Akanda Corp. Announces Pricing of Underwritten Public Offering

Rhea-AI Summary

Akanda Corp. (NASDAQ: AKAN) has announced the pricing of an underwritten public offering of 1,500,000 common shares (or pre-funded warrants) at $1.00 per share or $0.9999 per pre-funded warrant. The offering, underwritten by Univest Securities, , is expected to generate gross proceeds of approximately $1,500,000 before deducting fees and expenses.

The offering is set to close around October 3, 2024, subject to customary conditions. Akanda intends to use the net proceeds for capital expenditures, operating capacity, working capital, potential milestone payments for a Canadian property option, general corporate purposes, refinancing or repaying existing debt, and potential acquisitions.

The offering is made pursuant to an effective registration statement on Form F-1 declared effective by the SEC on September 30, 2024. A final prospectus will be filed with the SEC and available on their website.

Positive

• Secured $1,500,000 in gross proceeds through public offering
• Funds to be used for capital expenditures and operating capacity
• Potential for acquisitions of complementary products or technologies

Negative

• Potential dilution of existing shareholders' equity
• Increase in outstanding shares may negatively impact stock price
• Part of proceeds to be used for debt repayment rather than growth initiatives

Insights

Financial Analyst

This public offering by Akanda Corp. is a significant financial move, but it comes with mixed implications. The company is raising $1.5 million through the sale of 1.5 million common shares at $1.00 per share. While this injection of capital can provide short-term liquidity, it's important to note the potential dilution effect on existing shareholders.

The intended use of proceeds spans a wide range of purposes, including capital expenditures, working capital and potential acquisitions. This broad allocation suggests the company is looking to strengthen its operational base and possibly expand, which could be positive for long-term growth. However, the mention of refinancing existing debt raises questions about the company's current financial health.

For investors, it's important to consider that at a market cap of about $2.85 million, this offering represents a significant portion of the company's value. The pricing at $1.00 per share also indicates potential downward pressure on the stock price in the short term. While the capital raise may provide necessary funds for growth, investors should carefully evaluate the company's ability to generate returns on this investment.

Legal Expert

The legal aspects of this public offering are noteworthy. Akanda has filed an effective registration statement on Form F-1 with the SEC, which is a important step in compliance with U.S. securities laws. This transparency is positive for investor protection and regulatory adherence.

However, the inclusion of pre-funded warrants as an alternative to common shares adds complexity to the offering structure. These instruments can provide flexibility for certain investors but may also complicate the company's capital structure and future dilution calculations.

The disclaimer at the end of the press release is standard legal language to prevent any misinterpretation of the announcement as a direct offer or solicitation to buy securities. This is in line with SEC regulations and helps protect the company from potential legal issues.

Investors should be aware that while the registration statement has been declared effective, the final prospectus is yet to be filed. This document will contain more detailed information about the offering and associated risks, which will be important for making informed investment decisions.

London, United Kingdom--(Newsfile Corp. - October 2, 2024) - Akanda Corp. (NASDAQ: AKAN) ("Akanda" or the "Company"), an international medical cannabis company, today announced that it has entered into a firm commitment underwriting agreement with Univest Securities, LLC, as underwriter, whereby Univest has agreed to purchase 1,500,000 common shares (or pre-funded warrants in lieu thereof) at a public offering price of $1.00 per share or $0.9999 per pre-funded warrant in an underwritten public offering.

The gross proceeds to Akanda are estimated to be approximately $1,500,000 before deducting the underwriter fees and other offering expenses payable by the Company. The offering is expected to close on about October 3, 2024, subject to the satisfaction of customary closing conditions. Akanda plans to use the net proceeds from the offering for capital expenditures, operating capacity, working capital, potential milestone payments of the option to purchase agreement for certain Canadian property, general corporate purposes, and the refinancing or repayment of existing indebtedness and acquisitions of complementary products, technologies or businesses.

The securities described above are being offered by Akanda pursuant to an effective registration statement on Form F-1, as amended (File No. 333-281945), declared effective by the U.S. Securities and Exchange Commission ("SEC") on September 30, 2024. A final prospectus relating to the offering will be filed with the SEC and will be available free of charge on the SEC's website at http://sec.gov.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended.

About Akanda Corp.

Akanda Corp. is an international cannabis company with operations in Europe and North America. The company is dedicated to cultivating and distributing high-quality medical cannabis and wellness products that improve lives. Akanda's mission is to provide safe, reliable, and accessible cannabis products to consumers worldwide while promoting sustainable business practices.

Connect with Akanda: Email | Website | LinkedIn | Twitter | Instagram

Investor Contact

Katie Field, CEO
ir@akandacorp.com

Cautionary Note Regarding Forward-Looking Information and Statements

This press release contains certain "forward-looking information" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Akanda's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Akanda's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved" and similar expressions and include statements regarding the timing and completion of the proposed offering. Forward-looking information may relate to anticipated events or results including, but not limited to business strategy, product development and sales and growth plans. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Akanda does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/225329

FAQ

What is the price per share for Akanda's (AKAN) public offering?

Akanda Corp. (NASDAQ: AKAN) has priced its public offering at $1.00 per common share or $0.9999 per pre-funded warrant.

How many shares is Akanda (AKAN) offering in its public offering?

Akanda Corp. is offering 1,500,000 common shares (or pre-funded warrants in lieu thereof) in its underwritten public offering.

When is the expected closing date for Akanda's (AKAN) public offering?

The public offering is expected to close on or about October 3, 2024, subject to the satisfaction of customary closing conditions.

How does Akanda (AKAN) plan to use the proceeds from its public offering?

Akanda plans to use the net proceeds for capital expenditures, operating capacity, working capital, potential milestone payments, general corporate purposes, refinancing or repayment of existing debt, and potential acquisitions.