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Tetra Bio-Pharma Inc. , a leader in cannabinoid-based drug discovery and development, announced today that it has entered into a subscription agreement (the “Subscription Agreement“) with Global Corporate Finance Opportunities 16 (the “Investor“), an investment vehicle advised by Alpha Blue Ocean Inc. (“ABO“), whereby Tetra has agreed to issue to the Investor (i) senior unsecured convertible debentures (“Debentures“) in the aggregate principal amount of up to $6,000,000, and (ii) warrants (“Warrants“) to purchase common shares (“Common Shares“) in the capital of the Company (collectively, the “Offering“).
Created in 2017, ABO is a pioneer in alternative financings, providing innovative financing solutions for companies across the globe. In less than 5 years, ABO, founded by Pierre Vannineuse, has executed more than €1.5 billion in financial commitments and more than 90 transactions, with a high focus on the life science sector.
“The Company is pleased to announce our financing agreement with Alpha Blue Ocean,” says Guy Chamberland, CEO of Tetra. “This agreement gives us capital to fund our operations and further pursue the development of our drug candidates”.
“We are excited to partner with Tetra, a leader in cannabinoid-based drug discovery and development,” says Amine Nedjai, CEO of ABO. “This financing agreement, ABO’s first on the TSX, will provide funds for the Tetra team to accelerate its drug development pipeline.”
The Investor has agreed to subscribe for up to $6,000,000 aggregate principal amount of Debentures and accompanying Warrants. The Debentures will be convertible into, and the Warrants will be exercisable for, Common Shares, at prices to be determined at each closing of the 15 separate tranches (each, a “Tranche“) pursuant to which the Debentures and accompanying Warrants are issuable.
Upon closing of each Tranche, the Company will issue the Debentures in the principal amount of $400,000.
The subscription price for each Debenture is 100% of its face value and the Debentures will not bear interest. Each Debenture matures 12 months following the applicable issue date (the “Maturity Date“).
The Debentures will be automatically converted into such number of Common Shares as is equal to the aggregate principal amount of the Debentures being converted, divided by the applicable conversion price immediately following the earlier of: (i) five business days after delivery by the holder of a conversion notice, or (ii) the Maturity Date.
In the event of a default under the Debentures, the holder has the right to accelerate the Maturity Date and immediately convert all or any of its Debentures into Common Shares or to require the Company to immediately redeem in cash all or any of its Debentures. The Debentures may also, at Tetra’s option, be redeemed in cash prior to the Maturity Date subject to a 5% premium.
Each Tranche will include three-year Warrants to acquire Common Shares of the Company at an exercise price equal to 130% of the volume weighted average price of the Common Shares on the Toronto Stock Exchange (the “Exchange“) observed over the 5 trading days immediately preceding the date of issuance of the Warrants.
The closing of the first Tranche for $400,000 principal amount of Debentures (the “First Closing“) is anticipated to close shortly and the closing of additional Tranches, if completed, will take place during the 36-month commitment period. Details of the conversion price for the Debentures, the number of Warrants and exercise price of the Warrants issued pursuant to the First Closing will be disclosed in a subsequent press release.
The Company will pay ABO commitment and service fees in the amount of $40,000 each in connection with the closing of each Tranche, representing $600,000 in fees in the aggregate assuming the completion of all 15 Tranches, or 10% of the full aggregate principal amount of the Debentures, and will reimburse ABO for its expenses in connection with the Offering.
The Company intends to use the net proceeds of the Offering to finance the manufacturing costs of its QIXLEEF drug candidate, to repay indebtedness and for working capital. The Offering and listing of the Common Shares issuable on the conversion of the Debentures and on the exercise of the Warrants have been conditionally approved by the Exchange. The Offering remains subject to the receipt of final approval of the Exchange.
The securities described herein have not been, and will not be, registered under the U.S. Securities Act or any state securities laws, and accordingly, may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons (as defined in Regulation S under the U.S. Securities Act) except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release will not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor will there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
The Toronto Stock Exchange has not approved the contents of this press release. Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.
Tetra Bio-Pharma is a leader in cannabinoid-derived drug discovery and development with a FDA and a Health Canada cleared clinical program aimed at bringing novel prescription drugs and treatments to patients and their healthcare providers. Tetra’s evidence-based scientific approach has enabled them to develop a pipeline of cannabinoid-based drug products for a range of medical conditions, including pain, inflammation, and oncology. With patients at the core of what they do, Tetra is focused on providing rigorous scientific validation and safety data required for inclusion into the existing biopharma industry by regulators, physicians, and insurance companies.
For more information visit: www.tetrabiopharma.com
