• The Week’s Closed Equity Deals
  • On 3/7/24, Planet 13 Holdings (PLTH: CSE)(PLNH: OTCQX) closed an equity unit transaction for gross proceeds of approximately $11.3M
  • The stock plunged by 21.5% in response to the pricing announcement and has continued to underperform the broader market.

• • The units were priced at $.6, including one share and one five-year warrant, with an exercise price of $.77 (28% premium).
  • The warrant premium seems reasonable, but the five-year maturity and whole warrant per unit are unusual.
  • It has become more common for these deals to include ½ warrant per unit and 2-3 years warrant terms.
  • The Black Scholes value of the warrant package is approximately $.146 per share, giving a net price of $.514 per share, about 28% below pre-announcement levels.
  • Pricing a deal with such generous terms suggests that the deal was not easy to sell.
  • The cannabis equity capital market has been frozen, awaiting a DEA announcement, and the PLTH transaction shows why. Pricing a deal before a potentially significant catalyst begs the question of why now?

Public vs. Private Raises: 

• Both capital raisers this week are public companies that trade in Canada on the CSE and in the U.S. on OTC.

Equity vs. Debt Cap Raises: 

• Equity accounted for nearly all of this week’s funds raised.