Toronto-based Emblem Corp. (EMMBF) announced that it has entered into an agreement with Eight Capital in which Eight Capital will buy 5,714,300 units and 15,000 convertible unsecured debentures of Emblem on a “bought deal” priced at $1.75 CAD per unit. Altogether the gross proceeds are approximately $25 million CAD.
In a statement, the company also said it agreed to, “an over-allotment option to purchase up to an additional 15% of the Units at the Unit 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 $1,500,004 CAD will be raised pursuant to the Offering and the aggregate proceeds of the Offering will be $26,500,029 CAD.” The deal is expected to close on or about November 7 assuming it receives all the appropriate approvals.
The money will be used to fund construction of the first 100,000 square feet production facility on the 80n acre property located in Paris, Ontario that was acquired in May. The plan is to use this production facility to meet the needs of the adult recreational market once the program is established.
Eight Capital (along with any additional underwriters included in a syndicate of underwriters in connection with the Offering) will receive a cash commission equal to 6.0% of the gross proceeds of the Offering. Emblem “will also issue to Eight Capital (along with any additional underwriters) non-transferrable compensation warrants in an amount equal to 3% of the gross proceeds of the offering divided by the Unit Issue Price.”
Emblem made the announcement on Monday following the market close. The stock is up over 3,000% on the Canadian Exchange and was lately trading at $1.96 CAD, down from its year high of $6.44 CAD. On the OTC Markets, the stock was lately trading at $1.57, higher than its 52-week lows of $1.14, but still down from its year high of $3.81.
Emblem is a licensed producer of medical marijuana and has not generated any revenues. The Company produces approximately 55 kilograms per month of dried flower marihuana.