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Levitee Labs enters into financing agreement for up to $12M for further business expansion

Last updated: 08:59 21 Oct 2021 EDT, First published: 09:30 21 Oct 2021 EDT

Levitee Labs - Levitee Labs Inc. enters into financing agreement for up to $12 million for further business expansion
The secured loan facility was arranged by RiverFort Global Capital and the loan is from RiverFort Global Opportunities

Levitee Labs (CSE:LVT) Inc. has entered into a financing agreement for up to $12 million for further business expansion.

The company said it will utilize the proceeds from the loan to support its prospective future acquisitions of several assets in the clinics, pharmacies, and mental health space as well as for working capital purposes.

The secured loan facility was arranged by RiverFort Global Capital Ltd. (a UK firm) and the loan is from RiverFort Global Opportunities PCC Ltd. 

READ: Levitee Labs announces partnership with Adracare to provide psychedelic digital care for addiction and mental health treatment

"We are grateful for the support we are receiving from RiverFort,” said Levitee Labs CEO Pouya Farmand in a statement.

“We believe this financing is not only reflective of their confidence in the proposed acquisition strategy, but also in the acquisitive growth potential of Levitee Labs once acquisitions are completed. We are committed to continuing to execute our accretive acquisition program, adding another catalyst engine to Levitee’s future growth potential."

Pursuant to the terms of the loan, Levitee Labs said it has agreed to draw down an initial $2.5 million tranche (Tranche 1), with this debt maturing on October 20th, 2023 (Maturity Date), with interest payable by Levitee in an amount equal to 10% per annum on the Tranche 1 advance. Any subsequent advances under the loan, which will be entirely at the discretion of Levitee, will be subject to interest payable by Levitee in an amount equal to 20%, to be applied to the term between the date of the relevant advance date and the maturity date. 

The closing of Tranche 1, and each subsequent tranche of the loan, will be subject to the satisfaction of customary closing conditions involving Levitee and RiverFort, including the final regulatory approval by the Canadian Securities Exchange.

The loan provides for 25% warrant coverage for each advance or drawdown, determined as being 25% of the principal amount of the tranche divided by the company’s share price at the time of the advance. The exercise price of the warrants will be set at 150% of the company’s share price at the time of the advance and the warrants will expire three years after the date they are granted. 

Subject to the satisfaction of the Tranche 1 closing conditions, Levitee will issue 1,378,778 warrants to RiverFort whereby each warrant will entitle RiverFort to purchase one common share for $0.68 each for a term of three years.

As part of the loan agreement, RiverFort will have the option to convert up to 50% of the principal amount of the loan into shares at a fixed conversion price equal to 125% of the market price of the shares at the time of the applicable drawdown. 

Subject to the satisfaction of the Tranche 1 closing conditions, the fixed conversion price for Tranche 1 will be $0.544 per share. In addition, RiverFort may at its option, once every 30 days, request and require that the debt represented by the interest that has been deemed to accrue on the loan be converted into shares pursuant to a private placement price equal to 90% of the last closing price of the shares on the day prior to the notice of such conversion.

Contact the author: patrick@proactiveinvestors.com

Follow him on Twitter @PatrickMGraham

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