BevCanna Enterprises Inc (CSE:BEV) (OTCMKTS:BVNNF), a cannabis-infused beverages maker, said Tuesday that it has closed a non-brokered private placement raising $300,000, while also winding up the first tranche of a non-brokered financing of secured convertible debentures for gross proceeds of $630,000.
In a statement, BevCanna CFO John Campbell said the company was “very pleased” with the confidence that investors had shown in the company, especially during these “uncertain” economic times.
"We are also very appreciative of the ongoing support and signaled confidence from our vendors and partners who have directly participated in securing our additional financing in a cost-effective manner, through the direct use of debt for equity settlements,” he added.
“Our corporate overhead structure is lean, and our capital expenditure needs are moderate. These two cornerstones of our business philosophy will help to ensure our future success," Campbell concluded.
Under the equity financing, BevCanna sold 705,879 shares at a price of $0.425 per share for gross proceeds of $300,000. The company said it intends to use the money as working capital.
The debentures also being issued will mature after 36 months and bear interest at a rate of 8% per annum, accrued and paid semi-annually in arrears in equal instalments at the end of each calendar quarter, commencing on the date of issuance of the debentures, the company said.
The principal amount of the debentures may be convertible into shares, in whole or in part, at any time following the issue date, but on or before the maturity date at a conversion price of $0.75 per conversion share.
In addition, the debentures have a mandatory conversion feature such that the company may elect to automatically convert the principal amount of the debentures into conversion shares in the event the volume-weighted average closing of the shares on the Canadian Securities Exchange is at least $1 per share for ten consecutive trading days. All accrued and unpaid interest will be paid in cash.
Meanwhile, BevCanna also said it has settled debt in the amount of $758,500 owed by the company to creditors in exchange for the issue of 1,896,250 debt settlement shares at a price of $0.40 each. Included in the total debt settlement was $60,000 owed to CFO John Campbell, and $250,000 owed to Naturo Group Investments Inc, a company controlled by Marcello Leone, the CEO and director of the company.
The securities issued in the equity and debenture financing, and debt settlement are subject to resale restrictions imposed by securities regulations, including a statutory hold period expiring four months and one day from the date of closing of the transactions, noted the company.
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