GreenSpace Brands Inc. reported the culmination of a nearly five-month strategic review process and after careful consideration by a special committee of the Board of Directors, the Company has decided to pursue a non-brokered private placement which it believes maintains the best value for its shareholders. In conjunction with the Private Placement the Company has reached an agreement to amend certain loan agreements with its two term lenders. Under the terms of the loan amendments, among other things, the lenders have agreed to extend the loan maturity dates by 12 months and agreed to an amended coupon rate of 12%. The Debt Restructuring is being arranged by the two principal non-senior lenders, Primary Capital and MillRoad Capital. Under the Debt Restructuring, both principal lenders have agreed to extend their debt terms by 12 months, amend the coupon rate to 12% per annum, and accrue all interest in lieu of payment in the 12-month extension period.
Primary Capital has also been extended the right to convert a portion of its loan into equity on the same terms as the Private Placement. MillRoad will receive a monthly extension fee, starting in mid-February 2020, of $10,000 per month, which will increase to $20,000 per month after six months. Primary Capital will receive a similar extension fee with a structure commensurate with the amount of their unpaid and unconverted debt.
The Private Placement was decided upon because the Special Committee and the Board of Directors did not feel any of the brand level indications of interest provided adequate value for the brand portfolio, nor were they in the best interests of shareholders. Indications of interest were received on all major brands but, in the opinion of the Board of Directors, none of the indications of interest delivered adequate value while also providing a high level of deal certainty. The Board of Directors has decided to end the strategic review process after undertaking the Private Placement and Debt Restructuring.
Under the Private Placement, the Company will issue up to 50 million units at a price of $0.10 per Unit for aggregate gross proceeds of up to $5 million. Each Unit will consist of one common share in the capital of the Company and one-half of one common share purchase warrant of the Company. Each whole Warrant will entitle the holder thereof to acquire one Common Share at an exercise price per Common Share of $0.20 for a period of 36 months from the closing of the Private Placement. In addition, the Company will allow part of its outstanding primary debt to convert into Units at the Issue Price. Certain finders will receive a cash fee equal to 6% of the gross proceeds of the Private Placement and finders warrants equal to 6% of the number of Units issued pursuant to the Private Placement. Each Finder Warrant will entitle the holder thereof to acquire one Unit at the Issue Price for 36 months following the closing of the Private Placement.
The Private Placement will be made to accredited investors in all provinces of Canada and is expected to close in tranches in January, 2020, and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The Units, including all underlying securities thereof, will be subject to a four-month hold period.
About GreenSpace Brands Inc.
GreenSpace is a Canadian-based brand ideation team that develops, markets and sells premium natural food products to consumers across North America. GreenSpace owns Love Child, a producer of 100% organic food for infants and toddlers made with the purest, natural and most nutritionally-rich ingredients, Central Roast, a clean snacking brand featuring a wide assortment of nut and seed mixes, CEDAR, a Canadian based Cold Press Juice business and GO VEGGIE, one of the leaders in the US plant-based cheese market.
