Stem Holdings, Inc. (OTCQX: STMH) (CSE: STEM) (“Stem” or the “Company“) the first multi-state, integrated cultivation and omnichannel technology cannabis company, announced today that it has obtained a receipt for its final prospectus filed in each of the provinces of Canada, other than Québec (the “Final Prospectus“), and has entered into an agency agreement for its previously announced marketed public offering (the “Offering“) of units of the Company (the “Units“). Pursuant to the Offering, the Company will issue a minimum of 16,363,636 and a maximum of up to 17,272,728 Units at a price of $0.55 per Unit for minimum gross proceeds of $9,000,000 and maximum gross proceeds of up to $9,500,000, subject to the exercise of the Over-Allotment Option (as defined herein). The Company also announced that its registration statement on Form S-1, which was filed with the United States Securities and Exchange Commission in respect of the Offering, was declared effective on April 16, 2021.
Each Unit shall be comprised of one share in the common stock of the Company (each a “Unit Share“) and one share purchase warrant of the Company (each, a “Warrant“). Each Warrant will be exercisable to acquire one share in the common stock of the Company (each, a “Warrant Share“) for a period of 24 months following the Closing Date (as defined herein) at a price per Warrant Share of $0.68, subject to adjustment in certain events.
The Offering is being led by Canaccord Genuity Corp. (the “Agent“) on a ‘commercially reasonable efforts’ basis.
The Company has granted the Agent an option (the “Over-Allotment Option“) to purchase such number of additional Units as is equal to 15% of the number of Units sold pursuant to the Offering at the Offering Price, which Over-Allotment Option will be exercisable at any time and from time-to-time, for a period of 30 days following the Closing Date.
The net proceeds raised under the Offering will be used for working capital and in furtherance of some or all of the business objectives described in the Final Prospectus.
The Offering is expected to close on April 23, 2021 (the “Closing Date“) and is subject to certain conditions including, but not limited to the receipt of all necessary regulatory approvals including the approval of the Canadian Securities Exchange (the “Exchange“) and the applicable securities regulatory authorities.
The Company has given notice to list the Unit Shares and the Warrant Shares (including the Unit Shares and Warrant Shares issuable upon due exercise of the Over-Allotment Option) on the Exchange. Listing will be subject to the Company fulfilling all of the requirements of the Exchange.
