High Tide Inc. (TSXV: HITI) (NASDAQ: HITI) announced that it was going to issue up to C$40 million (or the equivalent in U.S. dollars) of common shares at the company’s discretion and subject to regulatory requirements. High Tide said it plans to use the net proceeds of the offering to fund two specific strategic initiatives it is currently developing, to support the growth and development of the company’s existing operations, funding future acquisitions as well as working capital and general corporate purposes.
“I am pleased to announce the establishment of an ATM Program. Keeping our balance sheet healthy is paramount for us. As previously mentioned, we have cut our debt by more than half over the past 12 months. Particularly considering our size and how active High Tide is, it is critical that we always have sufficient cash on hand to take advantage of any opportunities to create shareholder value,” said Raj Grover, President and Chief Executive Officer of High Tide. “This ATM Program is a very low-cost tool for us and provides an opportunity to be flexible in our approach and potentially raise some capital if and as needed to fund two strategic initiatives we are working on in particular. I look forward to sharing more regarding these initiatives in due course,” added Mr. Grover.
In September, High Tide said it expected to be at approximately 110 stores by the end of calendar 2021, despite some delays experienced in securing building permits. The company said it had made good progress on its application to enter the British Columbia market, and now expects that to occur by end of its 2021 fiscal year. Also in September High Tide said, “We are currently in discussions with multiple parties across a variety of end markets, with a particular focus on e-commerce within the growing ancillary and hemp-derived CBD markets. With a current annual run rate of revenues in the U.S. exceeding $50 million, we believe we are excellently positioned to lever our U.S. customer base to also sell cannabis once permissible by federal regulations and/or exchange policies – and the company intends to continue growing its U.S. presence in the meantime.”
High Tide said it will pay the Agents a cash fee of up to 2% of the gross proceeds and will reimburse certain expenses incurred by the Agents. Any shares sold through the ATM Program will be sold at prevailing market prices when issued (i) in ordinary brokers’ transactions on the Nasdaq Capital Market or another U.S. marketplace on which the common shares are listed, quoted, or otherwise traded or (ii) in ordinary brokers’ transactions on the TSX Venture Exchange or another Canadian marketplace on which the common shares are listed, quoted or otherwise traded.