LONDON - Akanda Corp. (NASDAQ: AKAN), an international medical cannabis company, has secured approximately $1.5 million through a registered direct offering, as announced today. This capital raise involves the sale of over 2.4 million common shares and more than 12 million pre-funded warrants to an accredited investor, with the transaction expected to close on or about today.
The offering was priced at the minimum price permissible under Nasdaq rules, with common shares sold at $0.1031 each and pre-funded warrants at $0.103 per share. These warrants are immediately exercisable at a nominal price of $0.0001 and are subject to certain ownership limitations.
Univest Securities LLC served as the exclusive financial advisor for the offering. The gross proceeds, before accounting for the financial advisor fees and other related expenses, are estimated to be around $1.5 million. Akanda intends to allocate the net proceeds for general working capital and corporate expenses.
This offering follows a previously declared effective shelf registration statement by the Securities and Exchange Commission (SEC) on January 29, 2024. The final prospectus supplement related to the offering will be filed with the SEC and made available on its website.
Akanda's portfolio includes CanMart, a UK-based pharmaceutical importer and distributor, and partnerships with Cellen Life Sciences' Leva Clinic, a digital pain clinic. Additionally, the company has acquired rights to develop farming property in British Columbia, Canada, for THC and CBD facilities.
The information in this article is based on a press release statement from Akanda Corp.
InvestingPro Insights
Akanda Corp. (NASDAQ: AKAN), while taking strides to secure funding for its operations, faces significant challenges as reflected in the data and insights provided by InvestingPro. The company's market capitalization stands at a modest $1.12 million, highlighting its relatively small size in the competitive cannabis market. The financial metrics indicate a company that is not profitable, with a negative price-to-earnings (P/E) ratio of -0.02 for the last twelve months as of Q4 2023, which further adjusted to -0.08, underscoring the company's earnings struggles.
The revenue for Akanda has also seen a decline, with a -17.55% change over the last twelve months as of Q4 2023, and a more precipitous quarterly drop of -70.05% in Q4 2023. This is in line with one of the InvestingPro Tips, which notes that Akanda is quickly burning through cash. The gross profit margin stands at a mere 5.16%, reinforcing another InvestingPro Tip that points out the company's weak gross profit margins.
Despite recent capital raising efforts, Akanda's share price performance has been lackluster, with significant declines over various timeframes, including a -87.62% return over the last year. This aligns with multiple InvestingPro Tips that highlight the stock's price decline over the last year, three months, and five years. However, there has been a strong return over the last month and week, with price total returns of 26.79% and 34.93% respectively, suggesting some recent investor optimism.
Investors considering Akanda Corp. should be aware of the company's high-risk profile, as it operates with a significant debt burden and its short-term obligations exceed its liquid assets. For those looking for more comprehensive analysis, InvestingPro offers additional tips on Akanda. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to valuable insights that could shape their investment decisions.
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