On Friday, the company closed the first tranche of its private placement, generating C$2 million through the sale of 6.7 million units priced at C$0.30.
The decision to upsize the placement comes as the extractions company looks to chase opportunities in the new era of the pot market, dubbed Cannabis 2.0.
"Following our recently announced commercial contracts and the market opportunities with additional cannabis 2.0 manufacturers coming on line, we feel this is the right time to provide our company with additional growth working capital to pursue these accretive opportunities," Charles Ackerman, Nextleaf’s CFO told shareholders in a statement.
"We have received strong interest for this non-brokered private placement from loyal OILS shareholders and new strategic investors. As we move towards Canada's 2020 outdoor-grown cannabis harvest, our goal is to have our cannabis oil refinery at 100% utilization.”
The next tranche of the non-brokered private placement consists of 3.3 million units priced at C$0.30 for gross proceeds of C$1 million. Each unit consists of one share and one warrant exercisable at C$0.50 per share for a 24-month period following the closing date. If Nextleaf’s shares trade above C$0.70 for 10 consecutive trading days, then the warrants will automatically be accelerated to the date that it 30 days after the expiry date.
In connection with the financing, Nextleaf paid an aggregate of C$20.080 in finder’s fees and issued 66,933 broker warrants in connection with the closing of the first tranche. The broker warrants have the same terms as the share purchase warrants but the acceleration clause holds that shares must trade above C$0.70 for 20 consecutive trading days for the warrants to be accelerated.
Shares of Nextleaf gained 5% at C$0.32 in Canada and 4.8% at US$0.22 over the counter on Friday morning.
--Updated with share price--
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