Shares of Valens Groworks Corp (OTCMKTS:VGWCF) continue to break out to the upside as this new upstart in the cannabis patch picks up steam with each passing day. To help further flesh out the story, the company just announced that it will issue its Q1 fiscal 2019 financial results (period ended February 28, 2019) on Wednesday, April 24, 2019, after the closing bell. That announcement was preceded by news that it had closed a bought-deal prospectus offering for over $43M in proceeds.
According to the release, “The Offering was led by AltaCorp Capital Inc. as lead underwriter and sole bookrunner, along with a syndicate of underwriters, including GMP Securities L.P., Raymond James Ltd., Haywood Securities Inc., and Mackie Research Capital Corp., pursuant to which the Company issued an aggregate of 14,618,644 units of the Company at a price of $2.95 per Unit, which included the full exercise of the Underwriters’ over-allotment option for aggregate gross proceeds to the Company of $43,125,000.” That’s a clear industry nod in favor of the name. Hence, the breakout.
Valens Groworks Corp (OTCMKTS:VGWCF) promulgates itself as a biotechnology company that engages in the scientific research of phytopharmaceutical material primarily producing cannabis and cannabis related products.
It is also involved in the analytical laboratory testing of cannabis. The company has collaborative research partnerships with UBC Okanagan and Thompson Rivers University.
Valens Groworks Corp. is headquartered in Kelowna, Canada.
Moreover, this is a research-driven Canadian cannabis company focused on downstream secondary extraction methodology, distillation and cannabinoid isolation and purification, as well as associated quality testing with three wholly-owned subsidiaries located in and around Kelowna, BC.
Subsidiary Valens Agritech holds a license to cultivate cannabis and produce cannabis oil under the Cannabis Act, as well as a license to conduct analytical testing for the cannabis industry. VAL currently has extraction processing and supply agreements with various leading producers across Canada. Subsidiary Valens Labs is a Health Canada licensed ISO 17025 accredited cannabis testing lab providing sector-leading analytical services and has partnered with Thermo Fisher Scientific to develop a Centre of Excellence in Plant Based Science.
Subsidiary Valens Farms is in the process of becoming a purpose-built facility in compliance with European Union (EU) Good Manufacturing Practices (GMP) standards, ensuring the product from this facility can be exported anywhere in the world where Cannabis is nationally legal for medical or adult usage purposes.
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As noted above, VGWCF just announced that it has closed its previously announced bought-deal prospectus offering with some big names in the mix and a $43M overallotment execution.
Recent action has seen 36% during the past month in terms of shareholder gains in the name. In addition, the name has registered increased average transaction volume recently, with the past month seeing just shy of 440% over what the stock has registered over the longer term.
According to the release, “The Company plans to use the net proceeds from the Offering to increase extraction capacity at the Company’s Kelowna facility, build out the recently acquired adjacent property to add additional post processing, product development and white label capacity, and for general corporate purposes.”
Earning a current market cap value of $341.39M, VGWCF has a significant war chest ($25.2M) of cash on the books, which compares with about $961K in total current liabilities. The company is pre-revenue at this point. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $VGWCF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $VGWCF, either long or short, and we have not been compensated for this article.