RE:RE:RE:debt and raise
11. Convertible Debentures December 2017 Debentures In December 2017, the Company issued senior unsecured convertible debentures in the aggregate principal amount of $30,000,000 (the December 2017 Debentures), bearing interest at the rate of 7% per annum and maturing on December 21, 2020. The December 2017 Debentures and accrued interest can be converted at the option of the holder into common shares of the Company at a conversion price of $1.50 per share, subject to adjustment as provided in the December 2017 Debentures. The Company initially recognized $22,056,922 as the fair value of the December 2017 Debentures, and $6,075,065 was initially recognized in contributed surplus with respect to the value of the conversion feature. During the year ended December 31, 2018, $26,500,000 of the principal amount was converted into 17,666,666 common shares. As at June 30, 2020, an aggregate principal amount of $3,500,000 was outstanding. February 2018 Debentures In February 2018, the Company issued unsecured convertible debentures in the aggregate principal amount of $34,500,000 (the February 2018 Debentures) pursuant to a bought deal financing. The February 2018 Debentures mature on February 28, 2021 and the outstanding principal of the debentures bears interest at the rate of 6.0% per annum, payable semi-annually in arrears on June 30 and December 31 in each year, commencing on June 30, 2018. Each debenture is convertible into common shares at the option of the holder at any time prior to the close of business on the earlier of the last business day immediately preceding the maturity date at a conversion price of $4.00 per share, subject to adjustment in certain circumstances. The Company initially recognized $23,661,109 as the fair value of the February 2018 Debentures, and $9,393,195 was initially recognized in contributed surplus with respect to the value of the conversion feature. As at June 30, 2020, an aggregate principal amount of $23,620,000 was outstanding. Effective April 2, 2020, the Company repurchased a portion of the February 2018 Debentures in the aggregate principal amount of $10,000,000 for a price of $9,300,000 (plus accrued and unpaid interest thereon), representing a 7.0% discount to the face value, pursuant to a private agreement. Effective May 8, 2020, the Company repurchased an additional portion of the February 2018 Debentures in the aggregate principal amount of $880,000 for a price of $818,400 (plus accrued and unpaid interest thereon up to but excluding April 30, 2020), representing a 7.0% discount to the face value, pursuant to the terms of a first supplement to the debenture indenture dated April 24, 2020 between the Company and TSX Trust Company, following which, February 2018 Debentures in the aggregate principal amount of $23,620,000 remain outstanding. With the repurchase of the February 2018 Debentures, the Company reported an adjustment of $329,341 to the corresponding equity component based on a revised fair value (debt interest rate of 19%) and amount paid to settle the February 2018 Debentures.