Mr. Dom Kizek reports
YANGAROO ANNOUNCES UNSECURED CONVERTIBLE DEBENTURE OFFERING
Yangaroo Inc. has arranged a non-brokered private placement offering of unsecured, convertible debentures for gross proceeds of $500,000.
The company is undertaking the offering to satisfy a condition of the National Bank of Canada (NBC) that the company complete a financing for gross proceeds of $500,000 in order for NBC to provide an amendment to a loan agreement related to all credit facilities of the company held with NBC. As previously disclosed, the company is currently in breach of its financial covenants pursuant to the loan agreement. Following the completion of the offering, it is anticipated that NBC will enter into the amendment agreement with the company such that the company will be in good standing pursuant to the terms of the loan agreement. Subscribers to the offering will be required to execute a subordination and postponement agreement in favour of NBC with respect to the debentures until any and all amounts owing by Yangaroo to NBC are repaid and the subordination and postponement agreement is terminated by NBC. During the term of the subordination and postponement agreement, no payments to the holders of the debentures in the form of cash will be permitted except for payments of interest (as defined herein), unless the company is in default of the loan agreement, and no payments by way of issuance of common shares as contemplated herein will be permitted if the company is in default of the loan agreement (the NBC conversion restriction).
The debentures will mature on Nov. 30, 2027, and each $1,000 debenture will bear interest at a simple rate of the NBC prime rate plus 8.00 per cent per annum (subject to increase to prime plus 10.00 per cent per annum in the event of certain defaults). The holders of the debentures will be entitled to convert the principal amount of the debentures at any time on or prior to the maturity date into common shares of the company at a conversion price of 10 cents, subject to adjustment related to corporate actions and subject to the NBC conversion restriction. In the event that the debentures are not converted or repaid by the maturity date as a result of the NBC conversion restriction, subject to the prior approval of the TSX Venture Exchange, the debentures will become non-convertible.
Interest will be payable within 30 days of the end of each semi-annual period ended Nov. 30 and May 31 throughout the term of the debentures in cash or common shares of the company, at the discretion of the company, and subject in each instance to the approval of theexchange, and subject to the NBC conversion restriction. If paid by way of share issuance and subject to exchange approval, the price per share will be the discounted market price as determined at the time of settlement.
The company will have an optional right to redeem the principal amount owing under the debentures, on a pro rata basis, in whole or in part, at 100 per cent of the value of the principal owing at such time. The company will also have a mandatory obligation to redeem the principal amount owing under the debentures in certain circumstances, including in the event of certain asset sales (requiring a redemption in whole or in part at par) or in the event of a change of control (requiring a redemption in full at 101 per cent of the principal owing at such time), however subject to the NBC conversion restriction in each instance. In the event of an optional or mandatory redemption, interest will be payable within 30 days of the applicable redemption date, in cash or common shares as described herein, subject in each instance to the prior approval of the exchange and to the NBC conversion restriction.
The company intends to close the offering on or about Dec. 9, 2022. The net proceeds of the offering are expected to be used to repay a portion of the outstanding balance owing on the company's revolving line of credit held with NBC, which will in turn be used for general working capital purposes. The offering, including each term of the debentures, is subject to the approval of the exchange.
Although the debentures are non-transferable, in the event that the debentures are converted prior to the expiration of a statutory hold period of four months and a day from the date of closing, the underlying common shares will be subject to the remainder of the hold period.
The company anticipates one or more directors or officers of the company to participate in the offering. Such participation of insiders will be considered related party transactions subject to and in accordance with Multilateral Instrument 61-101. The company intends to rely on exemptions from the formal valuation and minority shareholder approval requirements in respect of any such insider participation.
About Yangaroo Inc.
Yangaroo is a software leader in media asset workflow and distribution solutions for advertising, music and awards industries. Yangaroo's patented digital media distribution system is a leading secure business to business cloud-based solution that incorporates production services, traffic, clearance, delivery, analytics and secure API (application programming interface) integration for the industries various video and audio work-flow challenges.
We seek Safe Harbor.
© 2023 Canjex Publishing Ltd. All rights reserved.