HempFusion (TSX:CBD.U, OTCQX:CBDHF) Wellness Inc. has announced the closing of its previously announced private placement which saw the company issue 11,770,000 units at a price of US$0.25 each for gross proceeds of approximately US$2.94 million.
The company said proceeds of the private placement will be used for general working capital and marketing initiatives. Each unit in the private placement is comprised of one common share of the company and one common share purchase warrant with each warrant exercisable to acquire one common share at a price of US$0.50 per common share for a period of four years from the date of issuance.
In a statement, Jason Mitchell, HempFusion (TSX:CBD.U, OTCQX:CBDHF)’s co-founder and chief executive officer (CEO) commented: “Our recent acquisitions of Apothecanna and Sagely Naturals have helped to round out our CBD brand portfolio, bringing HempFusion increased access to the female and Baby Boomer demographics, a greater online presence, and outstanding leadership and product additions.”
READ: HempFusion Wellness reveals US$2M strategic private placement
Mitchell added: “The proceeds from this Private Placement further strengthens our balance sheet and allows us to accelerate the build-out of our online and wholesale businesses even faster. The participation of Company management in the financing should provide further confidence to investors in our ability to achieve our previously communicated revenue guidance for 2021 and 2022.”
Directors and officers subscribed for 1,600,000 units at the purchase price of US$0.25 per unit, including CEO Jason Mitchell, Jon Visser, its chief operating officer and various members of the board.
Visser commented: “With our national retail footprint at more than 15,000 locations in the US and growing, the continued build-out of our international business progressing as planned, and both our direct-to-consumer and private label businesses experiencing continued growth, I believe the proceeds from this financing round can help to extend our distribution reach even further."
“Our continued growth is not reliant on any major changes in the regulatory environment, however, with congress currently reviewing two hemp-related Bills, we are well-positioned to experience additional growth should the situation change. In the meantime, we continue to build our product lines (including our new, popular gummy line) as well as increase our channel depth," he added.
The company paid finder’s fee in the aggregate amount of US$30,275 to certain finders and also issued an aggregate of 121,100 broker warrants in connection with the private placement, with each broker warrant exercisable for one unit at the exercise price of US$0.25 each for four years from the date of issuance.
Hempfusion also announced that Nick Grafton has resigned as a director of the company effective September 30, 2021. The company said its board of directors expressed their appreciation to Grafton for his contribution to the company.
HempFusion Wellness is a leading health and wellness company whose family of premium consumer brands include HempFusion, Sagely Naturals, Apothecanna, and Probulin Probiotics, one of the fastest-growing probiotics companies in the United States according to SPINs reported data.
Utilizing the power of whole-food hemp nutrition, the HempFusion family of brands’ product portfolio comprises 112 SKUs including USDA Organic Certified Tinctures, proprietary FDA Drug Listed Over-The-Counter (OTC) Topicals, probiotic supplements and skincare products, a Doctor/Practitioner line, a White Label division and more. With a strong focus on research and development, HempFusion Wellness has 43products under development.
Available from more than 15,000 US retail locations across all 50 states, HempFusion Wellness products are also available in China, Mexico, Ireland, United Kingdom, United Arab Emirates, South Korea and Canada and may be purchased online from each brand’s website, The Probulin Store on Amazon.com, Alibaba’s Tmall.com, the world’s largest cross-border online marketplace, and a multitude of additional e-commerce sites.
Contact the author at jon.hopkins@proactiveinvestors.com