Zenabis Global Inc provides this update on certain operational matters.
"Construction at Zenabis Atholville is progressing on schedule. The remaining conversion work is expected to add an additional 25,000 kg in annual production capacity, which will become operational in stages in the second quarter of 2019," the team with the company explains. Additionally, Zenabis points out that it has submitted a license amendment for five additional flower rooms at Zenabis Atholville. "This amendment is expected to increase the run-rate production capacity of Zenabis Atholville to 12,500 kg per year by the end of April 2019 (at this point in time the total run-rate production capacity of Zenabis is expected to be 13,400 kg per year)."
Conversion of Zenabis Langley is split into the following stages: the first 10 acres of greenhouse (“Site A”); and the remaining 38 acres of greenhouses (“Site B”).
"Construction is currently focused on Site A. To date, we have spent $3,700,000 of the approximately $30,000,000 budget for Site A. Approximately 41.7% of the Site A buildout will be funded by the BMO term loan. We expect that approximately half of Site A will be operational by June 2019 with a run-rate production capacity of 43,050 kg per year. We expect that Site A will be fully operational by early in the third quarter of 2019, representing incremental production capacity of 43,050 kg per year (the total Zenabis Langley run-rate production capacity at this point of time is expected to be 96,100kg)."
In addition to that, Zenabis expects that work will begin at Site B late in the second quarter of 2019 or early in the third quarter of 2019. Zenabis’ budget for the Site B conversion is approximately $120,000,000.
Moreover, the company expects to close the previously announced private placement of 15,000 unsecured debentures on or about March 20, 2019. "Eight Capital has agreed to purchase the debentures on a “bought deal” private placement basis pursuant to applicable securities laws exemptions, at a price of $1,000 per debenture for gross proceeds of $15,000,000. Also, Eight Capital has agreed to offer for sale an additional 60,000 convertible debentures for additional gross proceeds of $60,000,000. The additional debentures will be issuable in tranches at the option of the company", the company continues.
Finally, the company has filed a preliminary short form base shelf prospectus with the securities commissions in each of the provinces of Canada, except Québec.
The team with the company explains that "The Shelf Prospectus, when made final, will allow the Company to offer up to $100,000,000 of common shares, preferred shares, debt securities, warrants and units, or any combination thereof, from time to time during the 25-month period that the (final) Shelf Prospectus is effective. The Company filed this Shelf Prospectus in order to maintain financial strength and flexibility going forward but has not entered into any agreements or arrangements to authorize or offer any securities under the Shelf Prospectus at this time. The specific terms of any future offering of securities, including the use of proceeds from any offering, will be established in a prospectus supplement to the Shelf Prospectus, which supplement will be filed with the applicable securities regulatory authorities."
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