TORONTO – ThreeD Capital Inc. (CSE:IDK / OTCQX:IDKFF), a Canadian venture capital firm specializing in opportunistic investments across junior resources and disruptive technologies, has issued an early warning report following a series of transactions that reduced its stake in Avicanna Inc. (AVCN). The firm, in conjunction with Sheldon Inwentash, a ‘Joint Actor,’ disposed of a significant block of Avicanna securities, triggering the regulatory filing.
The dispositions, which concluded in recent weeks, involved ThreeD divesting ownership and control of an aggregate of 977,000 common shares of Avicanna Inc. These ‘Subject Shares’ represented approximately 0.8% of all issued and outstanding common shares of AVCN. Crucially, as a direct consequence of these transactions, the combined percentage ownership held by ThreeD and Mr. Inwentash decreased by more than 2% on a partially diluted basis, relative to their last filed early warning report.
Detailed Shift in Avicanna Holdings
Prior to these recent dispositions, ThreeD Capital Inc. and the Joint Actor collectively owned and controlled a substantial interest in Avicanna. Their combined holdings amounted to 15,996,257 common shares, 1,105,000 common share purchase warrants, and 50,000 stock options. This aggregate position represented approximately 13.6% of all issued and outstanding common shares of AVCN, or approximately 14.4% on a partially diluted basis, assuming the exercise of all warrants and options held.
Breaking down these pre-disposition figures, ThreeD Capital Inc. individually held 9,902,300 common shares and 962,500 common share purchase warrants of Avicanna. This represented an approximate 8.4% stake in the issued and outstanding common shares, or about 9.1% on a partially diluted basis, considering the exercise of its warrants. The Joint Actor, Sheldon Inwentash, separately controlled 6,093,957 common shares, 142,500 common share purchase warrants, and 50,000 stock options. His individual holdings accounted for approximately 5.2% of Avicanna’s issued and outstanding shares, or approximately 5.3% on a partially diluted basis, factoring in the exercise of his warrants and options.
Post-Disposition Ownership Structure
Following the completion of the dispositions, the combined ownership and control of ThreeD Capital Inc. and the Joint Actor in Avicanna Inc. now stands at 15,019,257 common shares, alongside their existing 1,105,000 common share purchase warrants and 50,000 stock options. This revised aggregate position represents approximately 12.7% of all issued and outstanding common shares of AVCN, or approximately 13.6% on a partially diluted basis, assuming the exercise of all warrants and options held. This marks the ‘greater than 2%’ decrease from the previous filing that necessitated the early warning report.
Specifically, ThreeD Capital Inc.’s individual holdings after the transactions are 8,925,300 common shares and 962,500 common share purchase warrants of Avicanna. This translates to an approximate 7.6% of the issued and outstanding common shares, or about 8.3% on a partially diluted basis, assuming the exercise of its warrants. It is notable that the Joint Actor’s holdings remained unchanged in terms of the number of securities, continuing to hold 6,093,957 common shares, 142,500 common share purchase warrants, and 50,000 stock options, representing 5.2% of the issued and outstanding common shares (or approximately 5.3% on a partially diluted basis).
Transaction Details and Investment Philosophy
The 977,000 Subject Shares were disposed of through the facilities of the Toronto Stock Exchange. The total consideration received for these shares amounted to $164,497, which translates to an average price of approximately $0.168 per Subject Share. This transaction underscores ThreeD Capital Inc.’s active management of its investment portfolio.
ThreeD Capital Inc. operates as a publicly-traded Canadian venture capital firm, with a strategic focus on identifying opportunistic investments within the junior resources and disruptive technologies sectors. Its investment approach involves deploying capital across a diverse range of private and public companies globally. The firm aims to be a lead investor in promising early-stage companies, often providing not only capital but also advisory services and access to its broader ecosystem.
The company stated that the holdings of Avicanna securities by ThreeD and the Joint Actor are managed strictly for investment purposes. Looking ahead, ThreeD and the Joint Actor maintain flexibility regarding their position in Avicanna Inc., indicating that they could either increase or decrease their investments, or choose to maintain their current holdings. Such decisions would be contingent upon prevailing market conditions and other relevant factors, aligning with their opportunistic investment mandate.
