Cronos Group Inc. (NASDAQ, TSX-V: CRON) ("Cronos Group" or the "Company") is pleased to announce that it has entered into an agreement with a syndicate of underwriters co-led by GMP Securities L.P. and BMO Capital Markets to sell 10,420,000 common shares (11,983,000 common shares if the over-allotment described below is exercised in full) of the Company, on a "bought deal" basis, at a price of $9.60 per common share, for gross proceeds of approximately $100.0 million (approximately $115.0 million if the over-allotment option is exercised in full).
The Company intends to use $15.0 million of the net proceeds of the offering for capital expenditures relating to international operations and capacity expansion, and the remaining net proceeds of the offering for general working capital purposes, including working capital for the Company's international operations, and as capital on hand for potential new investment opportunities.
Completion of the offering is subject to, and conditional upon, the receipt of all necessary approvals, including approval of the NASDAQ Global Market and the TSX Venture Exchange and the applicable securities regulatory authorities. The offering is expected to close on or about April 6, 2018.
Cronos Group has also granted the underwriters an over-allotment option to purchase up to an additional 1,563,000 common shares on the same terms and conditions, exercisable in whole or in part at any time and from time to time up to 30 days following closing of the offering.
Cronos Group has filed a preliminary short form prospectus with securities regulatory authorities in all of the provinces of Canada other than Quebec and has filed a registration statement (including a preliminary prospectus) in respect of the offering with the U.S. Securities and Exchange Commission ("SEC"). The preliminary short form prospectus and registration statement (including the preliminary prospectus) are subject to completion and amendment.
The registration statement relating to the common shares has been filed with the SEC but has not yet become effective. The common shares may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. In Canada, there will not be any sale of common share or any acceptance of an offer to buy common shares until a receipt for the final short form prospectus has been issued.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any common shares, nor there be any sale of common shares in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
Preliminary 2017 Financial Year Results
Cronos Group has also announced that, based upon information currently available to management, it anticipates reporting revenue of between $3.8 and $4.4 million for the twelve months ended December 31, 2017 ("FY 2017"), compared to $0.6 million for the twelve months ended December 31, 2016, with the year-over-year increase resulting primarily from higher unit sales, driven primarily by (i) increased patient registration and demand, as well as (ii) the fact that FY 2017 results included Peace Naturals Project Inc. ("Peace Naturals") revenues for the entire period whereas the 2016 financial year results included Peace Naturals revenues only from September 2, 2016, when the Company acquired Peace Naturals, until December 31, 2016.
All figures reported above with respect to the FY 2017 are preliminary and are unaudited and subject to change and adjustment as the Company prepares its consolidated financial statements for the years ended December 31, 2017 and December 31, 2016. Accordingly, investors are cautioned not to place undue reliance on the foregoing guidance. The Company is issuing preliminary results to enable it to disclose such information in connection with the offering, and readers are cautioned that the preliminary results may not be appropriate for other purposes; the Company does not intend to provide preliminary results in the future. The preliminary results provided in this news release constitute forward-looking statements within the ...
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