Equity Raises:

• • On May 15, 2025, ZYUS Life Sciences Corp.(ZYUS: TSX), a company focused on the development and commercialization of novel cannabinoid based pharmaceutical drug candidates for pain management, closed the second tranche of an equity unit transaction for combined gross proceeds of $0.98M.
  • ZYUS sold 2.08M units at $.471 per unit. Each unit consisted of ½ share of two-year warrants with 43% exercise premiums. The ½ warrant per unit, short duration, and relatively high premium reduced the value of the warrant package to around $0.016 per unit.
  • The unit consisted of one share and ½ of a share in a two-year warrant with a 59% premium. The small number of warrants per unit, short duration, and relatively high premium reduced the value of the warrant to less than $0.01 per unit.
  • The unit’s net price was a discount of approximately 11% to the preannounced price, relatively solid execution given that the offering increased the total share count by about 16%.
  • The transaction implies a market cap for the company of approximately $22.09M.
  • The transaction was not big enough to alleviate ZYUS’s liquidity stress. Pro forma for the deal, the company’s free cash flow adjusted current ratio is negative .54x, indicating a serious need for additional funding.

Public vs. Private Raises: 

• One of the two capital raisers this week was public and trades on the TSX.

Equity vs. Debt Cap Raises:

• Debt accounted for 71% of trailing 8-week capital raises. The ratio may go down if companies are able to utilize favorable regulatory-induced stock price increases to complete equity issues. However, equity pricing has remained stubbornly low while the cannabis debt capital markets have reopened.