PlantX Life Inc said it has obtained debt financing whereby it may borrow a principal amount of up to $10 million from an arm's length creditor under the terms and subject to the conditions of a secured convertible promissory note.
With this financing, the company added, it is no longer pursuing its non-brokered private placement that was previously announced on July 13, 2022.
"We listened to the feedback of shareholders, and have secured financing at attractive terms that is a more appropriate way for PlantX to fund its operations and plans," said PlantX CEO, Lorne Rapkin in a statement.
The company said the convertible note will bear interest at a rate of 5.0% per annum, payable monthly and matures on May 1, 2024. Proceeds under the convertible note will be advanced by the holder to PlantX Life, at the request of the company, from time to time, provided that any advance shall be for a minimum of $250,000.
READ: PlantX Life to raise up to C$12M in non-brokered private placement
The convertible note is secured by a general security interest over substantially all of the present and after-acquired personal property of the company and certain subsidiaries and guaranteed by the same subsidiaries.
The company said it intends to use the proceeds for working capital and general corporate purposes.
The holder may, at any time up to and including the maturity date, convert, in whole or in part, the then outstanding principal and accrued and unpaid interest into common shares of the company at a conversion price equal to the closing trading price of the common shares on the Canadian Securities Exchange (CSE) on the last trading day immediately prior to the delivery of a written conversion notice by the holder, provided that in no event shall the conversion price per common share be less than $0.05 each, subject to adjustment in accordance with the terms of the convertible note.
Additionally, in the event the ten-day volume weighted average trading price of the common shares on the CSE is greater than $0.25 at any time following the date issuance of the convertible note, then the company shall be entitled to convert all of the eligible conversion amount into common shares at the conversion price.
Notwithstanding the foregoing, the convertible note shall not be permitted to be converted by either the holder or the company, whether in whole or in part, where such conversion results in the holder having beneficial ownership of, or control or direction over, whether direct or indirect, or any combination thereof, equal to or more than 10% of the then issued and outstanding common shares, such amount taking into account any other common shares issuable under any other convertible securities beneficially owned, controlled or directed by the holder on a post-conversion basis.
The securities issued in connection with the convertible note are subject to a four-month hold period, in accordance with applicable Canadian securities laws.
As the digital face of the plant-based community, PlantX's platform is the one-stop shop for everything plant-based. With its fast-growing category verticals, the company offers customers across North America more than 5,000 plant-based products.
In addition to offering meal and indoor plant deliveries, the company currently has plans underway to expand its product lines with its own Juice and Coffee companies but the business is not limited to an e-commerce platform.
The company uses its digital platform to build a community of like-minded consumers and, most importantly, to provide education. Its successful enterprise is being built and fortified on partnerships with the top nutritionists, chefs and brands.
Contact the author at jon.hopkins@proactiveinvestors.com