TGOD stock is flying in the early trading session this morning after The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) said that it closed its bought deal financing announced in late November.
Major Relief
Most cannabis companies have gone through a pretty tough period over the past months due to the sector-wide issues, and in that regard, The Green Organic Dutchman has not been an exception.
However, the company made a highly positive announcement today with regards to a new deal worth $27.6 million. The company originally announced this bought financing deal back in November, and today the deal was finally closed. It is important to note that the financing deal was oversubscribed and ended up raising as much as $27.6 million. At a time when many companies in the cannabis sector are struggling to raise fresh capital, it is a tidy deal for TGOD.
The company announced that a total of 36,800,000 units were sold. Each unit is made up of one-half warrant and one common share in TGOD. From the data of the closure of the deal up until three years, each half warrant has an exercise price of $1.The units were sold for $0.75 each. The company went for this bought deal financing after canceling the issue of convertible debentures, which could have raised as much as $30 million for the company.
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TGOD stock is up by 7% at $0.75.
Recent Developments
The past few months have been quite tough for The Green Organic Dutchman, and particularly so after Aurora Cannabis (TSX:ACB) (NYSE:ACB) decided to sell its stake in the company. This had an adverse effect on the stock price as the market became flooded with TGOD stock.
However, there are certain reasons why investors could be optimistic about the stock as well. The company has applied for a listing on NASDAQ, and if it does get listed, then liquidity will be less of an issue as TGOD will gain access to a larger pool of investors with an uplisting like that.
Additionally, the company is trying to reduce its costs significantly and has earmarked reduced spending on sales and general administration. Sales and general and administration expenses made up as much as $59 million CAD of its operating costs.
Last but not least, the launch of cannabis derivatives in Canada also remains a massive opportunity for TGOD stock.
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Featured image: Canva
