April 29, 2022 /CNW/ – Cansortium Inc. (CSE: TIUM.U) (OTCQX: CNTMF) (“Cansortium” or the “Company”), a vertically-integrated cannabis company operating under the Fluent™ brand, today announced the closing of a non-brokered private placement (the “Private Placement”) that includes a 10.0% unsecured convertible debenture in the principal amount of US$3.5 million (“the Debenture”), as well as 3,076,923 pre-funded common share purchase warrants (each a “Pre-Funded Warrant”) at a price of US$0.39 per Pre-Funded Warrant, for aggregate gross proceeds of US$4.7 million.
The Debenture will come due in 2032 and is convertible into common shares of the Company at a conversion price of US$0.79 per common share. Each Pre-Funded Warrant shall entitle the holder to purchase one common share at an additional exercise price of US$0.40 per common share (for a total common share issue price equal to US$0.79) for a period of 12 months from the date of issuance. The conversion price for both the Debenture and Pre-Funded Warrant reflects a premium of approximately 295% over the closing price of the Company’s common shares on the Canadian Securities Exchange on April 28, 2022.
The Company may repay the Debenture, in whole or in part, at any time.
The net proceeds of the Private Placement will be used by the Company to reduce the principal amount outstanding under its previously announced April 2021 Credit Agreement and for general working capital purposes. In addition, the Company will designate $3.25 million of the gross proceeds of the Private Placement as an equity cure under the April 2021 Credit Agreement for the quarter ended March 31, 2022. For purposes of the April 2021 Credit Agreement, the equity cure proceeds will be deemed to have been received during the quarter ended March 31, 2022 for purposes of EBITDA used in the calculation of the Consolidated Interest Coverage Ratio, which is required to be 2.50:1.00.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The securities being offered have not been, nor will they be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws. Accordingly, these securities may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Cansortium in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Cansortium is a vertically-integrated cannabis company with licenses and operations in Florida, Pennsylvania, Michigan and Texas. The Company operates under the Fluent™ brand and is dedicated to being one of the highest quality cannabis companies for the communities it serves. This is driven by Cansortium’s unrelenting commitment to operational excellence in cultivation, production, distribution and retail. The Company is headquartered in Miami, Florida.
Cansortium Inc.’s common shares trade on the CSE under the symbol “TIUM.U” and on the OTCQX Best Market under the symbol “CNTMF”. For more information about the Company, please visit www.getfluent.com.