Canopy Growth Restructures Agreements, Sells Unregistered Equity

TL;DR

**Canopy Growth just shook up its financial agreements and sold new shares privately.**

AI Summary

On January 9, 2024, Canopy Growth Corp. terminated a previous material definitive agreement and entered into a new one, involving the unregistered sale of equity securities. This indicates a significant restructuring of their financial agreements, potentially to raise capital or adjust debt. For investors, this matters because changes in material agreements and equity sales can impact share dilution, future profitability, and the company's overall financial health.

Why It Matters

This filing signals a strategic financial shift for Canopy Growth, which could impact share value through dilution or by improving the company's capital structure.

Risk Assessment

Risk Level: medium — The termination and entry into new material agreements, coupled with unregistered equity sales, introduce uncertainty regarding the terms and potential dilution for existing shareholders.

Analyst Insight

Investors should monitor subsequent filings for details on the new agreements and equity sales to assess potential dilution and the strategic implications for Canopy Growth's financial health.

Key Players & Entities

• Canopy Growth Corporation (company) — the registrant filing the 8-K
• January 9, 2024 (date) — date of the earliest event reported
• 001-38496 (other) — Commission File Number for Canopy Growth
• CGC (other) — Trading Symbol for Common Shares
• Nasdaq Global Select Market (other) — exchange where Common Shares are registered

Forward-Looking Statements

• Canopy Growth will provide more details on the new material definitive agreement and the terms of the unregistered equity sales in future filings. (Canopy Growth Corporation) — high confidence, target: Q1 2024
• The unregistered sales of equity securities will lead to some level of share dilution for existing shareholders. (Canopy Growth Corporation) — medium confidence, target: Ongoing

FAQ

Key Financial Figures

• $4.29 — e "Units") of the Company at a price of $4.29 per Unit in a private placement (the "P
• $30 million — t") for approximate gross proceeds of US$30 million. Following the announcement of the Priv
• $4.83 — from the Company at a price equal to US$4.83. The Series A Warrants were to be exerc

Filing Documents

• tm243300d1_8k.htm (8-K) — 28KB
• 0001104659-24-003768.txt ( ) — 196KB
• cgc-20240109.xsd (EX-101.SCH) — 3KB
• cgc-20240109_lab.xml (EX-101.LAB) — 33KB
• cgc-20240109_pre.xml (EX-101.PRE) — 22KB
• tm243300d1_8k_htm.xml (XML) — 3KB

01 Entry

Item 1.01 Entry Into a Material Definitive Agreement. The information set forth in Item 1.02 below is incorporated by reference into this Item 1.01.

02 Termination

Item 1.02 Termination of a Material Definitive Agreement. On January 9, 2024, Canopy Growth Corporation (the "Company"), entered into Subscription Agreements (collectively, the "Subscription Agreements") with certain institutional investors (collectively, the "Investors") pursuant to which the Company agreed sell to the Investors an aggregate of 6,993,007 units (each a "Unit" and, collectively, the "Units") of the Company at a price of $4.29 per Unit in a private placement (the "Private Placement") for approximate gross proceeds of US$30 million. Following the announcement of the Private Placement and prior to closing, the Company received information from a third party that such third party could not complete certain tasks in a timely manner, which would result in delays outside of the Company's control and impact the Company's ability to satisfy customary closing requirements. Due to this, and based on mutual agreement with the Investors, the Company terminated the Subscription Agreements on January 12, 2024. As a result of such termination, no securities will be sold pursuant to the Private Placement. The Company expects to be in position to complete customary closing requirements in the next few weeks, and the Company continues to have sufficient liquidity, including through its cash on hand, debt facilities, and other expected sources of financing. The Company expects to report its fiscal third quarter financial results on February 9, 2024. Each Unit was to be comprised of (a) one common share of the Company (a "Common Share") and (b) either (i) one Series A Common Share purchase warrant (a "Series A Warrant") or (ii) one Series B Common Share purchase warrant (a "Series B Warrant" and, together with the Series A Warrants, the "Warrants"). Each Warrant was to entitle the holder to acquire one Common Share from the Company at a price equal to US$4.83. The Series A Warrants were to be exercisable immediately following the closing of the Private Placement for a

02 Unregistered Sales of Equity

Item 3.02 Unregistered Sales of Equity Securities. The information set forth in Item 1.02 above and Item 8.01 below related to the Private Placement are incorporated by reference into this Item 3.02. The issuance of the Common Shares and the Warrants underlying the Units and the Common Shares underlying the Warrants was to be made in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

01 Other Events

Item 8.01 Other Events. In connection with the Private Placement, the Company entered into an engagement letter with the Placement Agents (the "Engagement Letter"), pursuant to which the Company agreed to pay the Placement Agents a cash fee equal to 4.5% of the gross proceeds received by the Company in the Private Placement (the "Cash Fee"), in addition to the reimbursement for certain reasonable expenses. The Engagement Letter contains customary representations, warranties, terms and conditions, including for indemnification of the Placement Agents by the Company. Because the Private Placement did not close, no proceeds were received by the Company and no Cash Fee is owed to the Placement Agents. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CANOPY GROWTH CORPORATION /s/ Judy Hong Dated: January 12, 2024 By: Judy Hong Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR