This Prospectus Supplement of Aphria Inc. (the "Company", "we", "us", "our" or "Aphria" and similar terms) together with the Prospectus qualifies the periodic resale, from time to time, of up to 9,823,183 common shares in the capital of the Company (collectively, the "Resale Shares", each a "Resale Share"), held by the selling shareholders named in this Prospectus Supplement under the heading "Selling Shareholders" (the "Selling Shareholders") during the balance of the 25-month period that the Prospectus, including any amendments thereto, remains valid (the "Offering"). See "Plan of Distribution".
This Prospectus Supplement has been prepared in connection with registration rights provided by us to the Selling Shareholders under an agreement of merger and acquisition dated November 4, 2020 (the "Acquisition Agreement") with, among others, SW Brewing Company, LLC ("Sweetwater") in respect of the acquisition of Sweetwater for aggregate consideration of US$300 million and up to an additional US$66 million of additional cash under an earn-out through the end of the calendar year 2023 (the "Sweetwater Transaction"). See "Recent Developments" and "Plan of Distribution". The Company completed the acquisition of Sweetwater on November 25, 2020 in accordance with the Acquisition Agreement, pursuant to which the Company acquired a 100% interests in Sweetwater and, as partial consideration for this acquisition, issued the Resale Shares to the Selling Shareholders. The Company agreed in the Acquisition Agreement to register the resale by the Selling Shareholders of their Resale Shares and to bear certain related fees and expenses, as described below under "Selling Shareholders".
The common shares of the Company (the "Common Shares"), are listed and posted for trading on the Toronto Stock Exchange (the "TSX") and on The NASDAQ Global Select Market (the "NASDAQ") under the symbol "APHA". On November 25 and 26, 2020, being the last trading days prior to the date of this Prospectus Supplement on the NASDAQ and TSX respectively, the closing price of the Common Shares was US$7.01 and $9.41 on the NASDAQ and the TSX, respectively. The TSX has conditionally approved the listing of the Resale Shares to be distributed under this Prospectus Supplement on the TSX. Listing of the Resale Shares is subject to the Company fulfilling all of the requirements of the TSX and NASDAQ.
Investing in our securities involves a high degree of risk. See "Risk Factors" in this Prospectus Supplement and the Prospectus.
The Selling Shareholders may, from time to time, sell, transfer or otherwise dispose of any or all of the Resale Shares or interests in the Resale Shares on any stock exchange, market or trading facility in the United States on which the Resale Shares are traded or in private transactions within the United States. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. See "Plan of Distribution". This Prospectus Supplement has not been filed in respect of, and will not qualify, any distribution of the Resale Shares in any province or territory of Canada at any time. The Company will not receive any of the proceeds from the sale or other disposition of the Resale Shares by the Selling Shareholders. The net proceeds received from the sale or other disposition of the Resale Shares by the Selling Shareholders, if any, is unknown. See "Selling Shareholders" for further information.
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NO UNDERWRITER HAS BEEN INVOLVED IN THE PREPARATION OF THIS PROSPECTUS SUPPLEMENT OR PERFORMED ANY REVIEW OF THE CONTENTS OF THIS PROSPECTUS SUPPLEMENT. THE COMPANY HAS NOT ENGAGED IN THE BUSINESS OF TRADING AND ADVISING IN SECURITIES WITH RESPECT TO THE DISTRIBUTION OF THE RESALE SHARES.
An investment in the securities of the Company is speculative and involves a high degree of risk. You should carefully read the "Risk Factors" section in this Prospectus Supplement, the Prospectus, and the documents incorporated by reference herein and therein, as well as the information under the heading "Cautionary Note Regarding Forward-Looking Information" in this Prospectus Supplement and consider such notes and information in connection with an investment in the Resale Shares hereunder.
We are permitted, under a multijurisdictional disclosure system adopted by the securities regulatory authorities in Canada and the United States ("MJDS") to prepare this Prospectus Supplement and the Prospectus in accordance with the disclosure requirements of Canada. Prospective investors in the United States should be aware that such requirements are different from those of the United States. The financial statements incorporated by reference into this Prospectus Supplement and the Prospectus have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and are subject to Canadian auditing and auditor independence standards. As a result, such financial statements may not be comparable to financial statements of United States companies. Such financial statements are subject to Canadian generally accepted auditing standards and auditor independence standards, in addition to the standards of the Public Company Accounting Oversight Board (United States) and the United States Securities and Exchange Commission ("SEC") independence standards.
Purchasing the Resale Shares may subject you to tax consequences in both the United States and Canada. Such consequences, for investors who are resident in, or citizens of, the United States, may not be described fully in this Prospectus Supplement, including the Canadian federal income tax consequences. Investors should read the tax discussion in this Prospectus Supplement and the accompanying Prospectus and consult their own tax advisors with respect to their own particular circumstances. See "Certain Canadian Federal and U.S. Federal Income Tax Considerations".
Your ability to enforce civil liabilities under U.S. federal securities laws may be affected adversely by the fact that the Company is incorporated under the laws of the Province of Ontario, that some of the Company's officers and directors are residents of Canada, that all of the Company's assets and a substantial portion of the assets of said persons are located outside the United States and that some or all of the experts identified herein or in any Prospectus Supplement may be residents of Canada. See "Enforceability of Certain Civil Liabilities".
NEITHER THE SEC NOR ANY STATE OR CANADIAN SECURITIES REGULATOR HAS APPROVED OR DISAPPROVED THE SECURITIES OFFERED HEREBY, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR DETERMINED IF THIS PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Messrs. Irwin D. Simon, Tom Looney, Walter Robb and David Hopkinson are directors of the Company, and each resides outside of Canada. Each of Messrs. Simon, Looney, Robb and Hopkinson has appointed Aphria at 98 Talbot St. W., Leamington, Ontario, N8H 1M8, as his agent for service of process in Canada. You should be aware that it may not be possible for you to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.
The Company's head office is located at 98 Talbot Street West, Leamington, Ontario, N8H 1M8. The Company's registered office is located at 1 Adelaide Street East, Suite 2310, Toronto, Ontario, M5C 2V9.
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