James Wagner Secures up to $10 Million in Convertible Financing

James E. Wagner Cultivation Corporation (TSXV: JWCA) has announced it has entered into an agreement with Lind Global Macro Fund to issue convertible securities with a value of up to $10 million. The funds from the convertible securities will be used for general purposes.

Effective December 29, the agreement will commence in two stages. The first stage will consist of $2 million, with several upfront payments such as a prepaid interest of $400,000, as well as a commitment fee of $100,000. The conversion price of this first tranche will be $0.25, which is the 5-day volume weighted average price of JWC’s common shares as of December 27, 2019. The securities will be available for conversion following a period of 24 months after the date of issuance. Furthermore, JWC will issue 4,000,640 warrants at an exercise price of $0.33, which the security holder can then exercise after a period of two years following the commencement date.

If however, JWC fails to meet its funding needs in the first tranche, the company can issue a second tranche consisting of an amount between $500,000 and $8 million. The second tranche would also be subject to a conversion period of 24 months, with the conversion price equal to the 5-day volume weighted average trading price of the common shares on the TSXV prior to the closing announcement date of the second tranche.

JWC also holds a buy-back option, where the company can purchase up to 25% of remaining convertible securities at a conversion price of $0.25 and convert them to common shares.

Conversely, Lind Global, has the option to convert all or a portion of the securities into common stock at the conversion price at any time during the duration of the term. However, the investor may not convert the securities in the first four months after the closing date.

James E. Wagner Cultivation Corporation (JWC) is a cannabis licensed producer based in Kitchener, Ontario, and is currently trading at $0.20 on the TSXV.

Information for this analysis was found via Sedar, and James Wagner Cultivation. The author has no securities related to this organization. James Wagner Cultivation was previously a client of CanaCom Group, the parent company of The Deep Dive. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.