As previously announced, the Bridge Financing is comprised of two tranches, with the first tranche of US$6.0 million funded on August 19, 2024. The second tranche of the Bridge Financing, in an amount of up to US$3.0 million, was conditioned on the absence of a default under the Bridge Loans and the receipt by the Company of a commitment from a strategic investor of its intent to invest a minimum amount of US$5.0 million in a subsequent equity capital raise.
In connection with the Bridge Financing, FS converted US$1.5 million of its existing convertible notes into common shares in the capital of the Company at an above-market conversion price of US$2.00 per share, reducing the convertible note balance by US$1.5 million. The Company also received additional Bridge Loans in an aggregate amount of approximately US$334,000 from certain members of management and the board of directors (collectively, the "Additional Bridge Lenders" and, together with the Initial Bridge Lenders, the "Bridge Lenders") in accordance with the terms of the Bridge Financing.
The Bridge Financing constitutes a "related-party transaction" within the meaning of Regulation 61-101, Protections of Minority Security Holders in Special Transactions ("Regulation 61-101") as FS, IQ and the Additional Bridge Lenders are all "insiders" of the Company under Canadian securities laws. However, in light of the fact that the Company's board of directors (the "Board") have determined that the Company is in serious financial difficulty, the Company is relying on the exemption from the formal valuation and minority shareholder approval requirements contained in Regulation 61-101 on the basis of the "financial hardship" exemption therein.
After considering and ...
