Valens Closes $46 Million Unit Offering

The Valens Company Closes Previously Announced Bought Deal Financing

KELOWNA, BC, June 1, 2021 /CNW/ – The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) (the “Company,” “The Valens Company” or “Valens”), a leading manufacturer of cannabis products, is pleased to announce the closing of its previously announced bought deal public offering (the “Offering”) of units of the Company (the “Units”) for total gross proceeds of $46,002,990. The Company sold 13,940,300 Units at a price of $3.30 per Unit, including 1,818,300 Units sold pursuant to the exercise of the underwriters’ over-allotment option.

Each Unit is comprised of one common share (a “Common Share”) and one-half of a common share purchase warrant of the Company (each whole common share purchase warrant, a “Warrant”, and collectively with the Units and the Common Shares, the “Offered Securities”). Each Warrant will be exercisable to acquire one Common Share (a “Warrant Share”) for a period of three years following the closing date of the Offering at an exercise price of $4.15 per Warrant Share, subject to adjustment in certain events. In the event that the volume weighted average trading price of the Common Shares for ten (10) consecutive trading days exceeds $8.25, the Company may, within ten (10) business days of the occurrence of such event, deliver a notice (including a press release) to the holders of Warrants accelerating the expiry date of the Warrants to the date that is thirty (30) days following the date of such notice.

The Company plans to use $28 million of the net proceeds of the Offering to pursue opportunistic acquisitions and business expansion opportunities in North America and international markets and $5 million for capital expenditures, with the balance of the net proceeds for working capital requirements and other global general operating expenses. None of the proceeds of the Offering will be used for the previously announced proposed acquisition of Green Roads and its majority owned manufacturing subsidiary.

Stifel Nicolaus Canada Inc. (“Stifel GMP”) acted as lead underwriter and sole bookrunner for the Offering, along with a syndicate of underwriters including ATB Capital Markets Inc., A.G.P./Alliance Global Partners, Canaccord Genuity Corp., Desjardins Securities Inc., Haywood Securities Inc., M Partners Inc., and Research Capital Corporation (collectively, the “Underwriters”).

Stikeman Elliot LLP acted as legal counsel to Valens on the Offering and Borden Ladner Gervais LLP acted as legal counsel to the Underwriters on the Offering.

In connection with the Offering, the Company filed a prospectus supplement (the “Prospectus Supplement”) to the final short form base shelf prospectus dated January 28, 2021 (the “Base Shelf Prospectus”) in each of the provinces of Canada other than Quebec.

Copies of the Prospectus Supplement and the Base Shelf Prospectus are available on SEDAR at www.sedar.com and may also be obtained from Stifel GMP, 145 King Street West, Suite 300, Toronto, Ontario, M5H 1J8.

No securities regulatory authority has either approved or disapproved the contents of this news release. The Offered Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Offered Securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About The Valens Company

The Valens Company is a leading manufacturer of cannabis derivative products with a mission to bring the benefits of cannabis to the world. The Company provides proprietary cannabis processing services across five core technologies, in addition to best-in-class product development, formulation and manufacturing of cannabis consumer packaged goods. The Valens Company’s high-quality products are exclusively formulated for the medical, therapeutic, health and wellness, and recreational consumer segments, and are offered across numerous product formats, including oils, vapes, concentrates, edibles and topicals, as well as pre-rolls, with a focus on next-generation product development and innovation. Its breakthrough patented emulsification technology, SōRSE™ by Valens, converts cannabis oil into water-soluble emulsions for seamless integration into a variety of product formats, allowing for near-perfect dosing, stability, and taste. In partnership with brand houses, consumer packaged goods companies and licensed cannabis producers around the globe, the Company continues to grow its diverse product portfolio in alignment with evolving cannabis consumer preferences in key markets. Through its wholly owned subsidiary Valens Labs Ltd., the Company is setting the standard in cannabis testing and research and development with Canada’s only ISO17025 accredited analytical services lab, named The Centre of Excellence in Plant-Based Science by partner and scientific world leader Thermo Fisher Scientific. Discover more on The Valens Company and its subsidiaries at http://www.thevalenscompany.com.

Original press release

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