Kiaro To Raise $3M Via Marketed Private Placement of Senior Unsecured Convertible Debenture Units

Cannabis retailer and distributor Kiaro Holdings Corp. KO is poised to raise $3 million through a marketed private placement of 3,000 senior unsecured convertible debenture units at $1,000 per debenture unit.

Based in Vancouver, Kiaro said Thursday that it has tapped a research capital corporation as lead agent and sole book-runner on behalf of a syndicate of agents to sell the debenture units.

Each debenture unit consists of one 8% senior unsecured convertible debenture having a face value of $1,000 and convertible into common shares of Kiaro $0.13 per share that will mature three years following the closing date, and 3,846 of Kiaro's common share purchase warrants with each granting the holder rights to purchase one common share at $0.16 share over the same time.

If the thirty-day volume-weighted average price of the common shares on the TSX Venture Exchange, or other principal exchanges on which the Kiaro's shares are listed, is greater than $0.26 at any time in the 12 months following the offering's closing and prior to the maturity date, the company is granted the right to convert some or all of the then outstanding Convertible Debentures - less any applicable withholding taxes - into Common Shares at the Conversion Price. Kiaro is obliged to notify the holders of the convertible debentures with no less than thirty days' notice prior to the date the conversion is effected.

Kiaro said it would grant the agents an option to purchase up to 15% of additional debenture units exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing date.

The company intends to use the proceeds from the offering for working capital and general corporate purposes.

The transaction is expected to close on or about October 28, 2021.

"We are excited to welcome Research Capital, another major institutional partner, to help meet the demand for Kiaro's unique cannabis retail experience," Daniel Petrov, the company's CEO said Thursday. "The additional funds will align Kiaro's best in class operating standards across a growing portfolio of stores, including the 10 locations we recently acquired in Ontario."

Recent Moves

On Monday, the company announced that it has wrapped up a transaction with Aegis Brands Inc. to acquire its subsidiary, 2734524 Ontario Inc., which is doing business as Hemisphere Cannabis Co, ahead of revealing it has generated revenue of CA$6.19 million ($4.88 million) in the second quarter of fiscal 2021.

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