Troubadour Resources Inc. (TSXV:TR; OTC PINK:TROUF) has revised the pricing of two previously announced concurrent non-brokered private placements. The Offerings have not closed and may be completed in one or more tranches. Neither Offering depends on the completion of the other.
#Revised Unit Offering
The price for each Unit has been changed from $0.09 to $0.06. The exercise price for the accompanying Unit Warrants has also been changed, from $0.12 to $0.08.
Troubadour is offering up to 8,333,333 Units at $0.06 per Unit, for gross proceeds of up to $500,000. Each Unit consists of one common share and one Unit Warrant. Each Unit Warrant permits the holder to acquire one additional common share at an exercise price of $0.08 for thirty-six (36) months from the date of issuance.
A subscriber may acquire no more than 1,518,678 Units. Warrant exercises are restricted if they would result in the holder, together with its associates and affiliates, beneficially owning or controlling more than 9.9% of the Company's then-outstanding common shares.
#Revised Debenture Offering
The conversion price for the Debentures has been changed from $0.12 to $0.08 per Debenture Unit during the first year following issuance, and to $0.10 per Debenture Unit thereafter. The exercise price of the warrants included in each Debenture Unit has been changed from $0.14 to $0.08. Troubadour said the remaining terms of the Debenture Offering are unchanged.
The Company continues to offer up to $529,412 aggregate principal amount of unsecured convertible debentures. The securities carry an original issue discount of 15%; each $1,000 principal amount has a subscription price of $850, and the maximum principal amount represents gross proceeds of $450,000. The minimum subscription is $25,000 principal amount per subscriber.
The Debentures mature three (3) years from the issuance date of the first tranche. They accrue interest at 20.0% per annum, calculated and compounded monthly, with payment due quarterly in arrears. The rate increases by an additional 4.0% per annum, to 24.0%, during an event of default.
At the Company's election, accrued interest may be paid in common shares at a price no lower than the market price when the interest becomes payable, subject to acceptance by the TSX Venture Exchange. The Debentures are unsecured and unsubordinated obligations ranking pari passu with the Company's other unsecured and unsubordinated indebtedness.
#Conversion, Warrants and Repayment Terms
Debenture holders may convert their securities into Debenture Units at the applicable conversion price at any time before maturity. Each Debenture Unit contains one common share and one warrant. The warrant is exercisable at $0.08 per share for five years from the date the Debentures are issued.
A holder may not convert Debentures or exercise the underlying warrants if doing so would result in the holder, together with its associates and affiliates, holding 9.9% or more of the Company's then-outstanding common shares, unless shareholder approval has first been obtained.
The Debentures cannot be prepaid before the second anniversary of issuance without holder consent. After that point, Troubadour may prepay them on 30 days' notice at 110% of the principal amount prepaid, plus accrued and unpaid interest and a make-whole amount equal to the interest that would have accrued to maturity. Holders may convert during the notice period.
If a change of control occurs, each holder may require the Company to repurchase its Debentures at 125% of principal plus accrued and unpaid interest, or may choose to convert the Debentures.
#Use of Proceeds and Transaction Conditions
Troubadour intends to use net proceeds from the Offerings for general working capital and corporate purposes. Company insiders may participate in the Unit Offering, including through the settlement of indebtedness owed by Troubadour. Such participation would constitute a related party transaction under Multilateral Instrument 61-101.
The Company expects to rely on exemptions from the formal valuation and minority approval requirements under sections 5.5 and 5.7 of MI 61-101 because the fair market value of the participation will not exceed 25% of the Company's market capitalization. Details of any insider participation are expected to be included in the announcement of closing.
Troubadour may pay finder's fees in cash and/or finder's warrants in accordance with TSX Venture Exchange policies. The Offerings remain subject to acceptance by the Exchange.
All securities issued through the Offerings, along with securities issuable on conversion or exercise, will be subject to a statutory hold period of four months and one day from the date of issuance under National Instrument 45-102 - Resale of Securities, as well as any additional hold period required by Exchange policies.
The securities have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States unless registered or covered by an applicable exemption.
#About Troubadour Resources
Based in Vancouver, British Columbia, Troubadour Resources is a North American mineral acquisition and exploration company focused on critical mineral and precious metal properties that it describes as drill-ready and having high-upside and expansion potential. Its shares trade on the TSX Venture Exchange under TR and on the OTCPK under TROUF.
#Key Takeaways
- The two non-brokered private placements have not closed and are subject to TSX Venture Exchange acceptance.
- Unit pricing has changed to $0.06, with Unit Warrants exercisable at $0.08 for thirty-six (36) months.
- Debenture conversion pricing is $0.08 during the first year after issuance and $0.10 thereafter, while related warrants are exercisable at $0.08 for five years.
- The Debentures carry 20.0% annual interest, rising to 24.0% during an event of default, and include restrictions on prepayment and ownership.
- Securities issued, or issuable on conversion or exercise, are subject to a statutory hold period of four months and one day, along with any additional Exchange requirements.
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