Empower Clinics (CSE: CBDT) has evidently closed a much-needed financing as of last night. The financing consisted of both units of the company as well as convertible debenture units, resulting in the firm raising gross proceeds of $3.0 million.
In terms of the split between debentures and units for the financing, details were not provided by the company on how much of each was sold. What was instead highlighted by the company is insider participation.
In total, 1.75 million units of the company were purchased by certain insiders of the company, including CEO Steven McAuley. More notably, it appears that the firm may have had some difficulty selling the debentures, with one purchaser of $1.2 million worth of debenture units entering an agreement with the firms CEO to acquire the debentures, and then lend them in exchange for the borrowing of 6.0 million unrestricted shares of the company.
The arrangement entered into by the debenture purchaser and McAuley will see the debenture purchaser hold all rights to the shares, except for voting control, and “have all the incidents of ownership.” The shares are to be returned upon the maturity of the debentures. The transaction is being classified as a loan, and not a sale.
Units sold under the offering were sold at a price of $0.20 per each, and consisted of one common share and one warrant, the latter of which is valid for a period of two years and contains an exercise price of $0.30 per share. Debentures meanwhile were priced at $1,000 per each, bear interest at a rate of 6.0% per annum, are unsecured, and contain 5,000 warrants. Debentures are valid for a period of two years and convert at $0.20 per share.
Empower Clinics last traded at $0.365 on the CSE.
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