Recent equity financing for Khiron Life Sciences (TSXV: KHRN)

Some noteworthy points from Khiron Life Sciences (TSXV: KHRN) recent equity financing. First, the co-lead underwriters were Canaccord Genuity and BMO Capital Markets. In my opinion, Canaccord is probably the leading investment dealer/banker in the cannabis space in Canada. Bank of Montreal has been a ground-breaker in leading the Canadian chartered banks into the cannabis field. This is a great team to lead your underwriting. Second, this is a “bought deal.” As I have explained to readers, this is a ‘guaranteed’ form of underwriting that bankers only offer to their best clients. Third, the offering was initially announced at $20 million and upsized the offering to $25.1 million. This indicates strong demand for the shares being underwritten.

But here’s the most impressive detail from my point of view. The underwriting price is $2.20 per share. On February 6, 2019, the day the offering was announced, the shares opened at $2.26 per share and traded as low as $2.25 per share before closing at $2.78 per share. It isn’t very often that a stock will announce an underwriting and have the stock close significantly higher than the issue price.

These are all strong indications to me that investors believe Khiron Life Sciences shares are undervalued. Of course the stock has moved up since but, in my opinion, it has much farther to go.