Canopy Growth To Raise Just $25 Million At 19% Discount To Friday’s Close
In a further sign of its struggles, Canopy Growth Corp (TSX: WEED) is again returning to the trough to raise funds from investors. The company this morning announced it would be raising just US$25 million, which would be raised through the sale of 22.9 million units of the company rather than through notes.
Units under the financing are priced at US$1.09 per each, and contain one common share and one common share purchase warrant. Warrants are valid for a period of five years and contain an exercise price of US$1.35 per share. The unit price represents a 19% discount to Friday’s closing price of the equity.
The financing is said to have been conducted with “certain institutional investors,” with up to a US$25 million over-allotment option also in play, which is valid through to November 2, 2023, and would bring the financing to US$50 million. Funds from the offering are to be used to strengthen the firms financial position, with proceeds to go towards working capital and general corporate purposes.
The financing is slated to close September 19.
WATCH: The Rise And Fall Of Canopy Growth
The small private placement follows the company conducting a US$150 million registered direct offering in February which saw the sale of unsecured convertible debentures, and several debt extension arrangements it entered into over the summer as it works to stabilize its operation.
Furthermore, the financing also follows the company placing its BioSteel Sports Nutrition division into bankruptcy just last week, as a result of the immense cash burn it exhibited.
Canopy Growth last traded at $1.83 on the TSX.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.
