WeedMD Inc. (CVE:WMD) said it has entered into a letter of engagement with Eight Capital, as joint bookrunner and co-lead underwriter along with Canaccord Genuity Corp., for a ’bought deal’ placement to raise gross proceeds of $15,000,260.
The company said the underwriters will buy for sale 18,293,000 units of the company at a price of $0.82 per unit. WeedMD said it intends to use the net proceeds of the offering for working capital and general corporate purposes.
It has also agreed to grant Eight Capital an over-allotment option to purchase up to an additional 15% of the units at the same price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the offering. If this option is exercised in full, an additional approximately $2,250,000 will be raised and the aggregate proceeds of the offering will be approximately $17,250,300.
Each unit in the offering will be comprised of one common share of the company and one-half of one common share purchase warrant. Each warrant entitles the holder to purchase one WeedMD common share at an exercise price of $1.00, for a period of 24 months following the closing of the offering.
If, after the one-year anniversary of the closing of the offering, the daily volume-weighted average trading price of WeedMD shares on the TSX Venture Exchange for any 10 consecutive days equals or exceeds $1.64, the company may, upon providing written notice to the holders of the warrants, accelerate the expiry date to the date that is 30 days following the date of such written notice.
The closing date of the offering is scheduled to be on or about March 4, 2021, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the applicable securities regulatory authorities.
WeedMD is the publicly traded parent company of WeedMD RX Inc. and Starseed Medicinal Inc., licence holders producing and distributing cannabis products for both the medical and adult-use markets.
The company owns and operates a 158-acre state-of-the-art greenhouse, outdoor and processing facility located in Strathroy, Ontario as well as a fully-licensed 26,000 square-foot processing facility in Aylmer, Ontario, specializing in cannabis extraction.
With the addition of Starseed, a medical-centric operator, WeedMD has expanded its multi-channelled distribution strategy. Starseed’s industry-first, exclusive partnership with LiUNA, the largest construction union in Canada, along with employers and union groups complements WeedMD’s direct sales to medical patients.
The company maintains strategic relationships in the seniors’ market and supply agreements with Shoppers Drug Mart as well, as seven provincial distribution agencies where adult-use brands Color Cannabis and Saturday are sold.
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Story by ProactiveInvestors
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