VANCOUVER, BC, Oct. 28, 2021
/CNW/ - Kiaro Holdings Corp. (TSXV: KO) ("Kiaro" or the
"Company") a Canadian cannabis retailer and distributor,
announces that further to its news release on September 30, 2021, that it has completed
the previously announced private placement (the "Offering")
of 3,759 convertible debenture units of the Company (the
"Units") at a price of $1,000
per Unit, for gross proceeds of $3,759,000. Research Capital Corporation
("RCC") acted as the lead agent and sole bookrunner, on
behalf of a syndicate, including Canaccord Genuity Corp.
(collectively with RCC, the "Agents").
Each Unit consists of (i) one 8% senior unsecured convertible
debenture (each, a "Convertible Debenture") having a face
value of $1,000, maturing
October 28, 2024 (the "Maturity
Date"), and convertible into common shares of the Company (each
a "Common Share") at a conversion price of $0.13 per Common Share (the "Conversion
Price"), subject to the terms of a convertible debenture
indenture dated October 28, 2021 (the
"Debenture Indenture"), between the Company and Odyssey
Trust Company, as debenture trustee; and (ii) 3,846 Common Share
purchase warrants of the Company (the "Warrants"). The
Convertible Debentures are also subject to an accelerator option,
whereby the Company shall have the right but not the obligation to
convert some or all of the then outstanding Convertible Debentures
into Common Shares at the Conversion Price, if the 30-day volume
weighted average price of the Common Shares on the TSX Venture
Exchange is greater than $0.26. Each
Warrant entitles the holder thereof to purchase one Common Share at
$0.16 per Common Share until
October 28, 2024.
The net proceeds from the Offering will be used for working
capital and general corporate purposes.
The Company has granted the Agents an option to purchase up to
an additional 15% of the Units sold pursuant to the initial closing
of the Offering at the Issue Price, exercisable in whole or in part
of any time up to 30 days after the date hereof.
In connection with the Offering, the Agents received a cash
commission in the aggregate amount of $161,540 and 1,863,848 non-transferable broker
warrants (the "Broker Warrants"). Each Broker Warrant is
exercisable into one Common Share until October 28, 2024, at a price of $0.13 per Common Share.
The Company is exempt from the formal valuation requirement and
the minority approval requirement under Multilateral Instrument
61-101 as at the time of the Offering, the fair market value of the
consideration for the Offering, insofar as it involved related
parties, did not exceed 25% of the Company's market capitalization.
Specifically, the aggregate subscription amount of the related
parties totaled $1,280,000 and the
Company's market capitalization at the time of the transaction
equaled approximately $22,224,146
based on the closing price of the Common Shares on the TSX Venture
Exchange immediately prior to closing. As a result, related party
participation equaled approximately 5.76% of the Company's market
capitalization.
"It's exciting to see the overwhelming shareholder appreciation
of Kiaro's business plan and how quickly investor participation
flowed in, enabling us to close this financing in short order. The
funding will support the operationalization of the newly acquired
Ontario, US and Australian assets,
including bringing them to the Kiaro brand standard. As a result,
we are now more confident than ever in delivering the forecasted
$42.7M in revenue and beyond." said
Daniel Petrov, Chief Executive
Officer of Kiaro.
Kiaro Holdings Corp.
Based in Vancouver, British
Columbia, Kiaro is an independent, omni-channel cannabis
retailer and distributor. Through existing storefronts across
British Columbia, Saskatchewan, and Ontario, and with the completion of the recent
acquisition of Hemisphere Cannabis from Aegis Brands, Kiaro has 16
stores with another two expected in early 2022. This is in addition
to its wholesale distribution division servicing Saskatchewan, and ecommerce sites in
Canada, the US and Australia. Kiaro is driven to introduce new
and experienced consumers to a lifelong exploration of cannabis.
With more than 70 years of collective retail and wholesale focused
experience, Kiaro's leadership team has a proven track record of
executing on acquisitions and financings, and moreover growing
brands across North America. The
Company plans to continue its growth trajectory through its
consumer-centric retail, ecommerce, and wholesale distribution
segments over the coming years.
Forward-Looking Information
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Kiaro, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking statements
relate, among other things, to: the use of proceeds of the
Offering, overall growth of the Canadian cannabis market and retail
opportunities, the award of new operating permits and licenses in
various jurisdictions, the future trading price of the Common
Shares, and the timing and amount of any dispositions of the Common
Shares. Forward-looking statements should not be read as guarantees
of future performance or results, and will not necessarily be
accurate indications of whether, or the times at or by which, such
future performance will be achieved. No assurance can be given that
any events anticipated by the forward-looking information will
transpire or occur. Forward-looking information is based on
information available at the time and/or management's good-faith
belief with respect to future events and are subject to known or
unknown risks, uncertainties, assumptions and other unpredictable
factors, many of which are beyond Kiaro's control. These risks,
uncertainties and assumptions include, but are not limited to,
those described in filing statement of the Company dated
September 29, 2020, a copy of which
is available on SEDAR at www.sedar.com, and could cause actual
events or results to differ materially from those projected in any
forward-looking statements. Furthermore, any forward looking
information with respect to future expansion plans is subject to
the qualification that management of Kiaro may decide, and the
assumptions that any construction or conversion would not be cost
prohibitive, required permits will be obtained and the labour,
materials and equipment necessary to complete such construction or
conversion will be available. Accordingly, readers should not place
undue reliance on the forward-looking statements and information
contained in this news release. Kiaro does not intend, nor
undertake any obligation, to update or revise any forward-looking
information contained in this news release to reflect subsequent
information, events or circumstances or otherwise, except if
required by applicable laws.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
For more information, visit investors.kiaro.com
For our most recent analyst report, click here
Daniel Petrov
Chief Executive Officer
SOURCE Kiaro Holdings Corp.
