Zenabis Global (TSX: ZENA) announced this morning that the firm has completed its rights offering as of yesterday. In total, the firm raised approximately $20.8 million through the offering, which was the initial target announced for the financing. The firm indicated that the offering as a result was over subscribed.
While the financing has added over $20 million to the bank account of the company, shareholders will now have to contend with a bloated share structure. The offering added 139,086,624 common shares to the structure of the issuer, which is in addition to the previously outstanding 208,629,937 common shares as per the TSX exchange.
The result is a total of 344,716,561 common shares outstanding for the issuer. Based on the additional shares, Zenabis’ market capitalization will balloon from the current $42.7 million, to that of $70.6 million at the current price per share of $0.205. For the market capitalization to remain the same post share issuance, the equity would be required to tumble to approximately $0.125.
Sponsored · Silver47 Exploration Inc.
The rights offering was initially announced on October 24, 2019. At the time of announcement, many had theorized that the financing was a form of poison pill for the firm as a means of management retaining control of the issuer.
Zenabis Global closed yesterdays session at $0.205 on the TSX.
Information for this briefing was found via Sedar and Zenabis Global. 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.
