Aleafia Health Announces Closing of $14.95 Million Bought Deal Offering, Including Full Exercise of the Over-Allotment Option

TORONTO, May 29, 2020 (GLOBE NEWSWIRE) -- Aleafia Health Inc. (TSX: AH) (OTC: ALEAF) (“Aleafia Health” or the “Company”) is pleased to announce that it has closed its previously announced bought deal offering for a total issuance today of 23,000,000 units (the “Units”) of the Company at a price of $0.65 per Unit for aggregate gross proceeds of $14,950,000 (the “Offering”), which includes the full exercise of the over-allotment option. The Offering was led by Eight Capital on behalf of a syndicate of underwriters including Canaccord Genuity Corp., BMO Capital Markets, Leede Jones Gable Inc., Raymond James Ltd., Mackie Research Capital Corp., and PI Financial Corp. (together, the “Underwriters”).

Each Unit consisted of one common share in the capital of the Company (a “Common Share”) and one-half of one Common Share purchase warrant (each whole warrant, a “Warrant”). Each Warrant shall entitle the holder thereof to purchase one Common Share at an exercise price of $0.80, for a period of 36 months following the closing of the Offering.

The Company has paid the Underwriters a cash fee of 6% of the aggregate gross proceeds, and an aggregate of 805,000 non-transferable compensation warrants, with each compensation warrant being exercisable into Units at a price of $0.65 for a period of 36 months following the closing of the Offering.

The Company intends to use the net proceeds of the Offering for working capital and general corporate purposes.

In connection with the Offering, effective May 27, 2020, the Company has changed its trading symbol from “ALEF” to “AH” and it is expected that the Warrants issued in connection with the Offering will commence trading on the Toronto Stock Exchange (the “TSX”) on the date hereof under the symbol “AH.WT.A”.  The Offering is subject to final acceptance of the TSX.

Gowling WLG (Canada) LLP acted as legal advisors to Aleafia Health and Cassels Brock & Blackwell LLP acted as legal advisors to the Underwriters on the Offering.

The Units, and securities underlying the Units, have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold in the United States, to or for the account or benefit of, persons in the United States or U.S. Persons (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act and in accordance with applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Units or the securities underlying the Units in any jurisdiction in which such offer, solicitation or sale would be unlawful.