Little Green Pharma Ltd (ASX: LGP) has secured firm commitments for a $5 million placement from new and existing institutional and sophisticated investors.
The company’s Managing Director also committed an additional $50,000 to the Placement subject to shareholder approval at an Extraordinary General Meeting to be announced in due course.
“This a very exciting outcome for the company. The proceeds of the Placement allow us to fully repay the outstanding Loan Note with Canopy Growth Corporation in relation to our 2021 Denmark facility acquisition, which both strengthens our balance sheet and removes associated interest expenses,” CEO, Fleta Solomon, said.
“In addition, the business will use the balance of the funding to continue delivering on its growth trajectory and focus on achieving cash-flow break-even. We are confident the business’s current momentum will allow it to continue growing sales and leveraging domestic and international medicinal cannabis market opportunities.”
Under the Placement, the Company will issue new fully paid ordinary shares at $0.18 per share.
Use of Funds
The company will use the funds from the Placement to repay the balance of the Canopy Loan Note and for working capital and costs of the offer.
LGP continues its strong focus on targeting a break-even position, including by executing against its existing and proposed new supply agreements into Europe and driving increased sales in Australia, while continuing to identify ways to right-size and reduce costs in its operations. The removal of the Canopy Loan Note also refreshes the Company’s balance sheet for future growth.