Nextleaf Solutions Ltd (CSE:OILS, OTCQB:OILFF) said it has entered into an engagement letter with Research Capital Corporation in respect of a marketed public offering of units of the company for minimum aggregate gross proceeds of $3 million.
The agent has agreed to act as sole agent and bookrunner on a best efforts basis to offer for sale the units at an indicative price of $0.20 each, as determined in the context of the market.
Each unit will be comprised of one common share in the capital of the company and one common share purchase warrant. Each warrant will be exercisable to acquire one common share at an indicative exercise price of $0.275 each for a period of 24 months following the closing of the offering. The definitive structure, including the exercise price and the expiry date of the warrants will be determined in the context of the market.
Nextleaf said it intends to use the net proceeds of the offering for the procurement and delivery of its cannabis products to various provincial markets nationally, for the partial repayment of principal and interest on a senior secured convertible note of the company, for general and administrative expenses and for working capital and general corporate purposes.
READ: Nextleaf Solutions says its new Glacial Gold products will soon be available coast to coast in Canada
The company has granted the agent an option to purchase up to an additional 15% of the units, and/or the components thereof, offered on the same terms and conditions, exercisable at any time, in whole or in part, for a period of 30 days following the closing of the offering for over-allotment and market stabilization purposes.
The offering is expected to close on or about December 16, 2021, and is subject to the company fulfilling certain conditions and receiving all necessary regulatory and stock exchange approvals.
The units will be offered by way of the Supplement to the Prospectus, to be filed in all provinces of Canada other than Québec, and accordingly will not be subject to a statutory or exchange four-month hold in the offering jurisdictions.
The units may also be offered in the United States on a non-brokered private placement basis on the same terms as the offering under applicable exemptions from the registration requirements of the United States Securities Act of 1933, as amended and applicable state securities laws, and in other offshore jurisdictions provided that no prospectus filing or comparable obligation arises.
In connection with the offering, Nextleaf said it will pay to the agent a cash commission equal to 8.0% of the gross proceeds from the offering, including pursuant to the exercise of the over-allotment option, which will be reduced in respect of sales of units to persons identified by the company to the agent under a president’s list.
The company will also issue to the agent such number of non-transferable broker warrants equal to 8.0% of the total number of units sold under the offering, including under the exercise of the over-allotment option, which will be reduced in respect of sales of units to persons identified by the company to the agent under a president’s list.
Each broker warrant will entitle the holder to acquire one unit at an exercise price equal to the offering price at any time prior to 5.00pm Toronto time on the expiry date of the warrants. In addition, the company has agreed to pay the agent a corporate finance fee of $100,000 plus HST, which shall be payable on closing through the issuance ofc common shares at a price equal to the offering price.
The securities to be offered have not been, and will not be registered under the US Securities Act or under any US state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of US persons, absent registration or an applicable exemption from such registration requirements.
The company also said it will host a conference call this afternoon, Tuesday, December 7, 2021, at 4.15pm EST. Investors or members of the public who wish to dial in, can join the webinar by registering via the following link: https://us02web.zoom.us/webinar/register/1716388243445/WN_1RqmLXwbRZmmo7q2c4qwGA
Nextleaf is a federally regulated producer of cannabis oil that distributes CBD and THC vapes and distilled oils under its award-winning prohibition-era brand, Glacial Gold. The company’s patented closed-loop automated extraction plant in Metro Vancouver efficiently transforms cannabis and hemp grown in British Columbia and throughout Canada into high-purity cannabis distillate at an industrial scale.
The company is developing proprietary delivery technology and formulations through its Health Canada Research Licence with sensory evaluation of cannabis via human testing. Nextleaf owns 17 US patents and has been issued 95 patents globally.
Contact the author at jon.hopkins@proactiveinvestors.com