OrganiGram Holdings Inc (OTCMKTS:OGRMF) has announced that it has signed a letter of engagement, with Dundee Securities Ltd, to sell 9.86 million shares of its common stock, to a few underwriters. Dundee Securities is acting as the lead underwriter and is acting on behalf of the rest. The sale has been priced at $3.55 per share and would be conducted on a bought deal basis. However, the agreement is still subject to certain approvals, including the filing of a short form prospectus.
OGRMF announced that it would receive gross proceeds of $35.003 million, which it intends to use for capital expenditures, working capital and for general corporate purposes. The company has also decided to offer the underwriters with an over-allotment option, which would be exercisable up to 30-days following the close of initial sale. Under the over-allotment plan, OrganiGram plans to offer approximately 1.48 million additional shares of its common stock, which would result in approximately $5.24 million, in additional gross proceeds. The offering is expected to close on December 7, 2016. It should be noted here that the short form for the sale, would be filed in all provinces of Canada only, except Quebec.
Earlier last month, the company revealed that it has successfully completed its previously stated licensing transaction with TGS International Inc LLC. The agreement required OGRMF to issue 437,957 shares of its common stock to TGS, at a share price of $1.37. However, the shares would be held in an escrow and are subjected to the accomplishment of certain milestones by TGS, for release.
The CEO of OrganiGram, Denis Arsenault, expressed his pleasure at having completed the transaction and claimed that the expertise and technical knowledge of TGS was an integral part of their strategy. He went on to explain that the company plans to maximize their production yields, while streamlining the extraction process and continuing to develop high quality cannabis products.
OrganiGram Holdings Inc (OTCMKTS:OGRMF) lost 1.9% of its share value, during the November 15 trading session, to reach a close at $2.87 per share. The stock had a trade volume of 624,599.
