We last featured an article on APHRIA INC COM NPV (OTCMKTS:APHQF) on the first of the month, and we talked about a couple of massive funding measures that the company had announced. This week, we’ve gotten confirmation of the closing of those deals that we wanted to pass along to our readers.
For those who may not have run across Aphria yet, the company is self-billed as one of Canada’s lowest cost producers and suppliers of medical cannabis, and the financing obtained is set to speed up expansion of the company’s already significant operations.
APHRIA INC COM NPV (OTCMKTS:APHQF) announced both transactions concurrently, one of which being a five-year, $25 million term loan with WFCU Credit Union bearing interest at 3.95% and a 15-year amortization. At closing, Aphria drew the full $25 million. The facility was entered into on May 8, 2017.
“By way of providing a $25 million secured term loan, WFCU Credit Union is pleased to have contributed to Aphria’s impressive growth strategy,” Eddie Francis, President, WFCU Credit Union. “Aphria’s prudent approach to successfully managing the aggressive and rapid growth of the company is a result of an impressive robust business model. Continuing to demonstrate a commitment to the stewardship of its core business, Aphria quickly capitalizes on opportunities within a very dynamic industry.” (Source: Marketwired)
The company also announced it had closed its short form prospectus offering, on a bought deal basis, including the exercise in full of the underwriters’ over-allotment option. A total of 13,269,252 common shares of the Company were sold at a price of $6.50 per Share, for aggregate gross proceeds of $86,250,138 . The Offering was underwritten by a syndicate of underwriters led by Clarus Securities Inc. and included Cormark Securities Inc., Canaccord Genuity Corp., and PI Financial Corp.
50% of the net proceeds from the Offering will be allocated towards the currently unfunded portion of the planning, design, development, construction and implementation (including the purchase of certain designated capital equipment) of the Company’s’ Part IV Expansion. 10% of the net proceeds from the Offering will be allocated to the working capital necessary to support the Company once Part IV expansion is complete and the remaining 40% will be allocated towards strategic investments. (Source: Marketwired)
While the share price on APHQF has gone down in recent sessions, we wouldn’t be so dismissive of the big plans the company has to stake its claim on the growing Canadian cannabis industry, and the big steps it has just taken to further that goal. Even though the number of Canadians who are officially registered medical marijuana users only numbers around 130,000 according to thestar.com, in a Government of Canada survey on drug and alcohol use, 420,000 Canadians admitted that they use marijuana for a medical reason. That suggests that the pattern of registered users increasing rapidly can be reasonable assumed to be continual, and the user count should continue to skyrocket, opening up a larger potential revenue stream for APHQF.
All in all, we’d have to call this stock one to watch in the Canadian cannabis space, and will be interested to continue following its story, including how efficiently its recently raised funds are spent. Follow the story along with us. We’ll stay up on any further developments with APHQF and pass them along to you! Stay locked on StreetRegister.com and be sure you’re signed up for our 100% free smallcap newsletter. It’s as easy as that! Simply submit your primary active email address in the box below. Subscribe now!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in APHQF stock, short or long.