Naturally Splendid Enterprises (CVE:NSP)(OTCQB:NSPDF) says it will now raise up to $1.75 million from its private placement financing first announced at the end of last month, up from a maximum of $1.5 million previously.
The offering will now consist of a minimum of 6.0 million units, and up to 7.0 million units, at a price of 25 cents apiece, for total proceeds of $1.5 to $1.75 million.
Each unit will be made up of one common share and one half of a share purchase warrant. Every whole warrant will allow the holder to buy an additional common share at a price of 40 cents, for a period of two years.
The company said the new funds will be used to satisfy the $660,000 balance under its agreement to license hemp and cannabinoid extraction and formulation technologies with Full Spectrum Laboratories and Boreal Technologies.
The proceeds from the private placement, which still requires regulatory approvals, will also be used for product development, as well as for general working capital needs.
Under the terms of the recent deal signed, Naturally Splendid will pay $725,000 to Boreal and will issue to Full Spectrum a number of shares equal to $1.025 million, divided by the greater of 35 cents of a 20 percent premium above the closing price on closing of the transaction.
It will then gain access to a worldwide license to manufacture, commercialize and sell products based on Full Spectrum's proprietary technology, both on an exclusive and non-exclusive basis.
The deal includes a license to the first issued US patent for water-soluble cannabinoids --- a major part of Naturally Splendid's plan to develop and sell cannabinoid-based nutraceutical and pharmaceutical products and therapies.
The initial suite of commercial hemp-based cannabinoid nutraceutical products will include micro-encapsulated hemp oil drops with high cannabidol (NYSE:CBD) expression, CBD-based soaps, lip balms and skin creams, and hemp-extracted, cannabinoid-based functional beverages.
There are more than 80 cannabinoids in industrial hemp and marijuana, with one of the most prominent and sought-after known as CBD. The cannabis compound is appealing because of its non-psychoactive, anti-inflammatory and anti-epileptic effects, meaning patients can benefit without lethargy or dysphoria.
After the initial launch of the suite of products in early 2015, Naturally Splendid and its partners are planning to develop topical pain ointments, a hemp-derived CBD supplement and sun block lotions, they said. None of the products will include THC, another prominent cannabinoid, with the companies focusing instead on using water-soluble cannabidiols.