TORONTO, March 21, 2018 /CNW/ - Cronos Group Inc.
(NASDAQ, TSX-V: CRON) ("Cronos Group" or the
"Company") is pleased to announce that it has entered into
an agreement with a syndicate of underwriters led by GMP Securities
L.P. and including BMO Capital Markets, Cormark Securities Inc.,
Raymond James Ltd., Beacon Securities Limited and PI Financial
Corp. to sell 10,420,000 common shares (11,983,000 common shares if
the over-allotment described below is exercised in full) of the
Company, on a "bought deal" basis, at a price of $9.60 per common share, for gross proceeds of
approximately $100.0 million
(approximately $115.0 million if the
over-allotment option is exercised in full).
The Company intends to use $15.0
million of the net proceeds of the offering for capital
expenditures relating to international operations and capacity
expansion, and the remaining net proceeds of the offering for
general working capital purposes, including working capital for the
Company's international operations, and as capital on hand for
potential new investment opportunities.
Completion of the offering is subject to, and conditional upon,
the receipt of all necessary approvals, including approval of the
NASDAQ Global Market and the TSX Venture Exchange and the
applicable securities regulatory authorities. The offering is
expected to close on or about April 6,
2018.
Cronos Group has also granted the underwriters an over-allotment
option to purchase up to an additional 1,563,000 common shares on
the same terms and conditions, exercisable in whole or in part at
any time and from time to time up to 30 days following closing of
the offering.
Cronos Group has filed a preliminary short form prospectus with
securities regulatory authorities in all of the provinces of
Canada other than Quebec and has filed a registration statement
(including a preliminary prospectus) in respect of the offering
with the U.S. Securities and Exchange Commission ("SEC").
The preliminary short form prospectus and registration statement
(including the preliminary prospectus) are subject to completion
and amendment.
The registration statement relating to the common shares has
been filed with the SEC but has not yet become effective. The
common shares may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. In
Canada, there will not be any sale
of common share or any acceptance of an offer to buy common shares
until a receipt for the final short form prospectus has been
issued.
The prospectus contains important information about the
offering. Before investing, you should read the prospectus and
other documents the Company has filed with Canadian securities
regulatory authorities and the SEC for more complete information
about the Company and the offering. You may get those documents
filed with the SEC by visiting EDGAR on the SEC web site at
www.sec.gov or those documents filed with Canadian securities
regulatory authorities by visiting SEDAR at www.sedar.com.
Alternatively, the Company, any underwriter or any dealer
participating in the offering will arrange to send you the
prospectus if you request it from GMP Securities by calling
toll-free at 1 (888) 301-3244 or by email at
GMPECMProspectusDistribution@gmpsecurities.com or from BMO Capital
Markets, Brampton Distribution Centre C/O The Data Group of
Companies, 9195 Torbram Road, Brampton,
Ontario L6S 6H2 by calling (905) 791-3151 ext: 4312 or by
email at torbramwarehouse@datagroup.ca.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any common shares, nor there be any
sale of common shares in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction.
Preliminary 2017 Financial Year Results
Cronos Group has also announced that, based upon information
currently available to management, it anticipates reporting revenue
of between $3.8 and $4.4 million for the twelve months ended
December 31, 2017 ("FY 2017"),
compared to $0.6 million for the
twelve months ended December 31,
2016, with the year-over-year increase resulting primarily
from higher unit sales, driven primarily by (i) increased patient
registration and demand, as well as (ii) the fact that FY 2017
results included Peace Naturals Project Inc. ("Peace
Naturals") revenues for the entire period whereas the 2016
financial year results included Peace Naturals revenues only from
September 2, 2016, when the Company
acquired Peace Naturals, until December 31,
2016.
All figures reported above with respect to the FY 2017 are
preliminary and are unaudited and subject to change and adjustment
as the Company prepares its consolidated financial statements for
the years ended December 31, 2017 and
December 31, 2016. Accordingly,
investors are cautioned not to place undue reliance on the
foregoing guidance. The Company is issuing preliminary results to
enable it to disclose such information in connection with the
offering, and readers are cautioned that the preliminary results
may not be appropriate for other purposes; the Company does not
intend to provide preliminary results in the future. The
preliminary results provided in this news release constitute
forward-looking statements within the meaning of applicable
Canadian securities laws, are based on several assumptions and are
subject to a number of risks and uncertainties. Actual results may
differ materially. See
"Forward-looking statements".
Cronos Group anticipates releasing its consolidated financial
statements for the twelve months ended December 31, 2017 and December 31, 2016 on or about Monday, April 30, 2018.
All references to "$" in this press release are to Canadian
dollars.
About Cronos Group
Cronos Group is a globally diversified and vertically integrated
cannabis company with a presence across four continents. The
Company operates two wholly-owned Canadian Licensed Producers
regulated under Health Canada's Access to Cannabis for Medical
Purposes Regulations: Peace Naturals, which was the first
non-incumbent medical cannabis license granted by Health Canada,
and Original BC Ltd. (British
Columbia), which is based in the Okanagan Valley. The
Company has multiple international production and distribution
platforms including: Germany,
Israel and Australia. The Company is rapidly expanding
its global footprint as it focuses on building an international
iconic brand portfolio and developing disruptive intellectual
property. Cronos Group is committed to building industry leading
companies that transform the perception of cannabis and responsibly
elevate the consumer experience.
Forward-looking statements
This news release contains "forward-looking information" and
"forward-looking statements" within the meaning of applicable
Canadian and U.S. securities laws. All information contained in
this press release that is not clearly historical in nature may
constitute a forward-looking statement. Forward-looking statements
are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by management, are inherently
subject to significant business, economic and competitive risks,
uncertainties and contingencies that may cause actual financial
results, performance or achievements to be materially different
from the estimated future results, performance or achievements
expressed or implied by those forward-looking statements and the
forward-looking statements are not guarantees of future
performance.
Forward-looking statements in this news release include
references to: expectations that applicable approvals to the
offering will be obtained, the success of the offering, expected
timing of closing of the offering, the size of the offering, the
intended use of net proceeds of the offering, and the Company's
expected revenue for FY 2017. There can be no assurance that the
offering will be completed or that Cronos Group will realize the
anticipated benefits from the use of proceeds from the offering.
Completion of the offering is subject to a number of risks and
uncertainties, including without limitation, those relating to
satisfaction of closing conditions and receipt of all required
approvals. In addition, the intended use of the proceeds of
the offering may change if Cronos Group elects to allocate proceeds
differently from that described in this press release. Except as
required by law, the Company disclaims any obligation to update or
revise any forward-looking statements. Readers are cautioned not to
put undue reliance on these forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Cronos Group Inc.