WeedMD announces closing of $34.5-M deal

WeedMD Inc. a federally-licensed producer and distributor of medical cannabis, announces that it has closed its previously announced short form prospectus offering, including the full exercise of the over-allotment option. A total of 16,046,511 units of the company were sold at $2.15 per unit for combined gross proceeds of $34,500,000. This offering was completed by a syndicate of underwriters including Eight Capital as sole book runner and co-lead underwriter with Mackie Research Capital Corporation and Haywood Securities Inc.

Each unit consists of one common share of the company and one-half of one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of $2.90, until January 11, 2020. If, following the closing of the offering, the volume weighted average price of the common shares on the TSX Venture Exchange is equal to or greater than $4.20 for any 20 consecutive trading days, the company may, upon providing written notice to the holders of warrants, accelerate the expiry date of the warrants to the date that is 30 days following the date of the written notice.

As consideration for its services, the underwriters received a cash commission equal to 6% of the gross proceeds of the offering. The company also issued 481,395 compensation options to the underwriters in an amount equal to 3% of the number of units issued in accordance with the offering. Each compensation option is exercisable by one unit at the issue price, until January 11, 2020.

The company plans to use the net proceeds of such offering to expand its lease footprint and retrofitting plans and operations at its 14-acre Strathroy Greenhouse, to purchase and further develop its Aylmer Facility, to pursue potential strategic domestic and international opportunities, and for working capital and general corporate purposes.

The units were offered and sold by a short form prospectus filed in each of the provinces of Canada, excluding Quebec, and offered and sold elsewhere outside of Canada on a private placement basis.

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