CareRx Corporation (TSX:CRRX) has announced plans to raise total gross proceeds of up to approximately $17.2 million via a private placement and an offering, assuming an over-allotment option is exercised in full.
The company said it intends to use the net proceeds of the offering and the private placement for debt reduction, working capital and general corporate purposes.
CareRx said it has entered into an agreement with a syndicate of investment dealers led by Cormark Securities Inc under which the underwriters have agreed to purchase 2,963,000 common shares from the treasury of the company, at a price of $2.70 per common share for total gross proceeds of approximately $8 million.
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In addition, the company has granted the underwriters an over-allotment option to purchase up to an additional 444,450 common shares from its treasury at the offering price for additional gross proceeds of up to approximately $1.2 million for market stabilization purposes and to cover over-allotments, if any. The over-allotment option is exercisable, in whole or in part, by the underwriters at any time up to 30 days following the closing of the offering.
Concurrent with the offering, CareRx has entered into a binding agreement to sell 2,963,000 common shares to an institutional investor under the same terms and conditions of the offering, on a private placement basis. The private placement is expected to close in two tranches, with the first tranche closing on the closing date of the offering and the second tranche expected to close on or before February 28, 2023.
Closing of the offering and the first tranche of the private placement is expected to occur on or about January 18, 2023, and is subject to customary conditions, including the receipt of all necessary regulatory approvals including that of the Toronto Stock Exchange.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent registration under US federal and state securities laws or compliance with an applicable exemption from such US registration requirements.
CareRx is Canada's leading provider of pharmacy services to seniors living communities. It serves over 95,000 residents in over 1,600 seniors and other congregate care communities - long-term care homes, retirement homes, assisted living facilities, and group homes. The company is a national organization with a large network of pharmacy fulfillment centres strategically located across the country.
Contact the author at jon.hopkins@proactiveinvestors.com