NEW YORK - Akanda Corp. (NASDAQ: AKAN), an international medical cannabis company, has struck a deal with Univest Securities, LLC to secure $1.5 million through an underwritten public offering. The agreement, announced today, involves the sale of 1.5 million common shares or equivalent pre-funded warrants at $1.00 per share or $0.9999 per warrant.
The transaction is slated to close around October 3, 2024, contingent on customary closing conditions. Akanda intends to allocate the net proceeds to various corporate activities, including capital expenditures, enhancing operational capacity, general corporate purposes, and potential acquisitions. Additionally, the funds may be used for milestone payments related to an option to purchase Canadian property, refinancing, or repaying existing debts.
This offering follows the SEC's declaration of effectiveness for Akanda's registration statement on Form F-1 on September 30, 2024. A final prospectus detailing the offering will be available on the SEC's website.
Akanda, with its presence in Europe and North America, focuses on the cultivation and distribution of high-quality medical cannabis and wellness products. The company emphasizes safe, reliable access to cannabis products and champions sustainable business practices.
The announcement includes forward-looking statements, which are subject to risks and uncertainties and should not be regarded as guarantees of future performance. These statements reflect Akanda's current expectations regarding future events and financial performance.
The offering is strictly in compliance with the registration requirements of the Securities Act of 1933, as amended. It is noted that this press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction where such an offer or sale would be unlawful.
This news article is based on a press release statement from Akanda Corp. and includes no endorsement of the company's claims.
In other recent news, Akanda Corp. has successfully secured a hemp cultivation license in Canada, marking a significant milestone in its expansion within the Canadian cannabis industry. This development aligns with Akanda's strategic partnership with 1107385 B.C. LTD, reinforcing its commitment to becoming a global leader in the cannabis sector.
The license acquisition allows Akanda to advance its strategic vision by establishing THC and cannabinoid (CBD) facilities on a farming property in British Columbia. This move is integral to Akanda's overarching strategy to enhance access to high-quality, affordable cannabis products.
Akanda's existing portfolio includes CanMart, a pharmaceutical importer and distributor based in the UK, and partnerships with Leva Clinic, a pioneering digital pain clinic in the UK. These partnerships are part of Akanda's seed-to-patient supply chain, designed to ensure the quality and affordability of its products.
While Akanda's press release includes forward-looking statements regarding business strategy, product development, and growth, these are subject to various risks and uncertainties. Investors should monitor the company's announcements for the latest information.
These recent developments underscore Akanda's ongoing efforts to expand its global footprint in the cannabis sector. The company's entry into the Canadian market could potentially bolster its industry position, although the impact of this development will be revealed over time.
InvestingPro Insights
As Akanda Corp. (NASDAQ: AKAN) secures $1.5 million through a public offering, InvestingPro data reveals some concerning financial metrics that investors should consider. The company's market capitalization stands at a mere $2.11 million, reflecting its micro-cap status. This small size, coupled with the new offering, suggests potential dilution for existing shareholders.
InvestingPro Tips highlight that Akanda is "quickly burning through cash" and "operates with a significant debt burden." These factors may explain the company's need for additional funding through the public offering. The allocation of proceeds for various corporate activities, including potential debt repayment, aligns with these financial challenges.
Moreover, Akanda's revenue for the last twelve months as of Q4 2023 was $2.16 million, with a concerning revenue growth of -17.55% over the same period. This decline in revenue, combined with the InvestingPro Tip that the company "suffers from weak gross profit margins," raises questions about Akanda's operational efficiency and market position in the medical cannabis industry.
The stock's performance has been particularly troubling, with InvestingPro data showing a year-to-date price total return of -93.76% as of the latest available data. This aligns with another InvestingPro Tip stating that the "price has fallen significantly over the last year." Investors should weigh these factors carefully against the company's plans for using the newly raised capital.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Akanda Corp., providing a deeper understanding of the company's financial health and market position.
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