WeedMD Inc (TSXV: WMD) announced after the bell last night that it will be raising $10 million through a bought deal with Mackie Research and a syndicate of underwriters. The raise is expected to be one of the last before the issuer reaches cash flow positive operations.
Taking the form of a convertible debenture, the raise consists of $1,000 units that bear interest at a rate of 8.5% per annum, maturing three years from the date of issue. Each unit comes with 625 common share purchase warrants with an exercise price of $1.80, and a term of three years. The debentures themselves are convertible into common shares of WeedMD at a price of $1.60 per share. A forced conversion clause is also included, allowing the firm to force conversion if the volume weighted average price exceeds $3.20 per share for a period of twenty days.
WeedMD has indicated that the proceeds from the raise will be utilized for working capital and general corporate purposes.
WeedMD reported its latest financials last week, posting revenue growth of 139% on a quarter over quarter basis with net revenues of $7.97 million. The firm reported a cash position of $11.34 million, with many industry followers anticipating a raise to be conducted in the near term to sustain ongoing operations and growth.
Sponsored · Selkirk Copper Mines
On the most recent conference call, Chief Financial Officer Nichola Thompson had indicated planned CapEx spend of roughly $8.8 million through to year end. Funds were indicated to be put towards the processing facility for the outdoor harvest, as well as for the development of CX Industries at WeedMD’s Alymer, Ontario facility. It is believed that the funds from the announced convertible debentures will be put towards the planned capital expenditures.
WeedMD closed yesterdays session at $1.56 on the TSX Venture Exchange.
FULL DISCLOSURE: WeedMD is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover WeedMD on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
The WeedMD – Starseed Deal Is Confusing This Market With Its Simplicity
The author formerly known as Matthew Cox writes for The Deep Dive under a contract...