LSL Pharma Group Inc. (TSXV: LSL) – (the “
Company”
or “
LSL Pharma Group”), a Canadian integrated
pharmaceutical company, is pleased to announce that the Company has
closed the second tranche of its brokered private placement (the
“
Offering”) through the issuance of 99,500
unsecured convertible debentures (each a
“
Debenture”) at a price of $10 per Debenture for
gross proceeds of $995,000.
Together with the first tranche closing proceeds
of $2,293,000 announced on November 1, 2023, LSL Pharma Group has
now raised total gross proceeds of $3,288,000 under the Offering
out of a maximum of $5,000,000 (assuming the full exercise of the
agent's option to increase the size of the Offering by up to $1.0
million). The net proceeds of the Offering will be used for working
capital, capital expenditures, and for general corporate
purposes.
The Offering was led by iA Capital Markets as
sole agent and sole bookrunner (the “Agent”). In
connection with the second tranche of the Offering, the Company
paid to the Agent a cash commission of $62,150 and issued 88,785
broker warrants (the “Broker Warrants”). The
Broker Warrants are exercisable to acquire one Class A Share of the
Company at a price of $0.70 for a period of 24 months from the date
of issuance. The Company and the Agent are dealing at arm’s
length.
All securities issued pursuant to the second
tranche of the Offering are subject to the applicable statutory
hold period of four months and one day from December 8, 2023. The
Offering is subject to the final approval of the TSX Venture
Exchange (the “TSXV”).
As announced in its press release dated November
1, 2023, the Company has received conditional approval to list the
Debentures on the TSXV after the expiry of each applicable hold
period. The Debentures are expected to trade under the symbol
LSL.DB. The listing of the Debentures is subject to final approval
by the TSXV at the time of listing and the Company fulfilling the
requirements as outlined in Policy 2.8 of the TSXV’s policies.
Each Debenture will, at the option of the
holder, be convertible in its entirety into Class A shares of the
capital stock of the Company (the “Class A
Shares”) at any time prior to the close of business on the
earlier of: (i) the last business day immediately preceding the
Maturity Date, and (ii) the date fixed for redemption, at a
conversion price of $0.70 per Class A Share (the
“Conversion Price”), subject to adjustment in
certain events.
The Debentures will, subject to any prior
conversion or redemption, mature on October 31st, 2028
(“Maturity Date”) and are payable on the Maturity
Date in cash. The outstanding principal amount will bear interest
at the rate of 11.00% (the “Base Rate”) per year,
payable in cash semi-annually on the last day of April and October
of each year with the first interest payment to be paid on October
31, 2024 (“First Interest Payment Date”). Interest
will accrue from November 1, 2023 (the “Initial Closing
Date”) up to the First Interest Payment Date at the Base
Rate, compounding semi-annually on the last day of April and
October of each year (the “Interest Period”).
The annual interest rate will be recalculated
twice every year on April 30th and October 31st of each year,
starting April 30th, 2025 (each an “Interest Rate Review
Date”) until the Maturity Date, and shall be equal to the
Base Rate less 100 basis points (1.0%) for each Business Objective
(as defined below) achieved (the “Amended Base
Rate”). Upon achievement of a Business Objective, the
Amended Base Rate will be effective as of the following interest
payment date of the Debentures (after April 30, 2025) until the
next interest payment date thereafter if Business Objective 3 (as
defined below) is achieved or until the Maturity Date if a Business
Objective 1 or 2 (as defined below) is achieved.
Business Objectives (each a “Business
Objective”):
- the obtention by the Company of FDA approval for its Steri-Med
plant (one-time business objective);
- the completion by the Company of the acquisition of a business
which: 1) complements the Company’s existing product offering
and/or creates synergies with the Company’s existing business
operations and 2) generated a minimum of CAD$5.0 million in revenue
during the last twelve-month (12) period preceding the acquisition
(one-time business objective); or
- the Company generates a minimum of CAD$30 million of revenue
with a 20% EBITDA margin during the fiscal period preceding the
Interest Rate Review Date (annual business objective). With respect
to (3), the Company’s financial performance and revenue shall be
calculated based on its audited financial statements and the
Company’s EBITDA margin shall be calculated as EBITDA (not adjusted
EBITDA), as calculated in its audited financial statements, divided
by its revenue (the “Business Objective 3”, and
the “Business Objective 1 or 2” means the Business
Objective other than Business Objective 3).
If, at any time following the date that is 24 months from the
Initial Closing Date, for the preceding 20 consecutive trading days
(i) the daily volume weighted average trading price of the Class A
Shares on the TSXV is greater than 175% of the Conversion Price;
and (ii) the average daily volume of the Class A Shares traded on
the TSXV is no less than the number obtained when dividing the
number of shares issued upon conversion of the total amount of
Debentures outstanding by twenty (20), the Company will have the
option to convert all of the principal amount outstanding of the
Debentures at the Conversion Price with at least 30 days’ prior
written notice.
Multilateral Instrument 61-101
Under the second tranche of the Offering,
François Roberge, President and Chief Executive Officer of the
Company, subscribed directly for an aggregate principal amount of
$85,000 of Debentures which are convertible for up to a potential
133,571 Class A Shares, in the case of a redemption and conversion
of the Debentures at 110% of the principal amount prior to the
fourth anniversary of the Initial Closing Date. Its current
shareholding on an undiluted basis remains unchanged at 27.61%
(increases from 30.82% to 30.93% on a partly diluted basis,
assuming the aforementioned conversion and the conversion of his
other convertible securities). Such transaction is a “related party
transaction” as defined under Multilateral Instrument (“MI
61-101”). The transaction is exempt from the formal
valuation and minority shareholder approval requirements of MI
61-101 as the Company is listed on the TSX Venture Exchange and the
fair market value of any security issued to, or the consideration
paid, does not exceed 25% of the Company's market capitalization.
The Company did not file a material change report pertaining to the
insider’s interest more than 21 days before the closing of the
Offering, as the details of this insider’s participation had not
been confirmed at that time. The board members of the Company
reviewed the state of the financial market and unanimously
determined that the terms and conditions of the Offering, including
the subscription of the related party, were fair and equitable and
represented the best strategic financing option available. In
addition, neither the Company nor the said related party has
knowledge of any material information concerning the Company or its
securities that has not been generally disclosed.
Disclaimers
The securities issued in connection with the
Offering mentioned herein have not been and will not be qualified
for sale to the public under applicable Canadian securities laws
and, accordingly, any offer and sale of securities in Canada will
be made on a basis which is exempt from the prospectus and, when
applicable, dealer registration requirements of such securities
laws. Furthermore, none of the securities issued in connection with
the Offering will be registered under the United States Securities
Act of 1933, as amended (the "1933 Act") or of any
other jurisdiction, and none of them may be offered or sold in the
United States or in any other jurisdiction absent registration or
an applicable exemption from the registration requirements of the
1933 Act or of any other jurisdiction. This press release shall not
constitute an offer to sell or a solicitation of an offer to buy
nor shall there be any sale of any of the securities in any
jurisdiction in which such an offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
Forward-Looking Statements
Information provided and statements contained in
this press release that are not purely historical, such as those on
the revenue and the EBITDA, are forward-looking statements within
the meaning of the applicable securities laws. Certain statements
in this press release may constitute forward-looking information
within the meaning of securities laws. Forward-looking information
may relate to LSL Pharma Group’s future outlook and anticipated
events, business, operations, financial performance, financial
condition or results and, in some cases, can be identified by
terminology such as “may”; “will”; “should”; “expect”; “plan”;
“anticipate”; “believe”; “intend”; “estimate”; “predict”;
“potential”; “continue”; “foresee”, “ensure” or other similar
expressions concerning matters that are not historical facts. The
reader should not place undue importance on forward-looking
information and should not rely upon this information as of any
other date. LSL Pharma Group will not update these statements
unless applicable securities laws require LSL Pharma Group to do
so.
ABOUT LSL PHARMA GROUP
INC.
LSL Pharma Group is a Canadian integrated
pharmaceutical company specializing in the development,
manufacturing and distribution of high-quality natural health
products and dietary supplements in solid dosage forms, as well as
high quality sterile ophthalmic pharmaceutical products. For more
information, please visit www.groupelslpharma.com.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
CONTACT:François Roberge,
President and Chief Executive Officer Telephone: 514-664-7700Email:
Investors@groupelslpharma.com
LSL Pharma (TSXV:LSL)
Historical Stock Chart
From Aug 2024 to Sep 2024
LSL Pharma (TSXV:LSL)
Historical Stock Chart
From Sep 2023 to Sep 2024