The latest offering on the Stockhouse DealRoom is a diversified cannabis company that is currently private but has applied to re-list its shares. For experienced investors, a private equity company equates to “ground floor”. In turn, this also often means a value-investment.
Among the reasons why private companies choose to go public is increased liquidity. A public listing facilitates investing in a company and this ease of investing translates into more fully valued assets. This means that buying into a corporation
pre-IPO can be a profitable tactic for value investors.
A case in point is
Teal Valley Health Inc., a private cannabis company with a “pre-money valuation” of only $6.6 million. The Company is seeking to raise up to $10 million through the sale of up to 15,384,615 Units, with Units priced at $0.65.
Each Unit is comprised of one common share and one-half common share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share, at an exercise price of $1.30, with an accelerator clause.
What do investors get for $6.6 million? Quite a bit.
Teal Valley’s principal assets will include a 25,000 square foot Whitby, Ontario, licensed packaging facility and a 94,000 square foot derivative extraction and packaging operation located in Montreal (with the transaction closing in November 2018). The Company’s operational focus is high-margin cannabis extracts however Teal Valley is also committed to the ongoing development and sale of its comprehensive cannabis industry software platform. With annual revenues of $4 million, there are already substantial operations here.
In terms of leadership, President & COO, Trevor Folk, has substantial industry experience having successfully founded and built-out one of the sectors first fifty LPs and the industry’s first Licensed Dealer. Additionally, Chairman and CEO Brett Walker has broad experience in capital markets, facilitating financings and M&A transactions in excess of $1 billion. The remainder of the management team provide additional depth in cannabis operations, healthcare, clinic management and software sales.
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Teal Valley Health is a private company today, but the Company already has an application in place with the CSE for a public listing. This will be reassuring for those investors looking ahead to future liquidity.
As cannabis investors know, this is a sector that has enormous growth potential that will play out over a span of decades, the consequence of nearly 100-years of cannabis Prohibition. This means that there is still plenty of room for new entrants to the sector.
This second wave of cannabis companies will have broad appeal to many investors. These newer companies have had several years to observe their predecessors (and learn from them), while sporting valuations at a ground floor level.
Teal Valley Health’s DealRoom financing provides access to a licensed cannabis company with substantial operations, positioned at the higher end of the cannabis market, and at a very attractive valuation. The
Stockhouse DealRoom: your destination to participate in exclusive financings, featuring some of the best companies – and deals – currently available on the market.
To participate in the Teal Valley private placement click HERE
FULL DISCLOSURE: Teal Valley Health Inc is a paid client of Stockhouse Publishing.
Stockhouse Publishing Ltd. (Stockhouse) is not registered as a broker, dealer, exempt market dealer, or any other registrant in any securities regulatory jurisdiction and will not be performing any registerable activity as defined by the applicable regulatory bodies. This deal room is for informational purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein. Offers to sell, or the solicitations of offers to buy, any security can only be made through official offering documents that contain important information about risks, fees, and expenses. The information contained in this deal room is selective and does not purport to contain all the information relating to Teal Valley Health Inc. In all cases, parties should conduct their own investigation and due diligence, not rely solely on the data provided herein and are encouraged to consult with a financial adviser, lawyer, accountant, and any other professional that can help to understand and assess the risks associated with any investment opportunity.