Chalice Brands Ltd. announces the closing of a private placement

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PORTLAND, Oregon, November 23, 2021 (GLOBE NEWSWIRE) – Chalice Brands Ltd. (CSE: CHAL) (OTCQB: CHALF) (“Chalice“or the”Society“), a leading consumer-focused cannabis company specializing in retail, production, processing, wholesale and distribution, today announced the closing of its previously announced negotiated private placement unsecured convertible debenture units and capital units (the “Offer“) led by Canaccord Genuity Corp. (“Canaccord Genuity“or the”Agent“) as sole agent and bookkeeper.

In connection with the offering, the Company issued, for gross proceeds of C $ 5.7 million: (a) 4,025 units of debentures (the “Debenture Units“) of the Company, each unit of debenture consisting of (i) an unsecured convertible debenture with a principal amount of C $ 1,000 (each, a”Debenture“and collectively, the”Debentures“) and (ii) 500 warrants of the Company (each warrants, a”To guarantee“); and (b) 2,285,933 equity shares (the”Equity shares“) of the Company, at a price equal to C $ 0.75 per share of equity (the”Share issue price“), each equity unit consisting of (i) one ordinary share of the Company (each, a”Ordinary share“) and (ii) half a warrant (1/2). A total of 200,000 of these equity shares were issued as part of a simultaneous placement without an intermediary.

The Debentures will mature on November 23, 2024 (the “Due date“) and bear interest at the rate of 10% per annum from the closing date, calculated and payable semi-annually. The principal amount of the Debentures, or any part thereof, may be converted at the option of the holder into common shares at a conversion price of C $ 1.00 per share (the “”Conversion price “) at any time before the due date. The Company may, at its option, elect to discharge its obligation to pay the principal amount of the debentures at maturity by delivering the number of common shares obtained by dividing the principal amount of the debentures to be honored by 95% of the average price volume. weighted (the “VWAP“) for the 30 consecutive trading days ending five trading days preceding the due date, subject to the minimum price permitted by the policies of the Canadian Stock Exchange. In addition, the Company may elect to settle and pay accrued but unpaid interest on debentures by delivering: (i) cash, or (ii) the number of common shares obtained by dividing the amount of interest by 95% of the VWAP for the 20 consecutive trading days ending five days prior to the applicable date, or any combination thereof, subject to the minimum price permitted by CSE policies.

If at any time after the date that is four (4) months after the Closing Date, the VWAP of the Common Shares exceeds C $ 1.50 for 10 consecutive Trading Days, the Company will have the option to convert any the principal amount of the convertible debentures then outstanding at the conversion price.

Each warrant confers on its holder the right to acquire one ordinary share (a “Warrant share“) at a price of Cdn $ 1.10 per Warrant Share for a period of 24 months from the date of closing of the offering.

The Company: (i) paid the Agent a cash commission equal to 5% of the total gross proceeds from the sale of debenture units (reduced to 2% for subscribers identified on the list of the President of the Company ) and 7% of the total gross proceeds from the sale of capital units (reduced to 2% for subscribers identified on the list of the President of the Company); and (ii) issued to the Agent such number of non-transferable indemnity warrants (the “”Agent mandates“) such that it is equal to 5% of the total gross proceeds from the sale of debenture units divided by the issue price of the shares (reduced to 2% for subscribers identified on the list of the chairman of the Company) and 7% of the number of share units issued in the Offer (reduced to 2% for subscribers identified on the list of the President of the Company). Each agent’s warrant will entitle its holder to acquire a share of equity at an exercise price equal to the issue price of equity for a period of 24 months from the closing date of the placement.

The Company intends to use the net proceeds of the Offering for strategic acquisitions of retail licenses and for general corporate purposes.

Chalice Brands Ltd.
Chalice Brands is a leading consumer-focused production, processing, wholesale, distribution and retail cannabis company, with twelve dispensaries owned and four dispensaries under management in Oregon. The Company is committed to developing a dynamic portfolio built around the recognized brands of Chalice Farms, with a focus on health and wellness. Chalice operates nationally through Fifth & Root and has operations in Oregon and California. Visit investors.chalicebrandsltd.com for regular updates.

Investor Relations:

Jean Varghese
Executive chairman
Chalice Brands Ltd.
971-371-2685
ir@chalicebrandsltd.com

Neither the Canadian Securities Exchange nor its regulatory services provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

Disclaimer: This press release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information includes, without limitation, statements regarding the future business activities of the Company, including the proceeds of the offering, the use of the proceeds of the offering, the opinions or beliefs of management and future business goals. Generally, forward-looking information can be identified by the use of forward-looking terms such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “expected”. , “Estimates”, “” foresees “,” intends “,” anticipates “or” does not anticipate “, or” believes “, or variations of these words and expressions or declares that certain actions, events or results “may”, “could”, “would”, “could” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors which may cause the actual results, level of activity, performance or achievements of the Company to differ materially from those expressed or implied by this forward-looking information. These risks include, without limitation, business, economic and competitive uncertainties, regulatory risks, market risks, risks inherent in manufacturing and retail operations such as unforeseen costs and production stoppages, difficulties in maintaining brand loyalty and other risks in the cannabis industry. Although the Company has attempted to identify important factors which could cause actual results to differ materially from those contained in forward-looking information, other factors may cause results not to be as anticipated, estimated or planned. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Therefore, readers should not place undue reliance on forward-looking information. Forward-looking information is provided herein for the purpose of presenting information about management’s current expectations for the future and readers are cautioned that such information may not be appropriate for other purposes. The Company does not undertake to update forward-looking information, except in accordance with applicable securities laws. This press release does not constitute an offer to sell any securities in the United States, and such securities may not be offered or sold in the United States absent registration or an exemption from registration or an authorization. exemption from registration.