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Icanic Brands Company Inc. (OTCQB:ICNAF) (CSE:ICAN) has completed its recapitalization transaction pursuant to the terms of a restructuring support agreement, dated June 8, 2022 between the company, and certain holders of the 9% secured convertible debentures issued pursuant to a convertible debenture indenture dated June 6, 2019 between LEEF Holdings, Inc. and Odyssey Trust Company, as trustee and collateral agent, as amended by the first supplemental indenture between the company, LEEF and Odyssey.
The recapitalization transaction closed pursuant to the terms of the plan of arrangement, which was approved by certain holders of the 2019 debentures of the company at a special meeting of secured debenture holders on August 8, 2022, and which received final approval from the Supreme Court of British Columbia on August 15, 2022.
Recapitalization
As of the closing of the recapitalization transaction on September 9, 2022, each secured debenture holder received:
25% of the principal and interest outstanding on the 2019 Debentures in cash (amounting to approximately $3.73 million)
A new secured debenture in the principal amount equal to 75% of the outstanding principal and interest (approximately $11.18 million) issued pursuant to a debenture indenture entered into as of the effective date between Icanic and Odyssey as trustee and collateral agent.
The new secured debentures bear interest at 11% per annum and mature 24 months following the effective date. Interest on the new secured debentures is payable in cash on the new maturity date.
The new secured debentures are convertible into units of Icanic at a conversion price of CA$0.10 per unit , with each unit comprised of one common share of the company and a common share purchase warrant exercisable at CA$0.15 per common share for a period of 24 months from the date of conversion. The warrants are governed by a warrant indenture entered into as of the effective date between Icanic and Odyssey, as warrant agent.
Private Placement
The company closed its private placement pursuant to which certain insiders and strategic investors of Icanic were issued new secured debentures in the aggregate principal amount of CA$1.3 million ($1 million). The additional secured debentures have been issued pursuant to a debenture indenture entered into as of September 8, 2022 between Icanic and Odyssey as trustee and collateral agent and have been issued on the same terms as the new secured debentures.
The additional secured debentures bear interest at a rate of 11% per annum and mature twenty four months from the date of issue. The interest accrued under the additional secured debentures shall be payable in cash upon maturity. The proceeds from the issuance of the additional secured debentures will be used by the company for working capital and general corporate purposes.
The additional secured debentures are convertible into units of Icanic at a conversion price of CA$0.10 per unit, with each unit comprised of one common share and one warrant. The warrants are governed by a warrant indenture entered into as of September 8, 2022 between Icanic and Odyssey, as warrant agent.
Photo by Giorgio Trovato on Unsplash
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