CanaFarma Hemp Products Corp (CSE:CNFA, FRA:4K9) said it has amended the terms of its previously announced non-brokered private placement to raise approximately CA$5 million to provide a working capital loan to Vertical Wellness Inc and to fund other potential acquisitions.
The company which offers a range of hemp-related services, including growing, processing, and selling hemp-based products to consumers, said the amended private placement will consist of an offering of up to 52,631,578 units at an issue price of C$0.095 per unit.
Each unit will consist of one common share and one-half of one share purchase warrant. Each whole warrant will be exercisable into one share for a period of 36 months following the closing of the private placement at an exercise price of C$0.125 per warrant share.
READ: CanaFarma signs MOU to acquire branded health company Vertical Wellness
All securities to be issued under the private placement will be subject to a four-month-and-one-day statutory hold period in accordance with applicable securities laws, said the company. Subject to standard customary closing conditions and filings with the Canadian Securities Exchange, the first tranche of the private placement is expected to close on or before August 19, 2021.
CanaFarma said it plans to use the proceeds to provide a working capital loan to Vertical Wellness Inc. On June 30, CanaFarma announced that it signed a memorandum of understanding (MOU) to acquire Vertical Wellness, a leader in the branded health and wellness space. CanaFarma said the combined company is anticipated to have a market capitalization of about $50 million. CanaFarma also said that the proceeds will fund “other potential acquisitions and meet general working capital needs.”
The securities to be issued have not been and will not be registered under the US Securities Act of 1933, as amended, or under any state securities laws, the company added.
New York-based CanaFarma is a full-service company operating in the hemp industry offering a full range of hemp-related products and services to the consumer wellness market.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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