Under the offering, the company will offer up to 3,000 convertible debenture units at the issue price of $1,000 per convertible debenture unit for gross proceeds of up to $3.0 million. Each convertible debenture unit will be comprised of: US$1,000 principal amount of 10% senior secured convertible debentures of the company which will be convertible into common shares of the company at a conversion price of $0.15 per common share, subject to adjustment in certain events and maturing on the date that is three years from the date the convertible debenture units are issued and 3,333 common share purchase warrants of the company. Each warrant will entitle the holder thereof to purchase one common share at a price of $0.20 per common share until the maturity date.
Acceleration Of The Expiry Date
Provided that if, at any time prior to the expiry date of the warrants, the volume weighted average trading price of the common shares for five consecutive trading days on the Toronto Stock Exchange, or other principal exchange on which the common shares are listed, is greater than US$0.60, the company may, within 15 days of the occurrence of such event, deliver a notice to the holders of warrants accelerating the expiry date of the warrants to the date that is 30 days following the date of such notice. Any unexercised warrants shall automatically expire at the end of the accelerated exercise period.
Conversion Of The Principal Amount
The company may force the conversion of the principal amount of the then outstanding convertible debentures at the conversion price on not more than 60 days’ and not less than 30 days’ notice should the daily volume weighted average trading price of the common shares for the consecutive five trading days on the exchange, or other principal exchange on which the common shares are listed, be greater than US$0.40 preceding the notice.
On and after the date that is 24 months after the date of issuance of the convertible debentures, the company shall have the right to redeem the convertible debentures either partially or in full in cash at 110% of the principal amount of the convertible debenture plus accrued interest.
The convertible debentures shall bear interest at a rate of 10.0% per annum from the date of issue, payable quarterly in arrears in cash or common shares at the discretion of the company. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months. The first interest payment shall be on March 31, 2022 for the period from the closing date of the offering to March 31, 2022.
The company plans to allocate the net proceeds of the offering to working capital, repayment of debt and/or general corporate purposes.
Closing of the offering is expected to occur on or about the week of March 28, 2022.