TORONTO, CANADA, October 21, 2022 / CNW – Trees Corporation (NEO: Tree) (“Trees” or
the “Company”) is pleased to announce that it has completed the closing of a non-brokered
private placement (the “Private Placement”) of 200 units (“Units”) of the Company at a price of
$1,000 per Unit for gross proceeds of approximately $200,000. The closing is expected to form
part of a larger offering for gross proceeds of up to $1,000,000.
Proceeds from the Private Placement will be directed towards general working capital
requirements and the opening of the Company’s next Trees Cannabis location at 3812a Bloor
Street West, Etobicoke, ON, anticipated to open later this year.
Details of the Financing
Each Unit consists of (i) one 12.0% secured convertible promissory note bearing a principal
amount of $1,000 (each, a “Convertible Note”), convertible into common shares of the Company
(each, a “Common Share”) at a conversion price of C$0.015 per Common Share (the
“Conversion Price”) and maturing thirty-six (36) months from the closing of the Private
Placement; and (ii) 66,667 common share purchase warrants of the Company (each, a
“Warrant”). Each Warrant entitles the holder thereof to purchase one Common Share at a price
of C$0.015 per share until October 20, 2025, subject to Acceleration (defined hereafter).
If, during the term of the Convertible Notes, the volume weighted-average share price of the
Common Shares on the Neo Exchange Inc. (the “NEO”) for twenty (20) consecutive trading days
equals or exceeds C$0.06, the Company may, upon 30 days’ prior notice, convert the Convertible
Notes into Common Shares at the conversion price of $0.015 (subject to customary adjustments),
in whole or, from time to time, in part.
In the event that the volume-weighted average price of the Common Shares on the NEO for
twenty (20) consecutive trading days equals or exceeds $0.06, the Company may, upon 30 days’
prior notice, accelerate the expiry of the Warrants to a date that is 30 days from the date of the
notice (the “Acceleration”).
The Company intends to use the net proceeds from the Private Placement for general working
capital purposes. Completion of the proposed Private Placement is subject to the satisfaction of
certain conditions precedent, including, but not limited to, receipt of all necessary regulatory
approvals, including approval of the NEO.
The Company paid a finder’s fee of C$7,000 in cash to certain finders in connection with the
closing of the Private Placement.
Pursuant to applicable Canadian securities laws, all securities issued and issuable in connection
with the closing of the Private Placement will be subject to a four (4) month hold period ending
February 21, 2023.
Trees is a cannabis company at the intersection of community, content, and commerce. Publicly
traded, Trees offers a differentiated retail experience, combined with digital platforms that aim to
educate and amplify, unlocking emerging consumer segments and need states that allows Trees
to uniquely engage the 360-cannabis consumer. The Company currently has 13 Trees branded
storefronts in Canada, including eight (8) stores owned and operated in Ontario and five (5) stores
operated in BC, subject to the closing of the acquisition of the assets of 101 pursuant to the terms
of the APA. The closing of the transactions contemplated by the APA is subject to certain
conditions precedent, including the receipt of certain licensing approvals and related regulatory
consents, the latter of which has now been received in respect of one of the five locations. Now
with the completion of due diligence approval from the British Columbia Liquor and Cannabis
Regulation Branch, Trees anticipates the receipt of regulatory approvals for the remaining 4
stores imminently. Until such time as the closing of the acquisition of the assets under the terms
of the APA, the BC stores will remain subject to a brand license agreement and will be included
when reporting System-Wide Retail Sales.
(1) System-wide retail sales represents the sum of the revenue reported to Trees by (i) brand
licensed retail cannabis stores, which are subject to a brand license agreement providing Trees
with a royalty interest, and (ii) Company-owned retail cannabis stores. Management believes this
measure is useful to the investment community in evaluating brand scale and market penetration
and is used by management of Trees to assess the financial and operational performance of the
Company and the strength of the Company’s market position relative to its competitors.
Additional information on Trees can be found by reviewing its profile on SEDAR at
For more information, please contact:
President and Chief Financial Officer