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Stem Holdings closes 1st tranche of private placement of special warrants

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Stem Holdings closes 1st tranche of private placement of special warrants

Boca Raton, Fla.-based Stem Holdings Inc. raised gross proceeds of C$3.1 million at the close of the first tranche of its brokered and non-brokered private placement of 3,121 special warrants at C$1,000 apiece.

Each special warrant will be exchanged for 1 convertible debenture unit of the cannabis-focused real estate operator and manager. In turn, the convertible debenture unit constitutes of Stem's 8.0% senior unsecured convertible debenture with a C$1,000 principal amount and 167 common share purchase warrants.

Every common share purchase warrant may be exercised for the acquisition of 1 common share of Stem for C$3.90, during a 24-month term following the closing of the offering.

Additionally, Stem granted certain registration rights to buyers of the special warrants.

Special warrants that are not exercised 120 days after the offering's close may be exercised for 1.05 convertible debenture units per special warrant, instead of 1 convertible debenture unit, according to the Dec. 27 release.

The company will use net proceeds from the offering for expansion initiatives and general corporate purposes.

The brokered portion of the offering was completed by a syndicate of agents. Stem paid the lead agent a corporate finance fee comprising C$50,000 in cash and C$50,000 worth of common shares priced at C$3.00 apiece.