F-1/A: BYND Cannasoft Enterprises Inc. Announces Public Offering to Fund Growth Initiatives

BYND Cannasoft Enterprises Inc. is launching a public offering of units and pre-funded units to raise capital for patent registrations, prototype production, sales & marketing of the EZ-G device, working capital, the permanent waiver of certain rights and obligations of an investor and general corporate purposes.

Summary

• BYND Cannasoft Enterprises Inc. is undertaking a public offering in the United States, offering 50,035,740 units, each comprising one common share, one Series A Warrant, and two Series B Warrants.
• The assumed public offering price is $0.1399 per unit, based on the closing price of the company's common shares on March 7, 2024.
• The company is also offering pre-funded units to purchasers whose acquisition of units would result in beneficial ownership exceeding 4.99% of the outstanding common shares.
• Each pre-funded unit consists of one pre-funded warrant to purchase one common share, one Series A Warrant, and two Series B Warrants, priced at $0.0001 less than the unit price.
• The Series A Warrants are exercisable for 30 months, and the Series B Warrants for five years, from the date of issuance.
• The company has granted the underwriter an over-allotment option to purchase additional common shares and/or warrants.
• Net proceeds from the offering are expected to be approximately $7 million, which will be used for patent registrations, prototype production, sales & marketing of the EZ-G device, working capital, the permanent waiver of certain rights and obligations of an investor and general corporate purposes.
• The company is an emerging growth company and a foreign private issuer, subject to reduced reporting requirements.

Sentiment

Score: 5

Explanation: The document is primarily factual, outlining the terms of a public offering. While the offering itself is a positive step for the company, the document also acknowledges existing financial challenges and risks, resulting in a neutral sentiment score.

Positives

• The offering aims to provide capital for key growth initiatives, including patent registrations and prototype production for the EZ-G device.
• The company has the flexibility to use the proceeds for working capital and general corporate purposes.
• The underwriter's over-allotment option could bring in additional capital if exercised.
• The company has commenced the process for the voluntary delisting from the CSE and expect the delisting to become effective within the next 30 days.

Negatives

• The company is an emerging growth company and a foreign private issuer, which means reduced reporting requirements and potentially less information available to investors.
• The company has been notified by The Nasdaq Stock Market LLC of its failure to comply with certain continued listing requirements and, if it is unable to regain compliance with all applicable continued listing requirements and standards of Nasdaq, its Common Stock could be delisted from Nasdaq.
• The company has received comments from the British Columbia Securities Commission relating to its previously filed periodic reports which may result in a Canadian cease trade order.

Risks

• Investing in the company's securities involves a high degree of risk, as detailed in the Risk Factors section of the prospectus.
• The market price of the company's common shares may be volatile, which could result in substantial losses for investors.
• There are risks associated with the potential dilution of the company's common shares.
• The company's directors and officers control a large percentage of the company's issued and outstanding common shares and as a result, may have the ability to control or influence matters affecting the company and its business.
• Cannabis remains illegal under U.S. federal law, and enforcement of cannabis laws could change.
• If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about the company or its business, its trading price and volume could decline.
• The company may not be able or willing to pay any dividends.
• The Warrants included in the Units are expected to be listed on Nasdaq separately upon the pricing of this offering, and may provide investors with an arbitrage opportunity that could adversely affect the trading price of our Common Shares.
• The Warrants are speculative in nature.
• There is no established market for the Warrants being offered in this offering.
• The company is dependent on a single client for the majority of its current revenues and any changes to that relationship could have a significant impact on current revenues.
• The contactless business license expired on February 5, 2024 and its extension by an additional year is contingent on the MCUs approval.
• The current war situation in Israel might impact the ability of the medical cannabis growers we work with to produce the products we need.

Future Outlook

The company believes that its existing cash, cash equivalents and short-term deposits, together with the net proceeds of this offering, will be sufficient to enable it to fund its operating expenses and capital expenditure requirements for the next twelve months.

Industry Context

The company aims to become a strong player in CRM systems for the medical cannabis market by building a tailor-made platform and understanding the needs of growers, suppliers, and researchers.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or comparable companies.
• The document mentions Foria, a plant-based sexual wellness company, as a strategic alliance partner, but does not provide specific details about Foria's financial performance or market position.
• The document mentions SAP SE (SAP), Oracle Computer Technology Corporation (Oracle), Salesforce.com, LLC (Salesforce.com), Pivotal Software Inc. (Pivotal), Microsoft Corporation (Microsoft), and Eshbel Technologies (Eshbel) as competitors in the CRM market, but does not provide specific comparisons of their financial performance or market share.

Stakeholder Impact

• Shareholders may experience dilution as a result of the public offering.
• The offering could provide the company with the capital needed to grow its business and increase shareholder value.
• Customers may benefit from the company's increased investment in product development and marketing.
• Employees may benefit from the company's increased financial stability and growth opportunities.

Next Steps

• The company will proceed with the public offering, subject to market conditions and regulatory approvals.
• The company intends to apply for an extension of the contactless business license for an additional year.
• The company will continue to develop and market its CRM software and EZ-G device.
• The company will decide on the future of the Cannabis Farm by August of 2024.

Key Dates

Keywords

public offering, common shares, warrants, pre-funded units, capital raise, EZ-G device, BYND Cannasoft, medical cannabis, CRM software, BCAN