Flora Growth Corp. Announces Pricing of $3.6 Million Registered Direct Offering

Rhea-AI Summary

Flora Growth Corp. (NASDAQ: FLGC) has announced a $3.6 million registered direct offering with institutional investors. The offering comprises 2,850,000 Common Shares priced at $1.25 per share. The transaction is expected to close around December 16, 2024.

Aegis Capital Corp. is serving as the Exclusive Placement Agent, with Dorsey & Whitney LLP acting as company counsel. The offering is being conducted under an effective shelf registration statement on Form S-3. The company plans to use the net proceeds for general corporate purposes and working capital.

Positive

• Secured $3.6 million in additional funding through institutional investors
• Transaction structured as registered direct offering, typically faster and more efficient than traditional public offerings

Negative

• Offering price of $1.25 per share indicates potential dilution for existing shareholders
• The need for additional working capital might signal cash flow concerns

Insights

Financial Analyst

This $3.6 million registered direct offering at $1.25 per share represents significant dilution for existing shareholders, with the issuance of 2,850,000 new common shares. For a micro-cap company with a market cap of about $25.7 million, this capital raise is substantial, representing approximately 14% of the company's current market value. The pricing shows a discount to recent trading levels, which typically puts downward pressure on the stock. While the additional capital will strengthen Flora Growth's working capital position, the dilutive impact and pricing terms suggest challenging market conditions for the company's fundraising efforts. The involvement of Aegis Capital as placement agent indicates institutional backing, but the terms reflect the current difficult environment for cannabis company financings.

Fort Lauderdale, Florida--(Newsfile Corp. - December 13, 2024) - Flora Growth Corp. (NASDAQ: FLGC) (the "Company") today announced that it has entered into definitive agreements in a registered direct offering with institutional investors for the purchase and sale of approximately $3.6 million of Common Shares at a price of $1.25 per Common Share.

The offering consists of the sale of 2,850,000 Common Shares. The public offering price per Common Share is $1.25. Aggregate gross proceeds to the Company are expected to be approximately $3.6 million. The transaction is expected to close on or about December 16, 2024, subject to the satisfaction of customary closing conditions. The Company expects to use the net proceeds from the offering, together with its existing cash, for general corporate purposes and working capital.

Aegis Capital Corp. is acting as Exclusive Placement Agent for the offering. Dorsey & Whitney LLP is acting as counsel to the Company. Kaufman & Canoles, P.C. is acting as counsel to Aegis Capital Corp.

The registered direct offering is being made pursuant to an effective shelf registration statement on Form S-3, as amended (File No. 333-274204), previously filed with the United States Securities and Exchange Commission (the
"SEC"), which was declared effective by the SEC on September 6, 2023. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC's website located at www.sec.gov/edgar. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at +1 (212) 813-1010.

Interested parties should read in their entirety the prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Flora Growth Corp.

Flora Growth Corp. is a cannabis focused consumer-packaged goods leader and pharmaceutical distributor serving all 50 states and 28 countries with 20,000+ points of distribution around the world.

Forward-Looking Statements

The foregoing material may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements regarding the Company's product development and business prospects, and can be identified by the use of words such as "may," "will," "expect," "project," "estimate," "anticipate," "plan," "believe," "potential," "should," "continue" or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Investor Relations:
ir@floragrowth.com

Investor Relations:
Clifford Starke
Clifford.Starke@floragrowth.com

Media:
media@floragrowth.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/233666

FAQ

How much did Flora Growth (FLGC) raise in its December 2024 offering?

Flora Growth Corp. raised $3.6 million through a registered direct offering of 2,850,000 Common Shares priced at $1.25 per share.

What is the price per share for FLGC's December 2024 offering?

The public offering price was set at $1.25 per Common Share.

When will FLGC's December 2024 registered direct offering close?

The offering is expected to close on or about December 16, 2024, subject to customary closing conditions.

How will Flora Growth (FLGC) use the proceeds from its December 2024 offering?

The company plans to use the net proceeds, along with existing cash, for general corporate purposes and working capital.

Who is the placement agent for FLGC's December 2024 offering?

Aegis Capital Corp. is acting as the Exclusive Placement Agent for the offering.