Herbal Dispatch closes $2.07-million private placement

Executive Summary

• Herbal Dispatch Inc. closed an oversubscribed, non-brokered private placement of 41,564,220 units at $0.05 per unit, raising gross proceeds of $2,078,211.
• Each unit consists of one common share and one-half transferable warrant exercisable at $0.08 per share for 24 months.
• Net proceeds are allocated to enhance operational resilience, including premium inventory for export sales, supply chain strengthening, and domestic market expansion.

Key Details

• Transaction Structure: Non-brokered private placement.
• Units Sold: 41,564,220 units.
• Price Per Unit: $0.05.
• Gross Proceeds: $2,078,211.
• Warrant Terms: Each unit includes one-half common share purchase warrant. Warrants are transferable, exercisable for one common share at $0.08 per share, and valid for 24 months from issuance.
• Use of Proceeds: Strategic allocation to enhance operational resilience and fuel long-term growth, specifically:
  • Investments in premium inventory to accelerate export sales into high-margin international markets.
  • Strengthening supplier relationships to ensure a reliable supply chain.
  • Expanding business in domestic markets.
• Statutory Hold: Securities are subject to a statutory hold period of four months and one day from the date of issuance.
• Finder’s Fees:
  • Aggregate cash payment: $103,495.
  • Warrants issued: 599,900 warrants.
  • Paid only to qualified arm's-length finders who executed agreements and successfully introduced participating investors.
• Insider/Related Party Participation:
  • Insiders subscribed for an aggregate of 6,814,420 units, representing approximately 16.39% of the total units permitted.
  • Participants include:
    • Roderick W. Law Corp. (controlled by Roderick Kirkham, Corporate Secretary).
    • Drew Malcolm (Director).
    • EPC Holdings Ltd. (controlled by Philip Campbell, CEO and Director).
    • ADH Holdings Ltd. (controlled by Herb Dhaliwal, Director and Chairman).
• Regulatory Compliance:
  • Classified as a related party transaction under Multilateral Instrument 61-101.
  • Company relied on exemptions from formal valuation and minority shareholder approval requirements under sections 5.5(b) and 5.7(1)(a) of MI 61-101, citing that the fair market value of the interested party portion did not exceed 25% of the company's market capitalization.
  • Board of Directors unanimously approved the placement.
  • No material change report was filed 21 days prior to closing as insider participation was not determined at that time.

Notable Quotes

• "We are thrilled with the strong investor support demonstrated by this oversubscribed private placement, which underscores confidence in our growth trajectory, especially during challenging market conditions," commented Philip Campbell, chief executive officer of Herbal Dispatch. "These funds will enable us to accelerate our export initiatives and strengthen our operational foundation, positioning the company for sustained success in the domestic and export cannabis markets."