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Avicanna’s closing of non brokered private placement of debenture units

(Globe Newswire) Toronto — Avicanna Inc., an innovative, commercial stage, and international biopharmaceutical company focused on the development advancement, and commercialization of evidence-based, cannabinoid-based products, is pleased to announce that it has closed a non-brokered private placement of 1,455,000 debenture units of the company at a price of $1 per unit, for aggregate gross proceeds of approximately $1,455,000.

Each unit consists of an aggregate of $1 principal amount of secured subordinated debentures and 1 common share purchase warrant.

The debentures will mature one year following the closing of the offering and are not convertible into equity securities of the company. The debentures will bear interest at a rate of 18 per cent per annum until the maturity date. The debentures are subject to a 2 per cent administration fee. The company may prepay the debentures at any time prior to the maturity date subject to a one-time prepayment fee of 1.5 per cent of the principal amount.

The debentures will rank pari passu in right of payment of principal with all other debentures issued under the offering and will be subordinated to the then currently outstanding convertible debentures issued on January 28, 2022, as amended on January 28, 2023.

Each warrant is exercisable into one common share in the capital of the company at a price of $0.35 per share for a period of three years from the closing of the offering.

The company intends to use the proceeds from the offering for the ongoing development of the company’s business model and for general working capital purposes, general and administrative expenses, repayment of debt, expenditures related to production and manufacturing, and research and clinical development. All securities issued under the offering, including securities issuable on exercise thereof, are subject to a hold period expiring four months and one day from the date hereof.

The offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX.

The company has also entered into amending agreements with certain holders of senior debentures bearing an outstanding principal amount of $562,000. Pursuant to the amending agreements, the term of the senior debentures has been extended to October 28, 2023, the company will pay to the holders of senior debentures a one-time extension fee equal to 5o per cent of the principal amount of senior debentures outstanding, and the senior debentures will bear interest at a rate of 20 per cent per annum from and after July 28, 2023.

If the debentures are not repaid by the maturity date or if there is a default under the senior debentures, there will be a one-time penalty fee of 5 per cent of the outstanding principal amount and the debentures will bear interest at a rate of 22 per cent per annum.