25 Jan 2022capital raising announcement● NeutralMajor
On January 21, 2022 the company closed a first $5.0 million tranche of a planned $7.0 million private placement with L1 Capital Global Opportunities Master Fund, issuing a 6% original-issue-discount senior convertible note (principal up to $7.0 million, 18-month maturity, $6.00 conversion price) and a five-year warrant for 383,620 shares at $6.00. Proceeds before expenses on the first tranche are about $4.7 million. A second $2.0 million tranche (about $1.88 million after discount, plus a warrant for 153,450 shares) depends on an SEC registration becoming effective and on conditions, and could be reduced or not funded. For shareholders, the note can be repaid in cash or in shares from 120 days after closing, with a $1.20 floor price on share-based payments, and its conversion price carries full-ratchet anti-dilution protection, so repayment in shares could dilute existing holders (inference).