Red White & Bloom (CSE: RWB) this morning announced that it has completed a series of funding rounds to the tune of US$44.5 million. In total, following the settlement of certain debts, the company will see approximately $36.8 million of new cash brought into the firm while $7.7 million of debt is retired by the company.
The first transaction consists of what is referred to as a “units for debt” transaction, with the company selling Series II convertible preferred shares of the firm at a price of C$1.15 per unit, for gross proceeds of C$9.7 million (US$7.7 million). Each share is also accompanied by a half warrant, valid for a period of two years at a price of C$1.15 per share. Shares sold under the offering reportedly contain a 12 month lock-up provision.
The company has also completed a US$6.5 million unsecured debenture financing. The financing will see the debt contain an interest rate of 12%, with a maturity set for 150 days from the date of issuance. A fee of 531,000 shares of the company were paid in connection with the financing, with funds to be used for working capital purposes.
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Finally, the company conducted a financing directly within its RWB Florida subsidiary, for gross proceeds of US$30.2 million. The funding consists of US$11.3 million coming from strategic investors, with the investors taking a Class B membership stake in the subsidiary equivalent to 17.70% of the firms outstanding interest. The remaining portion, US$18.9 million, is to be funded via subordinated date at a rate of 8% interest, and a maturity of 3 years. The debt is subordinate to existing debt and secured by assignment of collateral interest. Finally, the debt is convertible at a price of US$2.75 per share.
“As evidenced by today’s announcement, we continue to demonstrate our ability to access the needed expansion and working capital, in the least dilutive possible manner to our shareholders, to execute on our strategy. With the previously announced pre-qualification in the State of Michigan and this cash injection, we will now move aggressively towards taking control of our investment in Michigan in which the immediate growth strategy includes rebranding our dispensaries under the High Times banner and preparing for the expansion of cultivation facilities so that we can hit the ground running upon final inspection.”
Brad Rogers, CEO of Red White & Bloom
Red White & Bloom last traded at $1.32 on the CSE.
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