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The 3 Financings You Need to Know About This Week (June 15-19)

June 19, 2020 03:17 PM PST

This was an especially busy week for cannabis financings. Here we delve into deals from Charlotte's Web Holdings Inc. (TSX: CWEB) and Zenabis Global Inc. (TSX: ZENA), as well as Tudor Gold Corp.'s (TSX-V: TUD) recent financing with billionaire Eric Sprott.

1. Charlotte's Web Holdings Inc. (TSX: CWEB)

  • Gross Proceeds: $77.63 million (oversubscribed)
  • Sector: Cannabis
  • Units issued: 11.5 million units 
  • Type: Special units
  • Price: $6.75
  • Warrants: One-half, $8.50, 2 years
  • Agents: Canaccord Genuity Corp.
  • Use of Proceeds: Working capital
  • Link to the press release

Leading CBD producer Charlotte's Web Holdings Inc. (TSX: CWEB) closed an oversubscribed $77.63 million underwritten public offering on Thursday, with proceeds earmarked for working capital.

The company issue 11.5 million units at $6.75 each, a slight premium to its stock price of $6.29 at the time of writing. Each unit included a common share and a half-warrant, with full warrants exercisable at $8.50 for 2 years. The initial offering was for $67.5 million in units, but the underwriters fully exercised their over-allotment option.

Shares of Charlotte's Web have been up and down lately, following the company's release of its Q1 earnings, in which it reported US$11.5 million, or 11 cents per share, on revenue of US$21.5 million, compared to last years' Q1 earnings of US$2.3 million, or 3 cents per share, on revenue of US$21.7 million. The company also recently filed a patent for a new variety of hemp created by its co-founder, Joel Stanley, and completed its acquisition of Abacus Health.

Charlottes Web shares are down 36.72% for 2020, and down 21.96% since the overnight marketed offering was initially announced.

2. Tudor Gold Corp. (TSX-V: TUD)

  • Gross Proceeds: $9.3 million
  • Sector: Gold
  • Units issued: 6.65 million
  • Type: Flow-through shares
  • Price: $1.40
  • Warrants: None
  • Agents: Non-brokered
  • Use of Proceeds: Flow-through expenses
  • Link to the press release

Tudor Gold Corp. (TSX-V: TUD) announced plans to complete a $9.3 million non-brokered private placement on Monday with billionaire mining investor Eric Sprott.

The company plans to issue 6.65 million flow-through shares at $1.40 each. Following the close Tudor expects the deal to increase Mr. Sprott's stake in the company from 16.6% to 19.9%. This is the fifth private placement Tudor has completed with Mr. Sprott since the beginning of 2019. 

Shares of Tudor have jumped in recent weeks following the beginning of the company's new 20,000-metre drill program at its Treaty Creek deposit, for which it hopes to have a resources estimate by the end of the year. Previous assays from the project include 1.27 grams of gold per tonne (g/t Au) over 252 metres and 1.09 gold-equivalent ounces (g/t AuEq) over 568.3 metres, both wide grades that have encouraged investors to climb aboard. The company also recently completed its acquisition of a set of claims in BC's Skeena Mining Division from American Creek Resources Ltd. (TSX-V: AMK).

Shares of Tudor Gold are up 96.2% for 2020, and up 13.97% since announcing the deal with Mr. Sprott.

3. Zenabis Global Inc. (TSX: ZENA)

  • Gross Proceeds: $20.49 million (upsized)
  • Sector: Cannabis
  • Units issued: 157.6 million
  • Type: Special units
  • Price: 40 cents
  • Warrants: Full, 16 cents, 5 years
  • Agents: AltaCorp Capital Inc., Eight Capital
  • Use of Proceeds: Working capital, debt repayment
  • Link to the first press release
  • Link to the second press release

Cannabis producer Zenabis Global inc. (TSX: ZENA) announced a $15 million offering on Wednesday, quickly upsizing it to $20.49 million.

The company plans to issue up to 157.6 million units at 13 cents each, through a syndicate of underwriters led by AltaCorp Capital Inc. and Eight Capital. Each unit will include a common share and a full warrant, exercisable at 16 cents for 5 years.

Shares of Zenabis have remained mostly flat since November, as the company has repeatedly issued securities to lighten its debt load, including a recent short-term loan of $7 million with payment due by July 20. The company expected to pay the loan off by selling its Delta facility, though this hasn't yet transpired. 

The stock is down 51.35% for 2020, now trading at 9 cents per share.

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