MONCTON, NEW BRUNSWICK--(Marketwired - Dec. 22, 2014) - OrganiGram Holdings Inc. (TSX VENTURE:OGI)(OTCQX:OGRMF) (the "Company") is pleased to announce that it has completed the purchase of its current facility as well as the adjoining building and land. The Company has secured a loan from Farm Credit Canada ("FCC") in the amount of $2.5M, which has been used to finance 100% of the purchase costs.
The purchase of the two buildings is a great milestone for the Company and another step forward in advancing the Company's accelerated facility expansion, which has been initiated in order to keep pace with the higher than expected demand for product.
Facility Highlights:
- Two properties total 5.5 acres
- 78,500 square feet of growing space
- Completed site build out capacity of 15,000kg
Building Purchase and Debt Financing Details
The buildings were purchased for $1,535,000 and $975,000 respectively. The Company has secured debt financing from Farm Credit Canada for 100% of the purchase cost. The debt facility was secured at an interest rate of 5.75% for a term of 5 years.
Equity Financing
The company is also pleased to announce that it has, further to its news release dated December 5, 2014, closed a brokered private placement (the "Brokered Financing") of units (the "Units") for aggregate gross proceeds of $1,407,417.90 million based on the sale of approximately 2,010,597 Units at a price of $0.70 per Unit. Each Unit is comprised of one common share in the capital of the Company (a "Share") and one common share purchase warrant (a "Warrant"), each Warrant entitling the holder thereof to acquire an additional share for a period of three years at a price of $1.00 per share. The closing is subject to the fulfillment of certain conditions, including customary post-closing filings with the TSX Venture Exchange.
The Company engaged Jacob Securities Inc. ("Jacob") to act as agent on a commercially reasonable efforts basis in connection with the Brokered Financing. As compensation for acting as agent, Jacob received a cash commission (the "Agent's Commission") equal to 6% (3% for Units issued through a President's list) of the gross proceeds raised, and compensation options (the "Agent's Options") entitling the agents to purchase Units (the "Agent's Units") of the Company equal to 6% (3% for President's list) of the number of securities sold in the Brokered Financing, exercisable at a price of $0.70 per Agent's Unit and expiring 24 months from closing of the Brokered Financing. The Agent's Units have the same terms and conditions as the Units purchased by subscribers in the Brokered Financing.
The non-brokered private placement financing (the "Non-brokered Financing") of Units was for an aggregate gross proceeds of $472,993.50 based on the sale of approximately 675,705 Units at a price of $0.70 per Unit. In connection with the Non-brokered Financing, the Company paid an aggregate of $6,300 in finder's fees, and issued finder's options (the "Finder's Options") entitling finders that assisted with the Non-brokered Financing to purchase an aggregate of 4,500 Units (the "Finder's Units"). The Finder's Options are exercisable at a price of $0.85 per Finder's Option and expire 24 months from closing of the Non-brokered Financing. The Finder's Units have the same terms and conditions as the Units purchased by subscribers in the Non-brokered Financing.
The Units, Warrants, Agent's Units and Finder's Options (including the underlying common shares and warrants) issued under the Brokered Financing and the Non-brokered Financing are subject to a four-month hold period, which expires April 23, 2015. The closing is subject to the fulfillment of certain conditions, including customary post-closing filings with the TSX Venture Exchange.
Prior to these two financings, the company had sufficient capital to execute on its previously stated business plan. The capital secured from both these debt and equity financings will be instrumental in helping the Company to produce even greater quantities of high quality, consistent and organic product to satisfy even greater demand it is realizing for its products. These financings will also provide greater control over the main operating assets of the Company.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of medical marijuana in Canada. Organigram is focused on producing the highest quality, condition specific medical marijuana for patients in Canada. Organigram's facility is located in Moncton, New Brunswick and the Company is regulated by the Marihuana for Medical Purposes Regulations.
On behalf of the board of directors,
Denis Arsenault, Director and CEO, Organigram Holdings Inc.
For further information please visit www.organigram.ca.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors - including the availability of funds, the results of financing efforts, the results of exploration activities - that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.