Cannabis Co. Khiron: Shares Plunge On Heels Of $12.4M Offering Of Company's Units

Vertically integrated cannabis company Khiron Life Sciences Corp. KHRN KHRNF launched an overnight marketed offering on Monday of the company’s units with a price of 45 cents per offered unit.

The Toronto-headquartered company announced the terms of the offering on Tuesday, reporting that A.G.P./Alliance Global Partners agreed to sell 27.44 million units at a price of 45 cents per unit for gross proceeds of $12.35 million.

Under the offering, each unit will consist of one share and one share purchase warrant with each warrant enabling the holder thereof to buy one share at a price of 75 cents per share until November 26, 2025. The securities under the offering will be issued and sold only in the U.S.

Khiron plans to utilize the collected net proceeds from the offering for 1) future purchases; 2) capital expenses, and 3) standard corporate and working capital activities. The offering is projected to close around July 8, upon obtaining all the necessary approvals.

The leading placement agent was A.G.P./Alliance Global Partners, while the role of a co-placement agent was filled by ATB Capital Markets.

Recent Milestones 

The medical cannabis company with core activities in Latin America and Europe recently obtained a quota to export over 700 kg of high-THC extract to Mexico. The company’s Colombia SAS received approval to add Mexico as a destination country within its international export quota.

"Our goal is to improve the lives of 1 million patients by 2024 and Mexico remains a very important part of that plan," Alvaro Torres, the company's CEO and director said at the time.

Following Mexico's Supreme Court's approval to decriminalize adult-use marijuana, Khiron restated its plans to enter the Mexican medical cannabis market in 2021.

Vicente Fox, Khiron Director and former President of Mexico (2000-2006) praised the Supreme Court’s decision:

"I believe Mexico will be the largest legal cannabis market in the world, and with a proven strategy for Latin America and the knowledge and track record to execute, Khiron remains at the forefront of this exciting market,” Fox said. “Today's vote by the Supreme Court is an important step forward on the road to full legalization in Mexico."

Price Action 

Khiron’s shares were trading 19.35% lower at 31 cent per share at the time of writing Tuesday morning.