High Hampton Holdings Corp. (CSE: HC) announced on Friday, its intention to complete a non-brokered private placement for gross proceeds of up to CAD$ 7.5 million. According to their original statement, the company planned to issue up to 12.5 million units, with each consisting of one common share priced at CAD$0.60 and stock warrant. The warrant allows the holder to purchase another common share anytime within 24 months of the offering’s closing date. The warrant redemption price is $0.90 per share. However, in a new announcement on Monday, High Hampton stated they would expand the offering to 20 million units for possible gross proceeds of CAD$12 million.
In a recent interview with Investing News Network (INN), High Hampton CEO David Argudo spoke of the company’s plans for California’s new adult-use market. “Our business strategy is to derisk the level that is associated in participating in California and especially in the states where you have federal uncertainties,” Argudo said in a comment to INN.
As for the private placement, it is only available to existing shareholders. Additionally, existing shareholders must live within provinces that allow special offerings with prospectus exemptions.
The company is only making the offering to shareholders of record as of the close of business on February 8, 2018.
There is no minimum offering size. The maximum number of proposed units is 20 million.
A portion of the funds from the placement will go towards phase one of the company’s Coachella development, with the remainder going towards financial, strategic growth opportunities and general and corporate purposes.
High Hampton’s shares currently trade on the Canadian Stock Exchange. However, in a move to reach more U.S. investors, the company recently applied for a listing on the OTCQB to allow for the trading of its shares on a U.S. dollar-denominated basis.
About High Hampton Holdings
According to their website, High Hampton is a cannabis sector investment company looking for opportunities in California. Currently, they are only focused on one opportunity.
Through a wholly-owned subsidiary, CoachellaGro Corp., High Hampton is participating in developing a 10.8-acre property in California city of Coachella. This is the same city that is famous for the annual Coachella festival.
The City of Coachella, through a city ordinance, is working to set up a 90-acre complex devoted to the cultivation of plants and development of products for the medical marijuana industry in California. The intent is to have a campus where all the participating companies can share many of the necessary business expenses such as security.
CoachellaGro is still in the in the process of obtaining a conditional use permit.
The city staff has commented on the facilities design. No significant changes to the engineering plan are required. High Hampton hopes to appear before the City Planning Commission within six weeks. Following Planning Commission approval, the plans go to the City Council for a vote.
After full city approval, CoachellaGro must apply to the state for all the appropriate medical marijuana licenses and build the facility. It is a long series of steps for the company before they can harvest a greenhouse crop in 2018.
Contrary to the company’s plans, High Hampton’s investor presentation predicts falling demand for medical marijuana in California.
High Hampton fell 4.41 percent on lower than the average trading volume on Monday, closing the day at CAD$0.65 per share.