The Valens Company Announces Approximately USD$22.5 Million Bought Deal Offering of Units

KELOWNA, BC, March 29, 2022 /CNW/ – The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) (the “Company“, “The Valens Company” or “Valens“), a leading manufacturer of cannabis products, is pleased to announce that it has entered into an agreement with Stifel Nicolaus Canada Inc. (“Stifel GMP“) and A.G.P./Alliance Global Partners (“AGP“, and together the “Co-Lead Underwriters“) on behalf of a syndicate of underwriters (together with the Co-Lead Underwriters, the “Underwriters“), pursuant to which the Underwriters have agreed to purchase, on a “bought deal” basis, 10,613,207 units (the “Units“) of the Company at a price of CDN$2.65 per Unit (the “Issue Price“) for aggregate gross proceeds to the Company of CDN$28,125,000 (approximately USD$22,500,000) (the “Offering“).

Each Unit will be comprised of one common share in the capital of the Company (a “Common Share“) and one-half of one Common Share purchase warrant (each whole Common Share purchase warrant, a “Warrant“). Each Warrant will be exercisable to acquire one additional Common Share (a “Warrant Share“) for a period of 48 months following the closing of the Offering (the “Closing“) at an exercise price of CDN$3.20 per Warrant Share, subject to adjustment in certain events.

The Company has granted the Underwriters an option (the “Over-Allotment 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 over-allotments, if any, and for market stabilization purposes. The Over-Allotment 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.

The Company plans to use the net proceeds from the offering to continue to pursue strategic growth initiatives in North America, provide funding for working capital and for general corporate purposes.

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 (including the Warrant Shares) to be issued in the Offering on the Toronto Stock Exchange (“TSX“), subject to customary listing conditions. The Common Shares (including the Warrant Shares) will also be listed on The Nasdaq Capital Market (“Nasdaq“) and the Company will make all required notifications (if any) to Nasdaq in connection with the Offering.

In connection with the Offering, the Company will file a prospectus supplement (the “Prospectus Supplement“) to its short form base shelf prospectus dated January 28, 2021, as amended and restated by the final short form base shelf prospectus of the Company dated March 28, 2022 (the “Base Shelf Prospectus“, and, together with the Prospectus Supplement, the “Prospectus“), with the securities commissions or similar securities regulatory authorities in each of the provinces in Canada (except Quebec). The Prospectus Supplement will also be filed with the U.S. Securities and Exchange Commission (the “SEC“) as part of the Company’s effective registration statement on Form F-10 (the “Registration Statement“) previously filed under the U.S./Canada multi-jurisdictional disclosure system. The Prospectus contains important detailed information about the Company and the Offering. Prospective investors should read the Prospectus, and the documents incorporated by reference therein and the free writing prospectus filed with the SEC on March 29, 2022, before making an investment decision. Copies of the Prospectus will be available on SEDAR at www.sedar.com and on the SEC’s website at www.sec.gov, and a copy of the Registration Statement is available on the SEC’s website at www.sec.gov.

Copies of the Prospectus Supplement and the Base Shelf Prospectus may also be obtained in the United States, upon request, from the offices of Stifel, Nicolaus & Company, Incorporated at Attention: Syndicate, One Montgomery Street, Suite 3700, San Francisco, CA 94104, by telephone at (415) 364-2720, or by email at syndprospectus@stifel.com and in Canada, upon request, from Stifel GMP by email at ECMCanada@stifel.com and from the offices of A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com.

No securities regulatory authority has either approved or disapproved of the contents of this press release. This press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor will there be any sale of the securities in any province, territory, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, territory, state or jurisdiction.