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Toronto-based medical cannabis producer Emblem Corp. (TSXV:EMC) (EMC.WT) closed its previously announced bought deal offering, including the over-allotment. It issued 14,024,391 units and 25,000 8.0% convertible unsecured debentures due in 2021. Total gross proceeds were $53,750,001.55.


The proceeds will be used for a new facility, comprised of 3.1 acres of greenhouse and .8 acres of infrastructure.  Remaining funds will be for pharmaceutical formulation development, including research and trials, and for general working capital purposes.


Emblem has three verticals – cannabis production, patient education centers, and pharmaceutical dosage form development.


After the offering, Emblem will have a cash and cash equivalents balance of approximately $87,000,000.


Each unit consists of one common share and one common share purchase warrant. The units sold at $2.05 raising $28,750,001.55.  The debentures sold at $1,000 each raising $25,000,000. The warrants entitle a holder to buy an additional common share at $2.70 until February 2, 2020. The Debentures offer 8.00% interest payable semi-annually, maturing on February 2, 2021.


Emblem can require conversion of debentures on not less than thirty days’ notice if the weighted average trading price is greater than $3.45 for any ten consecutive trading days.


The company also announced that holders of $15,000,000 of its previously issued convertible debentures due November 16, 2020 converted their debentures into common shares at the stated conversion price of $1.95 per share. In connection with the conversion, Emblem issued 7,692,307 Common shares to the debenture holders.


Source Emblem press release