Elixxer Ltd. Announces $4 Million Secured Loan and Proposed Private Placement
MONTRAL, Aug. 28, 2020 (GLOBE NEWSWIRE) -- Elixxer Ltd. (TSX-V: ELXR) (OTC-QB: ELIXF) (FRA: 2LQA) (“Elixxer” or the “Company”) announces that it has entered into a loan agreement with AIP Convertible Private Debt Fund L.P. (the “Lender”) for a secured loan in the principal amount of CAD$4,000,000 (the “Loan”). The Loan will have a term of 24 months and will bear interest at the rate of 17% per annum. The Loan will be secured by a general security agreement on all of the present and after-acquired property of the Company.
On closing, the Company will pay to the Lender (i) a facility fee of CAD$200,000; (ii) a closing fee of CAD$250,000; and (ii) a monitoring fee of CAD$75,000, in respect of the Loan. Upon approval of the TSX Venture Exchange (the “TSXV”), the Lender shall also receive a bonus of 46,333,333 common shares (the “Bonus Shares”) of the Company at a deemed issue price of CAD$0.015 per share, representing 20% of the net amount of the Loan.
The Company intends to use the proceeds of the Loan for working capital purposes and to pursue future investments.
The Corporation also announces a proposed non-brokered private placement with a strategic investor in the amount of US$400,000 (USD/CAD exchange rate 1.307 for CAD $522,800) for 34,853,333 units of the Company (the “Units”) at a price of CAD$0.015 per Unit (the “Private Placement”). Each Unit will consist of one common share of the Company and one common share purchase warrant. Each warrant will be exercisable for a period of 60 months from the date of issuance at an exercise price of CAD$0.05 each.
No commission or finder’s fee will be paid in connection with the Private Placement. The Units will be issued pursuant to an exemption from the prospectus requirements of applicable securities legislation, and all securities will be subject to a hold period of four months and one day from the date of issuance.
The proceeds of the Private Placement will be used by the Company for general working capital purposes. Closing of the Private Placement is subject to approval of the TSXV and to customary closing conditions.
Mazen Haddad, Elixxer CEO, stated, “We are very pleased to be working with AIP. This financing is intended to allow Elixxer to execute on our acquisition strategy which will target growth companies with revenues and cashflows.”