Meta Growth Conducts Bought Deal At Significant Discount To Market

Meta Growth (TSXV: META) is the latest firm within the cannabis space to conduct a financing. The difference however, is that the pricing of the financing is currently below market pricing of the equity, and that the warrant is nearly in the money as well.

The price of the offering has been controversial for current shareholders, as its at a discount in excess of 18% of the current price of the equity on public markets. The full warrant included with the financing is also nearly in the money as well, and follows the news of the company failing to reach an agreement to sell off its medical division. Additionally, the firm secured $11.0 million just last month through a loan with Opaskwayak Cree Nation.

The financing, announced after market hours yesterday evening, is being conducted on a bought deal basis by Echelon Wealth Partners, for a total figure of $10.0 million. The deal will see over 45 million units sold at a price of $0.22 per unit, which also comes with a full common share purchase warrant at $0.29. Each warrant has a maturity of 36 months from the date of closing.

As a part of the arrangement, Echelon also has the option for an over-allotment purchase for up to 15% of the original financing. The firm will receive a fee of 7% of gross proceeds as a result of conducting the bought deal financing.

Funds raised from the offering will be utilized for expanding Meta Growth’s Ontario retail presence, as well as for working capital and general corporate purposes.

The financing is expected to close on or around February 6, 2020.

Meta Growth last traded at $0.27 on the TSX Venture.

Information for this briefing was found via Sedar and Meta Growth. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.