The Valens Company Inc. (TSX:VLNS) said it has entered into an agreement with Stifel Nicolaus Canada Inc., on behalf of a syndicate of underwriters, under which they have agreed to purchase, on a 'bought deal' basis 12,122,000 units of the company at a price of $3.30 per unit, for aggregate gross proceeds of $40,002,600.
The company said it plans to use the net proceeds from the offering to continue to pursue strategic growth initiatives in North America, provide funding for opportunistic acquisitions and for general corporate purposes.
Each unit in the offering will be comprised of one common share in the capital of the company and one-half of one common share purchase warrant. Each warrant will be exercisable to acquire one common share for a period of 36 months following the closing of the offering at an exercise price of $4.15 per warrant share, subject to adjustment and acceleration in certain events.
READ: The Valens Company gets price target hike from Research Capital following Green Roads acquisition
In the event that the volume-weighted average trading price of the common shares exceeds $8.25 for ten consecutive trading days, the company may, within 10 business days of the occurrence of such event, deliver a notice to the warrant holders accelerating the expiry date to the date that is 30 days following the date of such notice.
The company also said it has granted the underwriters an over-allotment option, exercisable in whole or in part at any time on or up to 30 days after the closing of the offering, to purchase, or to find substituted purchasers for, up to an additional number of units equal to 15% of the number sold under the offering at the issue price to cover over-allotments, if any, and for market stabilization purposes.
The over-allotment option will be exercisable for units, common shares or warrants, or any combination thereof, and in the event that it is exercised in its entirety, the aggregate gross proceeds of the offering will be $46,002,990.
The offering is scheduled to close on or about June 1, 2021, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and the securities regulatory authorities.
The Valens Company is a leading manufacturer of cannabis products with a mission to bring the benefits of cannabis to the world. It provides proprietary cannabis processing services across five core technologies, in addition to best-in-class product development, formulation and manufacturing of cannabis consumer packaged goods.
The company's high-quality products are exclusively formulated for the medical, therapeutic, health and wellness, and recreational consumer segments, and are offered across numerous product formats, including oils, vapes, concentrates, edibles and topicals, as well as pre-rolls, with a focus on next-generation product development and innovation.
Its breakthrough patented emulsification technology, SōRSE by Valens, converts cannabis oil into water-soluble emulsions for seamless integration into a variety of product formats, allowing for near-perfect dosing, stability, and taste. In partnership with brand houses, consumer packaged goods companies and licensed cannabis producers around the globe, the company continues to grow its diverse product portfolio in alignment with evolving cannabis consumer preferences in key markets.
Through its wholly-owned subsidiary Valens Labs Ltd., the company is also setting the standard in cannabis testing and research and development with Canada's only ISO17025 accredited analytical services lab, named The Centre of Excellence in Plant-Based Science by partner and scientific world leader Thermo Fisher Scientific.
Contact the author at jon.hopkins@proactiveinvestors.com