Valeo Pharma (CSE: VPH) this morning announced that it will be conducting a private placement. The placement will look to sell up to 4,000 unsecured non-convertible debenture units for gross proceeds of $4.0 million.
Under the terms of the financing, the company will look to sell each debenture unit at a price of $1,000 per each. Each unit is to contain one unsecured non-convertible debentures, as well as 200 Class A share purchase warrants. Each warrant is valid for a period of two years from the date of issuance at a price of $1.60 per warrant.
The debentures meanwhile are to have a maturity of nine months “at the latest,” indicating a possible current cash crunch for the company. Debentures are to bear interest at a rate of 8% per annum, payable in cash. Insiders are reportedly participating in the financing to the tune of $2.6 million.
Net proceeds from the offering are to be used for working capital and general corporate purposes. The company alluded to the funds more specifically being utilized for the launch of three new products, which are said to be drivers for continued growth over the coming years.
The financing is currently slated to close April 23, 2021.
Valeo Pharma last traded at $1.08 on the CSE.
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