TGOD stock is tanking on Tuesday after The Green Organic Dutchman Holdings (TSX:TGOD) (OTCQX:TGODF) announced it would carry out a bought deal public offering in order to raise $22 million CAD.
TGOD Stock Continues to Fall Despite Allaying Financing Fears
The Green Organic Dutchman has said that the raised funds will be used to complete the construction of its processing facility in Ancaster, Ontario, and for general corporate expenses. The offering will be led by Canaccord Genuity as underwriters, which have agreed to purchase 29,334,000 units at a price of $0.75 per unit. Each unit will consist of one common share and one-half of one common share purchase warrant, which is exercisable to acquire one commons share of TGOD stock after 36 months at a closing price of $1.0.
The struggling Canadian cannabis firm has also granted the underwriter an over-allotment option to purchase up to an additional 4,400,100 units at a price of $0.75, which is exercisable at any time for a period of thirty days after the closing date and which would generate an additional $3.3 million CAD if exercised. TGOD stock had been in a downward spiral for much of the year as investors became concerned with the company's cash position.
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Additional Financing
Last week, The Green Organic Dutchman announced that it had secured $103 million CAD in funding by way of a sale-leaseback arrangement on the Ancaster facility, as well as a construction mortgage loan and a term sheet agreed with an investment fund. All the raised financing will be used to complete construction and allow the company to continue its expansion strategy. Despite the secured financing allowing the cash-strapped pot producer to execute its long-term vision, TGOD stock is down 18% at the time of writing.
In more positive news for TGOD investors, the company has also announced that it has received its first purchase order from the BC Liquor Distribution Branch, which expands TGOD’s retail visibility to include British Columbia’s 163 stores and brings the company's total footprint to 527 stores in five provinces. TGOD shares are currently trading at $0.73.
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