Levitee Labs (CSE:LVT) Inc has announced the completion of the sale of the right, title and interest in all of the assets of Earth Circle Organics Chain Inc to B&W Acquisition Corp on August 29, 2022.
Under the terms of the asset purchase agreement, dated July 22, 2022, the purchaser had agreed to acquire the Earth Circle assets via a cash payment of US$329,950; deferred cash payment of $100,000 to be released at a future date following the closing; a credit for assumed liabilities paid at the closing; and the forgiveness of all unpaid prior debts owed by the company.
Levitee also said it has agreed to amend and restate a financing agreement dated October 20, 2021, with RiverFort Global Opportunities PCC Ltd, under which it had drawn down an initial $2.5 million tranche.
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The company said under the amendments, the loan will now mature on June 11, 2024, and will not incur any interest unless the company defaults on its obligations.
In addition, Levitee has issued to the lender 9,487,280 common shares at 2.5 cents each in satisfaction of $237,182 of tranche 1. The lender will also be entitled to request that some or all of 6,512,720 common shares at 2.5 cents each be issued in satisfaction of $162,818 owing under tranche 1, on condition that Levitee is given 60 days prior written notice.
Levitee shall repay the remaining amount due under tranche 1, following the satisfaction of $237,182 in conversion shares and $162,818 in repayment shares.
The amended terms also give the lender the option to convert some or all of the tranche 1 net amount into common shares, following which the company has the option to satisfy the conversion by (i) paying in cash where the amount of cash shall be determined by multiplying the number of common shares issuable under the conversion by the closing price of the common shares on the Canadian Securities Exchange as of the date of the notice of conversion; or (ii) issuing to the lender such number of common shares as is equal to the amount of tranche 1 net amount to be converted divided by 2.5 cents.
The lender may, at its option, where the company has failed to make a payment in accordance with the amended terms, elect to convert the amount of the missed payment into common shares at a price equal to the greater of (i) the volume weighted average price (VWAP) over the 20 trading days immediately preceding the date of notice to convert the missed payment, less the maximum discount permitted under the CSE rules, subject to a maximum price of 5 cents; and (ii) 2.5 cents.
Any subsequent advances under the loan will be on terms to be agreed upon between the parties.
In connection with the amended and restated loan agreement, Levitee also issued to the lender 1,378,788 common share purchase warrants, whereby each warrant entitles the holder to acquire one common share at 5 cents each until October 20, 2024.
Levitee is establishing itself as a leader in the integrative wellness space. The company aims to transform mental health and addiction treatments through integrating evidence-based complementary medicines into the traditional infrastructure of mental health and addiction services.
Contact the author at jon.hopkins@proactiveinvestors.com