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the Offering. If this option is exercised in full, the Company will receive an additional $2,241,000 in gross proceeds for total aggregate gross proceeds of $17,181,000.

In connection with the Offering the Company has agreed to pay the Underwriters a cash fee of 7% of the aggregate gross proceeds raised from the Offering, and non-transferable compensation warrants equal to 6% of the Units sold under the Offering (in each case including any exercise of the Over-Allotment Option).

The Company intends to use the net proceeds of the Offering for working capital and general corporate purposes.

The closing date of the Offering is scheduled to be on or about March 9, 2021 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange and the applicable securities regulatory authorities.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. 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 absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.

For Investor & Media Relations

Nicholas Bergamini, VP Investor Relations
1-833-TSX-ALEF (879-2533)
IR@AleafiaHealth.com

Learn More

www.AleafiaHealth.com

About Aleafia Health

Aleafia Health is a vertically integrated and federally licensed Canadian cannabis company offering cannabis health and wellness services and products in Canada and in international markets. The Company operates medical clinics, education centres and production facilities for the production and sale of cannabis.

Aleafia Health owns three significant licensed cannabis production facilities, including the first large-scale, legal outdoor cultivation facility in Canadian history. The Company produces a diverse portfolio of commercially proven, high-margin derivative products including oils, capsules, edibles, sublingual strips and vapes. Aleafia Health operates the largest national network of medical cannabis clinics and education centres staffed by MDs, nurse practitioners and educators and operates internationally in three continents.

Forward Looking Information

This news release contains forward-looking information within the meaning of applicable Canadian and United States securities laws. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, or “believes” or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained in this news release. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including risks contained in the Company’s annual information form filed with Canadian securities regulators available on the Company’s SEDAR profile at www.sedar.com. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking information included in this news release are made as of the date of this news release and the Company does not undertake any obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.

FAQ

What is the purpose of Aleafia Health's recent offering?

Aleafia Health intends to use the net proceeds from the offering for working capital and general corporate purposes.

When is the closing date for the Aleafia Health offering?

The closing date for the offering is scheduled for around March 9, 2021, subject to regulatory approvals.

What are the financial terms of Aleafia Health's unit offering?

Aleafia Health is offering 18,000,000 units at $0.83 each for gross proceeds of $14,940,000, with an option for an additional 15% in units.

What are the details of the warrants included in Aleafia Health's offering?

Each unit includes one common share and one-half warrant, with each whole warrant allowing the purchase of one common share at $1.05 for 24 months.