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EXMceuticals raises over $1 million in new financing, strengthens balance sheet with debt to equity conversion

The Vancouver-based firm closed a C$1,036,000 oversubscribed private placement consisting of nearly 5.2 million units priced at $0.20

EXMceuticals -
EXMceuticals also refinanced a set of loan agreements with CEO Jonathan Summers

EXMceuticals Inc (CSE:EXM) announced a series of moves that strengthen the wellness company’s balance sheet amid ongoing research and development of medical applications for cannabinoids and terpenes.

On Wednesday, the Vancouver-based firm closed a C$1,036,000 oversubscribed private placement consisting of nearly 5.2 million units priced at $0.20, with each unit consisting of one share and one warrant exercisable at $0.30 for an 18-month period.

The firm also announced it had agreed to refinance a $600,000 June 2019 loan from its CEO Jonathan Summers, which was payable by December 7, 2019, into a new agreement for $664,500 payable by January 5, 2021.

READ: EXMceuticals strikes THC distillate supply agreement for its upcoming Portuguese refinery

The 2020 loan will include accrued and unpaid expenses of Summers amounting to $25,671, and accrued and unpaid interest on the July loan facility agreement in the amount of $164,000 as at July 1, 2020.  The total principal amount of the 2020 loan is $854,171. The new loan will be for a term of six months, and bear interest at 10% per year. 

In connection with the 2020 loan, the company agreed to issue 427,085 bonus special warrants, with each special warrant being convertible into an EXMceutical share for no additional consideration, subject to the principal amount of the loan being applied to a subsequent equity financing. 

EXMceuticals previously entered into a separate loan facility agreement in July 2019 with Summers, for the principal amount of $1.4 million, which is due and payable on January 5, 2021 and bears an interest rate of 12% per annum until the July loan maturity date. Summers received 207,407 special warrants in connection with the July loan. 

As part of the terms of the July loan, Summers may receive share purchase warrants exercisable at $1.35 per share on the maturity date, with with the number of warrants being based on coverage ranging from 10% and 50% of the principal amount using $1.35 per share, and the percentage depending on the fair market value of the shares of the company as of the maturity date. 

In connection with the agreement of Summers to include $164,000 of interest due under the July loan as part of the 2020 loan, the company agreed to amend the warrant coverage to 700,000 bonus warrants exercisable at a price of $0.40 per share for a period of five years until July 4, 2024, according to a release.

Share issuance

Separately, EMXceuticals issued 251,096 shares, of which 220,859 shares were issued to Luminous Capital Inc for financial services provided, and 30,237 to multiple parties to correct errors on a prior private placement. 

The firm also announced that under to the terms of an employment agreement with Summers in connection with his CEO role, it agreed to grant incentive stock options to purchase up to 5 million shares priced at $0.40 per share for a period of five years.

Contact Angela at angela@proactiveinvestors.com

Follow her on Twitter @AHarmantas

Quick facts: EXMceuticals

Price: 0.19 CAD

CSE:EXM
Market: CSE
Market Cap: $7.51 m
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