The Valens Company (TSX:VLNS, OTCQX:VLNCF) Inc said it has entered into an agreement with Stifel Nicolaus Canada Inc and AGP/Alliance Global Partners, on behalf of a syndicate of underwriters, for a 'bought deal' offering to raise aggregate gross proceeds of C$28.125 million, or approximately US$22.5 million.
The company said it plans to use the net proceeds from the offering to continue to pursue strategic growth initiatives in North America, provide financing for working capital and for general corporate purposes.
Under the offering, the underwriters have agreed to purchase, on a bought deal basis, 10,613,207 units of the company at a price of $2.65 per unit.
Each unit will comprise 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 additional common share for a period of 48 months following the closing of the offering at an exercise price of $3.20 per warrant share, subject to adjustment in certain events.
READ: The Valens Company reports continued growth in market share
The company has granted the underwriters an option to purchase up to such number of additional units of the company as is equal to 15% of the units sold pursuant to the offering at the issue price to cover overallotments, if any, and for market stabilization purposes.
The overallotment option shall be exercisable in whole or in part, at any time, and from time to time, for a period of 30 days following the closing for any number of units, common shares, warrants or any combination thereof at a price equal to the issue price for a unit and a price to be agreed upon for the common shares and warrants.
Closing of the offering is expected to occur on or about April 5, 2022, and is subject to a number of customary conditions, including, without limitation, receipt of all regulatory and stock exchange approvals.
The company will apply to list the common shares to be issued in the offering on the Toronto Stock Exchange, subject to customary listing conditions. The common shares (including the warrant shares) will also be listed on The Nasdaq Capital Market and the company will make all required notifications (if any) to Nasdaq in connection with the offering.
The Valens Company is a manufacturer of cannabis products. It provides proprietary cannabis processing services, in addition to product development, manufacturing and commercialization of cannabis consumer-packaged goods.
The company's products are formulated for the medical, health and wellness, and recreational consumer segments, and are offered across all cannabis product categories with a focus on quality and innovation.
The company also manufactures, distributes and sells a wide range of CBD products in the United States through its subsidiary Green Roads, and distributes medicinal cannabis products to Australia through its subsidiary Valens Australia.
Contact the author at jon.hopkins@proactiveinvestors.com