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 firstname.lastname@example.org 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 email@example.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.
About The Valens Company
The Valens Company is a global leader in the end-to-end development and manufacturing of innovative, cannabinoid-based products. The Valens Company is focused on being the partner of choice for leading Canadian and international cannabis brands by providing best-in-class, proprietary services including CO2, ethanol, hydrocarbon, solvent-less and terpene extraction, analytical testing, formulation and product development and custom manufacturing. Valens is the largest third-party extraction company in Canada with an annual capacity of 425,000 kg of dried cannabis and hemp biomass at our purpose-built facility in Kelowna, British Columbia which is in the process of becoming European Union (EU) Good Manufacturing Practices (GMP) compliant. The Valens Company currently offers a wide range of product formats, including tinctures, two-piece caps, soft gels, oral sprays and vape pens as well as beverages, concentrates, topicals, edibles, injectables, natural health products and has a strong pipeline of next-generation products in development for future release. Finally, The Valens Company’s wholly-owned subsidiary Valens Labs is a Health Canada licensed ISO 17025 accredited cannabis testing lab providing sector-leading analytical services and has partnered with Thermo Fisher Scientific to develop a Centre of Excellence in Plant-Based Science. For more information, please visit https://thevalenscompany.com. The Valens Company’s investor deck can be found specifically at https://thevalenscompany.com/investors/.
For further information, please contact:
The Valens Company
KCSA Strategic Communications
Phil Carlson / Elizabeth Barker
1 212.896.1233 / 1 212.896.1203
KCSA Strategic Communications
Notice regarding Forward Looking Statements
All information included in this press release, including any information as to the future financial or operating performance and other statements of The Valens Company that express management’s expectations or estimates of future performance, other than statements of historical fact, constitute forward-looking information or forward-looking statements within the meaning of applicable securities laws and are based on expectations, estimates and projections as of the date hereof. Forward-looking statements are included for the purpose of providing information about management’s current expectations and plans relating to the future. Wherever possible, words such as “plans”, “expects”, “scheduled”, “trends”, “indications”, “potential”, “estimates”, “predicts”, “anticipate”, “to establish”, “believe”, “intend”, “ability to”, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, or are “likely” to be taken, occur or be achieved, or the negative of these words or other variations thereof, have been used to identify such forward-looking information. Specific forward-looking statements include, without limitation, all disclosure regarding future results of operations, economic conditions and anticipated courses of action.
The risks and uncertainties that may affect forward-looking statements include, among others, regulatory risk, United States border crossing and travel bans, reliance on licenses, expansion of facilities, competition, dependence on supply of cannabis and reliance on other key inputs, dependence on senior management and key personnel, general business risk and liability, regulation of the cannabis industry, change in laws, regulations and guidelines, compliance with laws, reliance on a single facility, limited operating history, vulnerability to rising energy costs, unfavourable publicity or consumer perception, product liability, risks related to intellectual property, product recalls, difficulties with forecasts, management of growth and litigation, many of which are beyond the control of The Valens Company. For a more comprehensive discussion of the risks faced by The Valens Company, and which may cause the actual financial results, performance or achievements of The Valens Company to be materially different from estimated future results, performance or achievements expressed or implied by forward-looking information or forward-looking statements, please refer to The Valens Company’s latest Annual Information Form filed with Canadian securities regulatory authorities at www.sedar.com or on The Valens Company’s website at www.thevalenscompany.com. The risks described in such Annual Information Form are hereby incorporated by reference herein. Although the forward-looking statements contained herein reflect management’s current beliefs and reasonable assumptions based upon information available to management as of the date hereof, The Valens Company cannot be certain that actual results will be consistent with such forward-looking information. The Valens Company cautions you not to place undue reliance upon any such forward-looking statements. The Valens Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Nothing herein should be construed as either an offer to sell or a solicitation to buy or sell securities of The Valens Company.