Australis Capital Inc (CSE:AUSA, OTCQB:AUSAF) - doing business as AUDACIOUS - said it has entered into a capital commitment agreement with global investment group, LDA Capital Limited to provide the company with up to C$10 million in committed equity capital.
The total commitment is renewable at the company's option, for an additional C$10 million under the same terms and conditions of the agreement.
AUDACIOUS said the funding instrument will allow it to deploy cash on an as-needed basis, rather than fully diluting existing shareholders at once for an amount of cash the company may not need given other financing options available to the company over the term of the agreement. The funds will support the company's execution on its ambitious growth strategy and will strengthen its balance sheet, it added.
In a statement, Terry Booth, AUDACIOUS CEO, said: "With this new Agreement, we now have access to important additional funds that will enable us to accelerate our growth. I am pleased we were able to work with LDA and devise a structure that provides us with more flexibility and less dilution than the original agreement did. AUDACIOUS is firing on all cylinders, and with additional fuel in the tank, we will be able to further our position in the various markets we are and intend to operate in."
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The agreement grants AUDACIOUS the right, at its discretion, to issue shares in tranches for up to C$10 million. It allows AUDACIOUS to access capital on a flexible basis by allowing the company to manage the timing and size of each capital call. In every capital call, AUDACIOUS will set a floor price - at its discretion - for the shares issued to LDA Capital ensuring the shares are issued at a price aligned and with the best interest of all shareholders.
The issue price of the shares under any capital call will be 90% of the average volume-weighted average price (VWAP) in the 30-trading day period after the issue of the capital call by the company.
LDA Capital has agreed not to hold in excess of 19.9% of the common shares of AUDACIOUS. LDA Capital is a global alternative investment group with expertise in cross-border transactions worldwide. Its team has dedicated their careers to international and cross border opportunities having collectively executed over 250 transactions in both the public and private middle markets across 43 countries with aggregate transaction values of over US$10 billion
As part of the agreement, LDA Capital will also receive warrants for up to 5,040,556 new common shares of AUDACIOUS at an exercise price of C$0.1485 per ordinary share, subject to customary adjustments. The warrants will have a term of three years and four months from the date of signing the agreement.
The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States or to US Persons unless registered under the US Securities Act and applicable state securities laws or an exemption from such registration is available.
AUDACIOUS is a next-generation MSO (multi-state operator) growing the cannabis industry of tomorrow from the ground up, led by industry pioneer Terry Booth and an accomplished management team with proven industry track records.
With operations that range from providing industry-leading sustainable cultivation design and optimization to retail storefronts, growing flower in-house, and manufacturing award-winning brands, AUDACIOUS has products and solutions for everyone.
Contact the author at jon.hopkins@proactiveinvestors.com