WeedMD (TSXV: WMD) this morning issued an update to the $17.5 million bought deal financing announced by the company a month ago. The financing has seen a reduction in both the total funds to be raised as well as the price per unit being offered by the firm.
It’s unclear why the company was forced to reduce the price of units offered under the financing, however it is likely associated with the weakness since exhibited by the equity. Unit pricing fell from $0.82 per unit to that of $0.48 per unit, with the pricing of the attached warrant also falling quite notably.
WeedMD will now look to raise $15.0 million via the sale of 31.3 million units of the company, with each unit containing one common share and one half of a common share purchase warrant. Each warrant is valid for a period of two years and contains an exercise price of $0.60 per common share.
Warrants issued under the offering also contain an acceleration clause, enabling the forced acceleration of the expiry date in the event that the equity trades above $0.96 for a period of ten days on a volume weighted basis.
Proceeds from the financing are to be used for working capital and general corporate purposes. The financing is slated to close March 12, 2021.
WeedMD last traded at $0.55 on the TSX Venture.
Information for this analysis was found via Sedar, and WeedMD Inc. The author has no securities related to this organization. WeedMD Inc was previously a client of CanaCom Group, the parent company of The Deep Dive. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.