Aurora Cannabis Inc. is acquiring an initial 9.14% stake in CTT Pharmaceutical Holdings Inc. through a nonbrokered private placement in the form of a $1 million convertible debenture.
The debentures will mature three years from the closing date of the offering and will bear an annual interest of 5.0%, payable semiannually. The debentures will be convertible into CTT common shares at a conversion price of 26.8 cents apiece.
Under the agreement, Canadian medical marijuana producer Aurora will receive warrants to increase ownership in CTT to 42.5%. Each warrant provides Aurora with the right to purchase 1 CTT common share at a price of 35 cents.
The initial investment provides Aurora with the right to appoint one member of CTT's board. Upon owning 42.5% of the Ottawa-based drugmaker, Aurora would have the right to appoint a second board member.
Additionally, Aurora and CTT will expand and complete a final commercial agreement, in which CTT will now provide Aurora with global exclusivity — instead of in Canada alone — to develop, manufacture and market CTT's oral thin films wafers.
The companies will work jointly toward obtaining Health Canada approval for introduction of the new products on the Canadian market, as well as obtaining commercial access to other international jurisdictions in which Aurora is active.
