Verus International Announces a New Equity Funding Initiative: Muted Market Reaction
Many stocks managed to record gains on Thursday, but one of the more notable gainers was Verus International (OTCQB: VRUS). The company provided a significant update with regards to fresh equity investment and notes payable information, which resulted in a rally in the stock.
New Equity Investment And Notes Payable Update
The announcement proved to be a major trigger for the Verus stock, and it rallied by as much as 5% on the back of it. Considering the gains made by the stock, it could be worthwhile on the part of investors to take a closer look at the company and the latest developments surrounding it.
The company provided an update on the equity funding drive that is aimed at canceling out the debts on Verus’ books. The company stated that it had reached an agreement with an institution by way of which it is going to raise $5 million by periodically selling its shares at a 5% discount from the market price.
The company is going to use the money to extinguish its existing debt and also direct some of it to take care of working capital needs. However, that is not all. Verus also announced that since it expects U.S. shipments to rise substantially in the third and fourth quarters of the year. Hence, the company is also expecting to create a domestic, commercial credit line.
The company also notified that it is currently in the process of renegotiating the terms related to the note that was supposed to expire on July 1. Verus stated that it expects that an amendment to that note is expected to be reached in the near future. At this point, Verus is a negotiation with other noteholders as well with regards to an amendment to the terms.
New Pachyderm Labs Division
Towards the end of June, the company had made another key announcement. Verus announced the launch of a new division named Pachyderm Labs, which will be focussed on the fast-growing CBD sector.
The new division will be based out of Verus’ location in Houston, Texas, and will function as both a warehouse as well as a manufacturing facility. Pachyderm will be involved in the launching of two brands, ‘U Try CBD’ and ‘Elephant Hemp.’ Under those two brands, the company is going to offer a wide range of products starting from health-boosting oils, creams, CBD edibles, and lotions, among others.
The products have been designed in such a way that it can be sold by both mass retailers and also CBD focussed retail stores. In June, the company also announced its financial results for the second fiscal quarter, and it gave Verus another boost. Revenues came in at $4.6 million, which reflected a year on year rise of 58%. Operating expenses soared from $0.7 million to $7.7 million.
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