On December 9, 2022, Canopy USA, LLC and certain of its subsidiaries entered into a debt settlement agreement with TerrAscend Corp. and certain of its subsidiaries in order to extinguish all amounts owing to Canopy USA pursuant to three loans with an aggregate principal amount of approximately $125.5 million in exchange for 25,601,467 exchangeable shares in the capital of TerrAscend. In addition, all common share purchase warrants held by Canopy USA were cancelled and 22,474,130 new common share purchase warrants were issued with an expiration date of December 31, 2032. The exercise prices of the warrants range from $3.74 to $17.19 with a weighted average exercise price of $6.07.
Canopy USA now holds 63,492,037 exchangeable shares and 22,474,130 warrants in the capital of TerrAscend and is deemed to own 1,072,450 common shares that are subject to an option for an aggregate exercise price of $1.00. Assuming the conversion of the exchangeable shares into common shares, and the exercise of the option, Canopy USA would hold approximately 18.5% of the issued and outstanding common shares of TerrAscend. If Canopy USA exercised all of the warrants, Canopy USA would hold approximately 23.4% of the issued and outstanding common shares on a partially-diluted basis.
Cassels represented Canopy USA.