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Glass House Brands Stock (OTC:GLASF) (NEO: GLAS.A.U), a leading U.S. vertically integrated cannabis company, recently finalized a $15 million Series D preferred stock offering. This sum includes about $4.1 million in new capital on top of the initial $10.9 million.
The investment will expedite the retrofitting of Greenhouse 5 at the SoCal Farm and strengthen the company’s financial foundation.
Investors in the Series D are entitled to a 15% annual cash dividend for the first five years, increasing to 20% thereafter. Each $1,000 face value share comes with 200 warrants. These warrants allow the purchase of company equity shares at $6.00 each for five years, with potential acceleration conditions based on share price performance.
A noteworthy aspect of the offering’s second closing is the participation of company insiders. Directors, officers and major shareholders subscribed to 70 shares of Series D preferred stock, receive 14,000 Warrants. Despite being a related party transaction, the company leveraged exemptions under Canadian securities laws, keeping the transaction within 25% of its market capitalization.
Kyle Kazan, co-founder and CEO, emphasized the importance of this self-managed capital raise. “Saving cash on brokerage fees and investing it in our business has been a proud achievement,” Kazan stated. He also highlighted the substantial operating cash flow of nearly $22 million generated in 2023’s first three quarters.
This capital influx will fast-track the Greenhouse 5 retrofit, with planting expected in Q1 2024 and product sales by Q2 2024. Kazan anticipates this will enhance Glass House‘s competitiveness and significantly boost cash flow.
The net proceeds, approximately $15 million, are earmarked for the Greenhouse 5 retrofit and Greenhouse 1 nursery expansion. The remaining funds will support working capital and general corporate purposes.
GLASF Price Action
GLASF's shares were trading 1.74% higher at $4.69 per share at the time of this writing around 11:30 PM ET Wednesday.
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