Vicinity Motor Corp has announced non-brokered financing of unsecured debenture units to raise C$10 million.
The company said it will use the proceeds for general working capital and to fund contract requirements for recently received Vicinity bus orders.
"We are pleased to announce this friendly debt financing, made possible by the support from some of our key shareholders," said CEO William Trainer in a statement.
READ: Vicinity Motor wins over $15.5M in orders for 38 Vicinity Classic buses from Quebec transit operators
"Our core business has seen robust growth year-to-date, the construction of our Buy-America compliant facility in Washington State is well underway and we continue to expand into exciting new products lines and geographies. I look forward to continued execution in the months ahead as we strive to create sustainable, long-term value for our shareholders," Trainer added.
Under the scheme, each unit will be sold at an offering price of $985 apiece and will consist of one 8% unsecured convertible debenture of the company in the principal amount of $1,000.
Also, interest will be payable upon maturity being 12 months from the date the debentures are issued and 40 common share purchase warrants expiring 12 months after the date of issuance.
The debentures will be repaid in cash at maturity. Each warrant will entitle the holder to purchase one common share for $7.50 at any time up to 12 months following the closing date of the offering, subject to adjustment in certain events.
The debentures, in whole or in part, will be convertible into common shares at the option of the holder only if there is an event of default that is uncured for a period of 10 business days, at a conversion price equal to the market price on the date the event of default. Holders converting their debentures will receive accrued and unpaid interest to the date of actual conversion.
The company will have the right at any time, on 10 days notice, to prepay the debentures, in whole or in part, pro-rata among the holders. The repayment shall be in cash, against the principal amount of the debenture plus accrued and unpaid interest.
The company anticipates paying an administrative fee(s) of 0.5% of the funds raised, or a portion, to eligible parties under applicable securities laws.
The offering of the units is subject to the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The company expects to complete an initial closing of the offering shortly.
The debentures, warrants, and shares issuable upon the exercise of the warrants will be subject to a statutory resale restriction of four months and one day from the date of closing. The company may pay finders' fees in accordance with the exchange's policies.
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