Charlotte’s Web Hemp (CNQ: CWEB) is, in a matter of speaking, teaming up with Canaccord Genuity Corp. It announced yesterday that Canaccord, in a role as a lead underwriter, is going to purchase five million units of the company’s share with other underwriters on an underwritten basis. The deal is worth $9.98 per share for a total of around $49.7 million.
The net proceeds of the venture will go toward funding CWH’s business development and to use for working capital purposes. Canaccord will offer the shares in each of Canada’s provinces, with the exception of Quebec, and might also be made available through private placement opportunities in the US, but only to “qualified institutional buyers.”
A press release on the arrangement adds, “Each Unit will be comprised of one common share of the Company (a “Common Share”) and one half of one common share purchase warrant (each full warrant, a “Warrant”). Each Warrant will be exercisable to acquire one common share (a “Warrant Share”) for a period of 2 years following the closing date of the Offering at an exercise price of C$16.50 per Warrant Share, subject to adjustment in certain events.
“Charlotte’s Web has also granted the Underwriters an option (the “Over-Allotment Option”) to purchase up to 750,000 additional Units of the Company on the same terms as the Offering. If the Over-Allotment Option is exercised in full, the aggregate gross proceeds of the Offering will be [$57.384 million].”
Closing of the offering will take place on or about December 3 of this year, but is still subject to regulatory conditions before being offered. Some of these conditions include “the receipt of all necessary regulatory and stock exchange approvals, including the approval of the Toronto Stock Exchange and the applicable securities regulatory authorities.”