Tetra Bio-Pharma Inc. (“Tetra” or the “Company”) (TSX:TBP)(OTCQB:TBPMF), a leader in cannabinoid-derived drug discovery and development, today announces that it has completed the divestiture of Lumiera Health Innovation Inc. (“Lumiera”), its subsidiary, to Mondias Natural Products Inc. (TSXV: NHP) (“Mondias “) as previously announced.
Transaction
Pursuant to the terms of an amended Share Exchange Agreement dated October 23, 2020 (the “Amended SEA”), Mondias has acquired Lumiera for a purchase price of CAN$1.3 million. The purchase price was satisfied by the issuance of 16,250,000 Mondias common shares using a stock price of CAN$0.08 per share, being the closing price of the Common Shares on the TSX Venture Exchange (“TSXV”) on the day prior to the initial announcement of the Transaction, with 14,625,000 Mondias common shares received by Tetra and 1,625,000 received by minority shareholders. The total amount of shares represented an increase of 250,000 common shares from the original amount, which was intended to compensate Tetra and the minority shareholders for the delays in closing the transaction and additional costs.
Debt Facility
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Mondias, Tetra and a third party private lender (“Private Lender”) have agreed to amend the CAN$2 million convertible debt facility entered into between Lumiera and the Private Lender on August 27, 2020 into a CAN$3 million non-convertible debt facility (the “Amended Note”) of which CAD$2 million has been drawn. The Amended Note will bear interest at a rate equal to 15% per year and is guaranteed by a first-ranking hypothec granted over the universality of assets of Mondias and Lumiera.
As additional guarantees, Tetra also pledged the 14,625,000 Mondias Common Shares Tetra received as consideration for the transaction (“Pledge Shares”). If the Private Lender calls on Tetra to repay the Amended Note pursuant to its guarantee, Tetra is entitled to either pay in cash or elect to issue its own Common Shares in lieu of a cash payment, subject to the TSX’s approval. Should the TSX not approve this issuance of shares, Tetra will be obligated to repay the residual amount in cash. As part of the negotiations, Tetra obtained a waiver from the Private Lender of certain defaults under the initial note purchase agreement, subject to Tetra meeting certain conditions.
The Amended Note will come to maturity on February 27, 2022.
Source: BioSpace