Biotech psychedelics company HAVN Life Sciences Inc. (OTC:HAVLF) recently closed the initial tranche of its financing pact with innovative fund Alpha Blue Ocean (“ABO”), previously announced on July 21, 2022.
Since its creation in 2017, ABO has executed more than $1.5 billion in financial commitments and more than 90 transactions, mostly within the life sciences sector, all around the globe.
Following the current first-tranche closing, HAVN issued to the investment fund managed by ABO “Global Corporate Finance Opportunities 17” a total $1,100,000 principal amount of senior unsecured convertible debenture as well as 189,393 common share purchase warrants for net proceeds of approximately $420,000.
The convertible debenture may become common shares and in certain cases cash-repayable. Also, each warrant entitles the purchase of an additional common share at $1.32 each for a period of 60 months since issuance date.
The fund purchasing the convertible debenture and warrants got paid a commitment fee of $600,000 on behalf of HAVN, payable through additional $600,000 of the principal amount of the convertible debenture and 489,130 common “compensation” shares.
Those shares would be returned to HAVN if either 36 months since the date of the agreement go by or if the agreement is terminated before its convened period; if all outstanding credits issued under the agreement have been converted by their holder(s); if HAVN is not in breach of the agreement; and if no outstanding payment and no delivery of common shares (from a conversion of the senior unsecured convertible debentures issued under the agreement), nor the exercise of any of the common share purchase warrants by HAVN to the subscriber is left,
HAVN has also agreed to issue 190,214 common “debt” shares at $1.15 each in order to settle an aggregate $218,746.53 of indebtedness to certain third-party creditors.
All shares have been set for listing by HAVN on the CSE.
Agreement Details
Following the closing of the first tranche, the subscriber (P.O. Box 2775, 67 Fort Street, Artemis House, Grand Cayman, KY1-1111, Cayman Islands) acquired an aggregate principal amount of $1,100,0000 convertible debentures and 189,393 warrants.
Each warrant is exercisable at an exercise price of $1.32 per underlying warrant share, subject to adjustment in accordance with the terms of the certificate representing the warrants.
Prior to the closing of the first tranche, the subscriber did not beneficially own or control any HAVN securities. Immediately following the closing of the first tranche, the investor holds 189,393 warrants, $1,100,000 principal amount of convertible debentures and 489,130 of compensation shares representing 9.57% of the issued and outstanding common shares of the company on a non-diluted basis and 25.59% of the common shares on a partially diluted basis, assuming the conversion of the outstanding debentures into common shares at a price of $1.00.
The convertible debentures were acquired, in the ordinary course of business, for investment purposes only and pursuant to the terms of the subscription agreement, pursuant to which the Subscriber is expected to acquire control and direction over additional convertible debentures as further Tranches close and common shares upon the conversion thereof.
ABO Infinium Americas Opco Ltd. exercises control or direction over the convertible debentures and warrants in its capacity as investment manager. However, the subscriber beneficially owns the securities. This investment will be reviewed on a continuing basis and ABO Infinium Americas Opco Ltd., on behalf of the subscriber, may further increase or decrease its ownership, control or direction over HAVN securities depending on market conditions, reformulation of plans and/or other relevant factors.
The subscription agreement prohibits the conversion of such debentures into common shares in the event that the subscriber would hold in excess of 9.99% or 19.99% of the common shares following conversion.
Further HAVN Warrants’ Update
HAVN has also amended specific common share purchase warrants issued to Armistice Capital Master Fund Ltd, in such a way as to reduce their exercise price from $3.75 to $2.70 per common share.
This possibility would have to be approved by the CSE; and, if during the 90-day period after the 30:1 share consolidation proposed the common shares’ volume-weighted average price (VWAP) over any fifteen consecutive trading day period falls by greater than 30%, the exercise price of the warrants would be adjusted as to equate 120% of the fifteen trading day VWAP of the common shares.
What’s more, the company announced it has issued 16,669 new common share purchase warrants to certain designees of H.C. Wainwright & Co., which will be entitled to acquire one common share at $2.70 each.
These new warrants were issued as consideration for Wainwright waiving its exclusivity according to an engagement with HAVN set on a letter of January 31, 2022, for the issuance of certain convertible debentures.
