Canntab Therapeutics Ltd (CSE:PILL, OTCQB:CTABF) said it has closed a non-brokered private placement of secured convertible debentures of the company, under which the company issued and will issue debentures for gross proceeds of $1,312,000.
The proceeds will be used to fund working capital for the company, and for general corporate purposes, Canntab said.
The debentures are convertible into common shares of the company at a price of $0.70 per share and will mature two years from the date of issuance.
The debentures will bear interest at a rate of 10% per annum from the closing date, paid upfront in cash for the initial 6 months, thereafter payable quarterly in cash on the last business day of each calendar quarter. Any accrued but unpaid interest is convertible into shares, at the option of the holder at the conversion price at any time following the closing date.
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Beginning on the date that is four months and one day following the closing date of the offering, the company will have the right to prepay or redeem a part or the entire principal amount of the debentures plus any accrued and unpaid interest at any time by providing a minimum of 20 days and a maximum 60 days of redemption notice prior to the redemption date. The conversion price will be subject to customary adjustments in certain events.
Canntab also has the right to force the conversion of all of the principal amount of the then outstanding debentures at the conversion price upon giving the debenture holders not less than 30 days advance written notice, should the volume-weighted average trading price of the shares on the Canadian Securities Exchange be greater than $1.05 per share for the preceding 15 consecutive trading days.
The debentures are secured by way of an agency and interlender security agreement made in favour of a collateral agent acting as agent for all of the holders of the debentures, and ranking pari passu with the secured convertible debentures issued by the company on December 30, 2020, granting a security interest in substantially all of the company's assets.
There were no broker warrants issued or commission paid in connection to the offering. All securities issued are subject to a statutory hold period of four months and one day from the closing date of the offering.
Warrant extensions and other business
In addition, Delta 9 announced the extension to the expiry date of a total of 5,687,000 outstanding common share purchase warrants originally issued as part of a private placement that closed on February 27, 2020, and on March 12, 2020. The warrants entitle the holders to purchase one share at a price of $0.75 each until February 27, 2022, and March 12, 2022, respectively.
The company said it has amended the expiry date of the warrants to May 18, 2022. All other terms of the warrants will remain unchanged. Holders are advised that replacement warrant certificates will not be issued and that the original warrant certificate must be presented to the company in order to effect the exercise of such warrants.
Furthermore, under the terms of the 2020 debentures and the warrants issued pursuant to that prior offering, the conversion price for the 2020 debentures have been adjusted to match the conversion price, and the exercise price of the 2020 warrants have been adjusted to match the exercise price. All other terms of the 2020 debentures and the 2020 warrants remain unchanged.
Delta 9 also announced that Barry Polisuk has resigned as corporate secretary of the company which will reduce the extent of his administrative duties. The company has appointed Richard Goldstein, its current CFO to fill the vacancy of corporate secretary. Polisuk remains active with the company as its chairman of the board of directors, it added.
Canntab Therapeutics is a Canadian phytopharmaceutical company focused on the manufacturing and distribution of a suite of hard pill cannabinoid formulations in multiple doses and timed-release combinations.
Canntab's proprietary hard pill cannabinoid formulations provide doctors, patients and consumers with medical-grade solutions which incorporate all the features one would expect from any prescription or over the counter medication sold in Canadian pharmacies. These will include the following formulations: once a day and extended-release, both providing an accurate dose and improved shelf stability. Canntab holds a Cannabis Standard Processing & Sales for Medical Purposes Licence, and a Cannabis Research Licence from Health Canada.
Contact the author at jon.hopkins@proactiveinvestors.com