preexisting relationships, inclusive of prospective acquisition costs relating to third-party entities and other litigation costs. On April 18, 2022, in connection with the accrual, the
Company issued 18,755,082 common shares (the VentureForth Shares), among other consideration, to acquire, by merger, VentureForth Holdings, LLC, which is the owner of VentureForth LLC (VentureForth), the owner
of two cannabis licenses in the District of Columbia. In further connection with the accrual, the shares issued and amounts paid also amicably resolved, with no admissions of liability and in exchange for releases, certain direct, indirect,
derivative and indemnification claims relating to a confidential arbitration to which VentureForth, a separate subsidiary of the Company, and certain members of the Companys management team were respondent parties.
The Company issued the VentureForth Shares pursuant to the exemption from registration provided by Rule 506(b), as amended, because (i) there were a
limited number of holders, (ii) the issuances were not made by general solicitation or advertising and (iii) the issuances were made only to accredited investors.
September 2023 Private Placement
On September 18,
2023, the Company entered into subscription agreements with institutional investors (the Investors) for the purchase and sale of 22,244,210 September 2023 Units at a price of C$1.52 per September 2023 Unit pursuant to a private
placement, for aggregate gross proceeds of approximately C$33.8 million or approximately $25 million. Each September 2023 Unit consists of one Common Shares (or Common Share equivalent) and a one half of one September 2023 Warrant. Each
September 2023 Warrant entitles the holder to acquire one Common Share at a price of C$1.96 per share, a 29% premium to issue, for a period of 3 years following the closing of the Initial Tranche and the Investor Option (as defined below), as
applicable. The Initial Tranche consisted of an aggregate of 21,887,240 Common Shares, 11,122,105 September 2023 Warrants and 356,970 September 2023 Pre-Funded Warrants. The September 2023 Offering closed on
September 21, 2023.
The Investors will have the option to purchase $25 million in additional September 2023 Units at a price equal to the Issue
Price, upon written notice to the Company at any time up to 45 days following the date hereof. In connection with the transaction, the Company and the Investors entered into a customary registration rights agreement. The September 2023 Units are
subject to limited lock-up requirements.
The Company issued the September 2023 Units pursuant to the exemption
from registration provided by Section 4(a)(2). The Company is relying on this exemption from registration based in part on the nature of the transaction and the various representations made by the Investors.
Acquisitions
During the year ended December 31,
2020, the Company issued 55,975,602 Common Shares in connection with acquisitions. During the year ended December 31, 2021, the Company issued 65,674,872 Common Shares in connection with acquisitions. During the year ended December 31,
2022, the Company issued 2,082,589 Common Shares in connection with acquisitions, excluding the VentureForth Shares.
The Company relied on
Section 4(a)(2) of the Securities Act or Rule 506(b) as the Common Shares were sold to a limited number of accredited investors in connection with each acquisition.
Long Term Incentive Plan
During the year ended
December 31, 2020, the Company issued 1,852,064 restricted shares pursuant to its long-term incentive plan (the LTIP). During the year ended December 31, 2021, the Company issued 3,097,511 restricted shares pursuant to
its LTIP. On February 24, 2022, the Company issued 93,453 common shares pursuant to its LTIP.
The Company relied on Rule 701 of the Securities Act
to issue securities to its employees, consultants, officers and directors pursuant to the LTIP.
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