NEW YORK - Akanda Corp (NASDAQ: AKAN), a medical cannabis company with international operations, has announced a registered direct offering to certain accredited investors, generating estimated gross proceeds of approximately $708,000. The offering includes the sale of 280,851 common shares at $0.406 each and pre-funded warrants to purchase an additional 1,462,991 common shares.
The purchase price for the pre-funded warrants is set at $0.0001 less than the common shares, with an exercise price of $0.0001 per share. These warrants can be exercised immediately and will remain exercisable until fully exercised, subject to specific beneficial ownership limitations.
Univest Securities LLC is serving as the financial advisor for this transaction. The offering is scheduled to close today, subject to customary closing conditions. Akanda intends to allocate the net proceeds for general corporate expenses and working capital.
Akanda's business model encompasses the entire seed-to-patient supply chain, including Holigen, a Portugal-based cultivator and distributor with EU GMP certified facilities; CanMart, a UK-based pharmaceutical distributor; and partnerships with recognized industry names such as Cookies, Cansativa Group, and Cellen Life Sciences' Leva Clinic.
The information in this article is based on a press release statement from Akanda Corp.
InvestingPro Insights
Amidst Akanda Corp's (NASDAQ: AKAN) recent financial maneuvers, a glance at the real-time data from InvestingPro reveals a nuanced picture of the company's financial health. With a notably small market capitalization of $1.59 million USD and a negative price-to-earnings (P/E) ratio of -0.1 for the last twelve months as of Q2 2023, investors may be cautious. This is further underscored by a Price / Book multiple of just 0.07, suggesting the market values the company at a significant discount to the book value of its assets.
The company has experienced an exponential revenue growth of 3466.29% over the last twelve months as of Q2 2023, which may capture the attention of growth-oriented investors. However, it's essential to consider the broader context provided by InvestingPro Tips. Akanda operates under a significant debt burden and has been quickly burning through cash, which could raise concerns about its ability to sustain such growth. Additionally, the company's short-term obligations exceed its liquid assets, indicating potential liquidity risks.
Investors considering AKAN should note that the company does not pay dividends, which aligns with its reinvestment and growth strategy but may be a drawback for income-seeking shareholders. For those looking to delve deeper into the company's prospects, InvestingPro offers additional insights. There are currently 10 more InvestingPro Tips available that can provide further guidance on Akanda Corp's financial position and future outlook.
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