MedReleaf (TSX:LEAF) has announced that it has entered into a revised agreement with a syndicate of underwriters co-led by Canaccord Genuity and GMP Securities whereby the underwriters will purchase on a bought deal basis an aggregate of 5 million units of the company at $26.50 per unit for gross proceeds of $132.5 million.
As quoted in the press release:
Each Unit will consist of one common share (a “Common Share”) and one-half of one common share purchase warrant (each full common share purchase warrant, a “Warrant”) of the Company. Each Warrant will be exercisable to acquire one common share of the Company for a period of two years following the closing date of the Offering at an exercise price of $34.50 per common share, subject to adjustment in certain events. In the event that the volume weighted average trading price of the Common Shares for ten (10) consecutive trading days exceeds $51.75, the Company shall have the right to accelerate the expiry date of the Warrants upon not less than fifteen (15) trading days’ notice.
The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 750,000 Units at the Offering Price, exercisable in whole or in part, at any time and from time to 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 $19,875,000 in gross proceeds will be raised pursuant to the Offering and the aggregate gross proceeds of the Offering will be $152,375,000.
The Units will be offered by way of a short form prospectus to be filed in all provinces of Canada (except Quebec). The Company intends to use the net proceeds from the Offering to finance the acquisition and/or construction of additional cannabis production and manufacturing facilities in Canada as well as in other jurisdictions with federal legal cannabis markets, where warranted by the opportunities available to MedReleaf, and the expansion of the Company’s marketing and sales initiatives.
The Offering is expected to close on or about January 31, 2018 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the Toronto Stock Exchange and the applicable securities regulatory authorities.