LSL Pharma Group Announces Brokered Private Placement of Convertible Debentures of Up to $4,000,000
21 Settembre 2023 - 5:23PM
LSL Pharma Group Inc. (TSXV: LSL) – (the “
Company”
or “
LSL Pharma Group”), a Canadian integrated
pharmaceutical company, announced today that it has entered into an
agreement with iA Capital Markets as the sole agent and sole
bookrunner ("Agent"), in connection with a “best-efforts” brokered
private placement offering of up to $4.0 million in unsecured
convertible debentures (the “Debentures”) of the Company at a price
of $10 per convertible debenture, to raise aggregate gross proceeds
between $2.0 million and $4.0 million (the
"
Offering").
The Debentures will be convertible into Class A
shares of the capital stock of the Company (the “Class A
Shares”) at the option of the holder at any time prior to
the close of business on the earlier of: (i) the last business day
immediately preceding the Maturity Date, and (ii) the date fixed
for redemption, at a conversion price of $0.70 per Class A Share
(the “Conversion Price”), subject to adjustment in
certain events.
The Debentures will mature 5 years from the
Closing Date and accrue interest from the Closing Date at a rate of
11% per annum (the “Base Rate”), compounded
semi-annually on the last day of April and October of each year.
Interest will be payable in cash semi-annually on the last day of
April and October, with payments commencing April 30, 2025. The
annual interest rate will be recalculated on April 30 of every
year, starting April 30, 2025 (each an “Interest Rate
Review Date”), and will be equal to the Base Rate less 100
basis points for each Business Objective achieved (as defined
below).
Business Objectives (each a “Business
Objective”):
|
1) |
|
The Company
will obtain FDA approval for its Steri-Med plant (one-time business
objective); |
|
2) |
|
The Company will complete the
acquisition of a business that: (i) complements the Company's
existing product offering and/or will create synergies with the
Company's existing business operations; and (ii) generated a
minimum of $5.0 million in revenue during the last twelve-month
period preceding the acquisition (one-time business objective);
and |
|
3) |
|
The Company will generate a
minimum of $30 million of revenue with a 20% EBITDA margin during
the fiscal period preceding the Interest Rate Review Date (annual
business objective). |
If, at any time following the date that is 24 months from the
Closing Date, for the preceding 20 consecutive trading days (i) the
daily volume weighted average trading price of the Class A Shares
on the TSX Venture Exchange (the “TSXV”) is
greater than 175% of the Conversion Price; and (ii) the average
daily volume of the Class A Shares traded on the TSXV is no less
than the number obtained when dividing the number of shares issued
upon conversion of the total amount of Debentures outstanding by
twenty (20), the Company shall have the option to convert all of
the principal amount outstanding of the Debentures at the
Conversion Price with at least 30 days’ prior written notice.
The Agent further shall have the option,
exercisable at any time up to two days prior to the closing of the
Offering, to increase the size of the Offering by up to $1.0
million (the "Agent's Option"). Assuming the full
exercise of the Agent's Option, the aggregate gross proceeds of the
Offering will be $5 million.
The net proceeds of the Offering will be used
for working capital, capital expenditures, and for general
corporate purposes.
For its services in connection with the
Offering, the Company will pay to the Agent: (i) a cash commission
equal to 7% of all gross proceeds raised in connection with the
Offering from purchasers not included on the President’s List; (ii)
a cash fee equal to 1.0% of all gross proceeds raised in connection
with the Offering from purchasers identified by the Company (the
“President’s List”); and (iii) broker warrants of
the Company (“Broker Warrants”) equal to 7.0% of
the gross proceeds of the Offering from purchasers not included on
the President’s List and 1.0% of the gross proceeds of the Offering
from purchasers on the President’s List divided by the Conversion
Price, at an exercise price equal to the Conversion Price. The
Broker Warrants will be exercisable to acquire one Class A Share of
the Company for a period of 24 months from the date of issuance of
the Broker Warrants.
The closing of the Offering is subject to the
Company obtaining conditional approval to list the Debentures on
the TSXV in addition to customary closing conditions and the
receipt of all required regulatory approvals, including but not
limited to the approval of the TSXV. The securities issuable
pursuant to this Offering will be subject to a hold period as set
out in National Instrument 45-102 - Resale of Securities. The
Company and the Agent are dealing at arm’s length.
The securities issued in connection with the
Offering mentioned herein have not been and will not be qualified
for sale to the public under applicable Canadian securities laws
and, accordingly, any offer and sale of securities in Canada will
be made on a basis which is exempt from the prospectus and, when
applicable, dealer registration requirements of such securities
laws. Furthermore, none of the securities issued in connection with
the Offering will be registered under the United States Securities
Act of 1933, as amended (the "1933 Act") or of any
other jurisdiction, and none of them may be offered or sold in the
United States or in any other jurisdiction absent registration or
an applicable exemption from the registration requirements of the
1933 Act or of any other jurisdiction. This press release shall not
constitute an offer to sell or a solicitation of an offer to buy
nor shall there be any sale of any of the securities in any
jurisdiction in which such an offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
Forward-Looking Statements
Information provided and statements contained in
this press release that are not purely historical, such as those on
the revenue and the EBITDA, are forward-looking statements within
the meaning of the applicable securities laws. Certain statements
in this press release may constitute forward-looking information
within the meaning of securities laws. Forward-looking information
may relate to LSL Pharma Group’s future outlook and anticipated
events, business, operations, financial performance, financial
condition or results and, in some cases, can be identified by
terminology such as “may”; “will”; “should”; “expect”; “plan”;
“anticipate”; “believe”; “intend”; “estimate”; “predict”;
“potential”; “continue”; “foresee”, “ensure” or other similar
expressions concerning matters that are not historical facts. The
reader should not place undue importance on forward-looking
information and should not rely upon this information as of any
other date. LSL Pharma Group will not update these statements
unless applicable securities laws require LSL Pharma Group to do
so.
ABOUT LSL PHARMA GROUP
INC.
LSL Pharma Group is a Canadian integrated
pharmaceutical company specializing in the development,
manufacturing and distribution of high-quality natural health
products and dietary supplements in solid dosage forms, as well as
high quality sterile ophthalmic pharmaceutical products. For more
information, please visit www.laboratoirelsl.com and
www.sterimedpharma.com.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
CONTACT:François Roberge,
President and Chief Executive Officer Telephone:
514-664-7700Email: Investors@groupelslpharma.com
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