BAT Exercises Top-Up Rights to Invest $6.3 Million Resulting in an Increase in Equity Position from 18.8% to 19.5%
Organigram Holdings Inc. (TSX:OGI) (NASDAQ:OGI) revealed Tuesday that BAT has invested an additional CA$6.3 million ($4.97 million) into Organigram to enhance its equity ownership position in the company from 18.8% to 19.5% as of December 31, 2021 by exercising its rights pursuant to an investor rights agreement.
The investor rights agreement was entered into between Organigram and BAT in connection with the formation of the product development collaboration between the two companies and the strategic investment of CA$221 million made by BAT in Organigram in March 2021. The agreement allows BAT periodic top-up rights to permit maintenance of its percentage ownership following certain issuances. The price per share offered to BAT is consistent with the price per share at which the relevant issuances were made subject to maximum discount requirements of the TSX.
The exempt issuances by Organigram in the three-months ended December 31, 2021 related primarily to the acquisition of Laurentian Organic Inc. pursuant to which 10.89 million shares were issued. In addition, 83,408 shares were issued in connection with exercises of share-based compensation.
The Equity Top Up
BAT has purchased 2.66 million common shares in Organigram at an average price of $2.3868 per share for gross proceeds of $6.35 million and now holds a pro-forma 19.5% equity interest. The pro-forma equity interest as at the date hereof is 19.4%.
“Innovation is an important cornerstone of Organigram’s core strategy and the Product Development Collaboration with BAT underscores our commitment to the development of disruptive, consumer-focused cannabis products,” stated Beena Goldenberg, CEO. “We are pleased with the successful launch of the PDC and the progress we are making so far.”
Organigram Maintains Strong Cash Position
Prior to the Equity Top-Up, Organigram enjoyed a strong cash position of CA$168 million reported as at the end of Fiscal Q1-2022 (November 30, 2021). The CA$6.3 million received from the Equity Top-Up further strengthens the company’s balance sheet for general corporate purposes.
