"An investment in knowledge pays the best interest."

AGRAFLORA ORGANICS CLOSES $28,750,000 PRIVATE PLACEMENT AT $0.30 / SHARE

 

 

mj pic

 

Agraflora Organics International Inc. (AGRA.C) has closed a non-brokered private placement offering consisting of 28,750 unsecured convertible debentures with an aggregate face value of $1,000 for gross aggregate proceeds of $28.75-million.

The debentures were issued at a deemed value of 30 cents per share, which is a 66.67-per-cent premium to the company's closing price on Nov. 25, 2019. The debentures shall bear interest at a rate of 10.0 per cent per annum from the date of issue, payable semi-annually in arrears on June 30 and Dec. 31 of each year, commencing Dec. 31, 2019. Interest shall be computed on the basis of a 360-day year composed of 12 30-day months. The debentures shall mature on Dec. 31, 2021.

Proceeds from the placement will be used as general working capital and to continue the company's continuing capital expenditures at its 2.2-million-square-foot Delta greenhouse complex as well as its 51,500-square-foot Winnipeg edibles facility.

The debentures will be convertible at the holder's option into: (i) that number of common shares of the company calculated on the basis of the aggregate principal amount of the debentures being converted divided by the conversion price of 30 cents per share; and (ii) a cash payment equal to the additional interest amount that such holder would have received if it had held the debenture from the date of conversion to the maturity date. Holders converting their debentures will receive accrued and unpaid interest thereon for the period from and including the date of the latest interest payment date to, but excluding, the date of conversion. If converted, the debentures will convert into approximately 95,833,333 common shares in the capital of the company.

Brandon Boddy, chairman and chief executive officer of Agraflora, stated: "While Tier 1 LP peers continue to encounter challenges in remaining adequately capitalized throughout these dynamic market conditions, this material cash infusion at a substantial premium to market is indicative of our Agraflora's pole position throughout the next phase of cannabis normalization. The immense potential of our portfolio of accretive upstream and downstream assets is once again validated by this strategic investment from Canada's premier cannabis fund."

All securities issued pursuant to the offering are subject to a statutory four-month-and-one-day hold period from the date of issuance pursuant to applicable securities laws of Canada.

About Agraflora Organics International Inc.

Agraflora is a growth-oriented and diversified company focused on the international cannabis industry. It owns an indoor cultivation operation in London, Ont., and is a joint venture partner in Propagation Services Canada Inc. and its large-scale 2.2-million-square-foot greenhouse complex in Delta, B.C. The company is also retrofitting a 51,500-square-foot good manufacturing practice (GMP) edibles manufacturing facility in Winnipeg, Man. Agraflora has a successful record of creating shareholder value and is actively pursuing other opportunities within the cannabis industry.