Organigram to Expand Growing Facility With Proceeds From Bought Deal – $OGI.V


Organigram Holdings Inc. has entered into a letter of engagement with Eight Capital under which Eight Capital has agreed to purchase, together with a syndicate of underwriters, 14,285,715 units of the company on a bought-deal basis pursuant to the filing of a short-form prospectus, subject to all required regulatory approvals, at a price per unit of $3.50 for gross proceeds of $50,000,003.

The company has agreed to grant the underwriters an overallotment option to purchase up to an additional 15 per cent of the units at the issue price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the offering. If this option is exercised in full, an additional $7.5-million will be raised pursuant to the offering and the aggregate proceeds of the offering will be $57,500,003.

Each unit will comprise one common share of the company and one-half of one common share purchase warrant. Each warrant shall entitle the holder thereof to purchase one common share at an exercise price of $4, for a period of 18 months following the closing of the offering.

The company intends to use the net proceeds of the offering within the next 18 months to finance its expansion program to construct one of the largest indoor cannabis production facilities in Canada. The expansion plans are expected to add up to 40,000 kilograms/year of incremental capacity which would bring the company’s total production capacity to approximately 65,000 kg/year, as further described below. In addition to its expansion program, the company intends to use a portion of the net proceeds of the offering for working capital, general corporate purposes and to actively pursue strategic investments through international opportunities.

Organigram chief executive officer Greg Engel commented: “This financing provides us with the unique opportunity to extend our expansion plan to develop one of the largest and most impressive indoor growing facilities in the country. We have full confidence that this will allow us to fulfill our domestic and international opportunities well into the future.”

Upon completion of the offering, it is intended for construction to commence at the earliest convenience on 255,000 incremental square feet of space, which would bring the company’s production space to 429,000 square feet over 17.5 acres at its Moncton location. When complete, the company will have an anticipated annual output of up to 65,000 kg/year of medical and adult recreational cannabis products, including edibles, infused oils and extract products. “One of our key operating philosophies is to keep production costs low by centralizing operations,” noted Mr. Engel. “The simplicity of a single site is part of our focused approach on achieving the highest earning per gram in the industry. These production efficiencies will deliver tremendous shareholder value.” The plan will allow the company to commence development of the land and building purchases made at 55 English Dr. and 91 English Dr., both natural extensions of Organigram’s original location.

The closing date of the offering is scheduled to be on or about Dec. 18, 2017, and is subject to certain customary conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and the applicable securities regulatory authorities.

The offered securities will be offered by way of a short-form prospectus to be filed in all of the provinces of Canada, except Quebec, pursuant to National Instrument 44-101 — Short-Form Prospectus Distributions. –


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