Cansortium Announces Second Amendment to Convertible Notes
The Company had previously reached an agreement with the holders of the Notes (the "Noteholders") to extend the maturity date of the Notes to
Further to the Company's press release dated
The Company issued common shares of the Company at a deemed value of U.S.
The Company also agreed to pay an extension fee equivalent to 1% of the total principal amount and accrued interest outstanding on the Notes as at
Other significant amendments to the Notes include the following:
- Payment of Interest post-closing. Interest on the Notes shall be paid quarterly commencing at the end of the first quarter of 2021, 100% in cash or 50% cash and 50% in the common shares of the Company at the volume weighted average price of a common share for the ten trading days preceding the end of each quarterly period, with such option to either pay in cash or a mix of cash and shares to be at the discretion of the Company.
- Conversion Price of Notes. The conversion price of the Notes was amended from U.S.
$2.00 to U.S.$0.60 . The Company may force conversion if the Company's common shares trade at U.S.$0.96 or higher for 30 consecutive trading days and the average daily trading volume equals or exceeds 100,000 shares during such period. - Conversion. The Notes were previously convertible into notes units ("Note Units"), with each Note Unit comprised of one common share and one-half of one common share purchase warrant, where each whole warrant was exercisable at U.S.
$2.60 untilMarch 21, 2021 (for a total of approximately 2,500,000 warrants). The Notes were amended to be convertible into common shares of the Company only (at U.S.$0.60 ). - Prepayment Right. The Notes may be redeemed at the option of the Company provided that the Company delivers a redemption notice to the Noteholder on or before
May 10, 2021 . The Company shall have the right to redeem a principal amount of the Notes from each Noteholder such that the aggregate principal amount of Notes being redeemed from all Noteholders, in the aggregate, shall be up to a maximum of U.S.$5,000,000 , subject to adjustment pursuant to the terms of the Note. - Most Favored Nation. If the Company renegotiates the terms of its convertible debentures previously issued pursuant to the secured trust indenture dated
May 23, 2019 , entered into among, inter alios, the Company andCapital Transfer Agency, ULC , as trustee, and such renegotiated terms have a more favorable conversion price or warrant exercise price than the Notes, then the conversion price of the Notes and the exercise price of the extension warrants shall be adjusted to the same conversion price and warrant exercise price as the renegotiated convertible debentures. - Security. Each Noteholder remaining following any prepayment contemplated above shall share the rights to the existing collateral under the Notes on a pari passu basis with any new financing, provided that the aggregate principal amount of remaining Notes and any new financing shall not exceed U.S.
$10,000,021.50 .
The Company's indirect wholly-owned subsidiary,
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Forward-Looking Information
Certain information in this news release, may constitute forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in the public documents of the Company available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
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