Company directors and officers bought approximately 18.6 million shares; around 56% of the first closing.
Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF) completed the first closing of its private placement, raising more than $2 million with company insiders leading the investment round just days after acquiring a major production facility.
The cannabis producer issued about 33.5 million common shares at 6 cents each, according to the company Monday. Company directors and officers bought approximately 18.6 million shares, representing about 56% of the first closing.
“Over 75% of this first tranche subscribers were insiders, employees and consultants which emphasizes management’s dedication and commitment to growing Decibel together,” CEO Benjamin Sze said. “There is more than sufficient remaining interest to complete the private placement and cap the funding at our target.”
The financing follows Decibel’s latest acquisition of AgMedica Bioscience Ltd. For $6.3 million. That deal more than doubled the company’s export production capabilities to 12 metric tons annually, positioning the Canadian producer for international expansion after selling its retail stores earlier this year.
Sze said last week that the AgMedica facility would serve as “the cornerstone of our international strategy.” The company expects the acquisition to add about $30 million in net revenue and $4 million in EBITDA next year.
The Calgary-based company plans to use the new funding for working capital and integration of AgMedica’s operations. Decibel aims to raise up to $3.5 million total through the private placement, with additional closings expected by Nov. 30.
The company projects third-quarter revenue between $23 million and $25 million, citing new international exports and product launches. That would mark a recovery from the previous quarter when revenue fell 22% to $22.1 million amid increased competition in the pre-roll market.
The private placement still needs final approval from the TSX Venture Exchange. The shares carry a four-month holding period, except those issued to certain employees.
Discover more from reviewer4you.com
Subscribe to get the latest posts to your email.
