Item 1.01 Entry into a Material Definitive Agreement.
Standby Equity Distribution Agreement (SEDA)
On May 29, 2020, Acreage Holdings Inc. (the "Company" or "we") entered into the
Standby Equity Distribution Agreement (the "SEDA") with SAFMB Concord LP
("SAFMB" or the "Institutional Investor"). pursuant to which we may, in our
discretion, periodically sell to the Institutional Investor, and pursuant to
which the Institutional Investor may, at its discretion, require us to sell to
it, up to $35.0 million of our Class E subordinate voting shares (each, a "Fixed
Share") and up to $15.0 million of our Class D subordinate voting shares (each,
a "Floating Share"). For each Fixed Share or Floating Share purchased under the
SEDA, the Institutional Investor will pay us the greater of (i) 95% of the
lowest daily volume weighted average price of the Fixed Shares or Floating
Shares on the Canadian Securities Exchange or other principal market on which
the Fixed Shares or Floating Shares are traded (the "Principal Market") for the
five consecutive trading days immediately following the date we or the
Institutional Investor delivers notice requiring the Institutional Investor to
purchase or us to sell the Fixed Shares or Floating Shares under the SEDA; or
(ii) the lowest price allowable under the rules of the Principal Market.
The Institutional Investor's obligation to purchase, and our obligation to sell,
Fixed Shares and Floating Shares under the SEDA is subject to certain
conditions, including obtaining requisite relief from applicable Canadian
securities regulators in respect of transactions of this nature, us filing and
maintaining the effectiveness of a registration statement, and a supplement to
our Canadian shelf prospectus, qualifying the issue of the commitment shares
described below and up to an aggregate of $35.0 million of Fixed Shares and
$15.0 million of Floating Shares sold under the SEDA, and is limited to $500,000
per advance.
On each of September 28, 2020 and January 25, 2021, we entered into letter
agreements (the "Letter Agreements") with the Institutional Investor extending
the termination deadline of the SEDA to the earliest of November 30, 2020 and
June 30, 2021, respectively, and the date that we have obtained both a receipt
from the Ontario Securities Commission for a short-form final base shelf
prospectus and a declaration from the United States Securities and Exchange
Commission that its registration statement is effective, in each case qualifying
an At-The-Market equity offering program.
The Letter Agreements are attached hereto as Exhibits 109.1 and 10.2 and are
incorporated by reference into this Item 1.01 of Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed as part of this Current
Report on Form 8-K.
Exhibit No. Description of Exhibit
10.1 Letter Agreement by and among the Company and SAFMB dated
September 28, 2020.
10.2 Letter Agreement by and among the Company and SAFMB dated
January 25, 2021.
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