Red White & Bloom Brands Inc. Announces $15 Million Bought Deal Public Offering of Units
TORONTO, Aug. 19, 2020 (GLOBE NEWSWIRE) — Red White and Bloom Brands Inc. (CSE: RWB and OTC:RWBYF) (“RWB” or the “Company”) is pleased to announce that it has entered into an agreement with PI Financial Corp. and Eight Capital to act as co-lead underwriters, on behalf of a syndicate of underwriters (collectively the “Underwriters”), pursuant to which the Underwriters will purchase, on a bought deal basis, an aggregate of 20,000,000 units of RWB (the “Units”) at a price of $0.75 per Unit (the “Offering Price”) for aggregate gross proceeds of $15,000,000 (the “Offering”). The net proceeds of the Offering will be used for working capital and general corporate purposes.
The Units will be offered by way of a short-form prospectus in all provinces of Canada except Quebec, and such other additional jurisdictions in Canada as agreed to by the Company and the Underwriter.
The Company has also granted the Underwriter an option to cover over-allotments (the “Over-Allotment Option”), which will allow the underwriters to offer up to an additional 15% of the Offering, on the same terms as the Units. The Over-Allotment Option may be exercised in whole or in part at any time up to 30 days following the closing date of the Offering, for any number of Units, Unit Shares, Warrants, or any combination thereof at a price equal to the Offering Price for a Unit and a price to be agreed upon for the Unit Shares and / or Warrants. If the Over-Allotment Option is exercised in full, the Company will receive an additional $2,250,000 in gross proceeds for total aggregate gross proceeds of $17,250,000.
Terms of the Offering
Each Unit shall consist of one common share of the Company (each, a “Unit Share”) and one transferable common share purchase warrant (each such warrant, a “Warrant”). Each Warrant shall be exercisable into one common share at an exercise price of $1.00 per common share for a period of 24 months from the Closing Date (the “Warrant Shares” or together with the Unit Shares, “Shares”). Following the Closing Date, if the daily volume weighted average trading price of the common shares of the Company on the Exchange (as defined below) for any 10 consecutive days equals or exceeds $1.50, the Company may, upon providing written notice to the holders of the Warrants, accelerate the expiry date of the Warrants to the date that is 30 days following the date of such written notice.
The Offering is expected to close on or about September 15, 2020, or such other date as agreed between the Company and the Underwriter, and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and other approvals including the approval of the CSE.
The Company has agreed to pay a cash commission of 6.0% of the gross proceeds of the Offering and will issue to the Underwriters compensation options (the “Compensation Options”) equal to 6.0% of the aggregate number of Units sold under the Offering (the “Underwriting Fee”). The Compensation Options will be exercisable into Units of the Company at a price per Compensation Options equal to the Offering Price for a period of 24 months from the closing of the Offering.
In light of the Offering, the Company no longer intends to rely on the blanket exemption order set out in BCI 51-517 – Temporary Exemption from Certain Corporate Finance Requirements with Deadlines during the Period from June 2 to August 31, 2020 of the British Columbia Securities Commission (and similar exemptions provided by the securities commissions of other provincial and territorial regulators) with respect to the filing of the Company’s interim financial statements and management’s discussion and analysis for the period ended June 30, 2020. The Company anticipates it will file such financial information in the normal time frame.
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
About Red White & Bloom Brands Inc.
The Company is positioning itself to be one of the top three multi-state cannabis operators active in the U.S. legal cannabis and hemp sector. RWB is predominately focusing its investments on the major US markets, including Michigan, Illinois, Massachusetts, California, and Florida with respect to cannabis, and the US and Internationally for hemp-based CBD products.
For more information about Red White & Bloom Brands Inc., please contact:
Tyler Troup, Managing Director
Circadian Group IR
Visit us on the web: www.RedWhiteBloom.com
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