Cloud DX (TSX-V:CDX, OTCQB:CDXFF) Inc said it has struck an agreement with Echelon Wealth Partners Inc under which Echelon has agreed to act as lead agent and sole book-runner for a syndicate of investment dealers for the brokered private placement of up to 3,000 convertible debenture units at a price of $1,000 per unit for gross proceeds of up to $3 million.
The North American disruptor in virtual care based in Kitchener, Ontario said it plans to funnel the proceeds into sales, marketing, research and development and general working capital.
The agents have an option to sell up to 450 additional convertible debenture units for maximum aggregate gross proceeds under the offering of $3.45 million, said the company.
READ: Cloud DX says subscription revenue was up 90% for fiscal 2Q 2021
Following the offering, each convertible debenture unit will be comprised of $1,000 principal amount unsecured convertible debenture and 1,430 share purchase warrants. The debentures will mature 36 months from the date of issuance and shall bear interest at a simple rate of 10% per annum. Interest will be payable quarterly on the last business day of each quarter, starting on December 31, 2021.
The principal amount of the debentures, or any portion of it, may be converted by the holder into common shares at a conversion price of $0.35 per share at any time prior to the maturity date. Each warrant will entitle the holder to one share at a price of $0.50 per share for a period of 24 months from the closing date of the offering.
Cloud DX said it has agreed to pay the agents a cash fee equal to 8% of the gross proceeds raised from the offering (reduced to 3% for subscribers identified on the company's president's list); and issue to the agents such number of non-transferable share purchase warrants as is equal to 8% of the gross proceeds raised from the offering divided by the conversion price. Each agents' warrant will entitle the holder to acquire one share at an exercise price of $0.35 per share for a period of 24 months from the closing date of the offering.
The company expects the offering to close on or about September 23, 2021.
The convertible debenture units, debentures, warrants, and any securities issuable on conversion or exercise, will be subject to a statutory hold period of four months and one day from the date of issuance of the convertible debenture units.
The offering is subject to final approval by the TSX Venture Exchange.
The company's Connected Health remote patient monitoring platform is used by healthcare enterprises and care teams across North America to virtually manage chronic disease, enable aging in place and deliver hospital-quality post-surgical care.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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