GTEC Holdings (GTEC.V) is pumping up its brokered private placement to $8 million.
The company announced Feb. 25 that heavy demand drove the need to increase the private placement from “$5,005,000 to $8 million of units of the company.”
Sprott Capital Partners LP is leading the offering. Sprott also has the option, should demand rise even higher, to raise the offering by another 25%. This could add up to another $2 million to help fund GTEC’s capital projects.
GTEC intends to issue up to an aggregate of 18,181,818 units (including pursuant to any exercise of the agent’s option) at a price of 55 cents per unit. Each unit shall consist of one common share in the capital of the company and one-half of one common share purchase warrant, with each warrant exercisable at 90 cents for a period of 24 months from the date of issuance.
The expiry date of the warrants could change if GTEC wants to accelerate their timeline. This will only happen if the common shares’ volume-weighted average price surges past $1.50 for 20 consecutive trading days.
As part of the deal, GTEC agrees to pay Sprott 6% commission on the proceeds from the offering. Sprott will also receive broker warrants at a rate of 6% of all units sold. Those broker warrants will only be exercisable at 55 cents for two years after the offering closes.
The net proceeds of the offering will be used for general corporate and working capital purposes. The first close of the offering is expected to occur on or about Feb. 28, 2019, and is subject to receipt of all necessary regulatory approvals, including the approval of the exchange. All securities issued pursuant to the offering will be subject to a statutory hold period lasting four months and one day following the closing date.
Falcon Ridge Naturals
GTEC also announced it has formally ended its relationship with Falcon Ridge Naturals. The company divested interest in the organic farm after finally completing a sale Feb. 22 that was first publicized Oct. 3 of 2018.
GTEC completed the sale of its interest in Falcon Ridge Naturals Ltd. to its original vendor, Marlys Wolfe. GTEC plans to reallocate Falcon Ridge capital funds to its larger facilities and/or for existing expansion opportunities. Upon closing of the sale, GTEC received $200,000 and transferred 120 Class A voting common shares of Falcon Ridge to the purchaser.
The deal faltered after Kelowna City Hall voted against an application for a proposed 10,000 sq. ft. facility at Falcon Ridge. City council rejected the application citing rezoning and ALR land use issues.
But even though Falcon Ridge failed, GTEC is rapidly growing.
Recently, GTEC completed a new indoor facility in Chase, B.C. and it’s only the first in a bunch of indoor facilities the company is building for 2019. In total, the company plans to add enough space to produce upwards of 13,000 kgs of product by the end of this year.
According to the company, Edmonton’s Alberta Craft Cannabis will produce about 1,500 kgs this year and both Tumbleweed Farms and Ontario’s Grey Bruce Farms will produce about 2,500 kgs. In Kelowna, both GreenTec Bio-Pharmaceuticals (2,250 kgs) and 3PL Ventures (7,000 kgs) will push the production total above 13,000 kgs for 2019.
After GTEC completes its 2019 building projects, the company plans to have a cultivation footprint of roughly 120,000 sq. ft. covering B.C., Alberta, and Ontario.
Full Disclosure: GTEC Holdings is an Equity.Guru marketing client.
— M.J. JordanDisclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.