TERAGO ANNOUNCES CLOSING OF RECAPITALIZATION TRANSACTIONS
Executive Summary
- TERAGO Inc. completed a multi‑component recapitalization consisting of a rights offering, a concurrent private placement, and the refinancing of its term debt facility, raising approximately $15.9 million in gross proceeds.
- The rights offering issued 12,675,208 common shares at $0.84 each, generating $10.65 M; the private placement sold 6,249,756 shares for $5.25 M.
- A new US$21.77 M three‑year term loan was secured, accompanied by issuance of 2,053,411 warrants (60‑month exercise at $0.84).
Key Details
- Rights Offering
- Shares issued: 12,675,208 common shares @ $0.84 per share.
- Gross proceeds: ≈ $10,647,174.
- Standby purchasers: Cymbria (4,761,904 shares for $4 M) and Hunsbury (1,500,000 shares for $1.26 M).
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Total standby purchaser acquisition: 6,261,904 shares for $5,260,000.
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Concurrent Private Placement
- Shares issued: 6,249,756 common shares @ $0.84 per share.
- Gross proceeds: ≈ $5,249,795.
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Subject to statutory hold period of 4 months + 1 day.
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Aggregate Issuance & Proceeds
- Total shares issued across both transactions: 18,924,964 common shares.
- Aggregate gross proceeds: ≈ $15,896,969.
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Post‑transaction outstanding shares: 38,997,457 common shares.
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New Term Debt Facility
- Principal amount: US $21,770,000 (3‑year term).
- Lender: EdgePoint (administrative and collateral agent) with affiliate as sole lender; possible syndication.
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Warrants issued to lenders: 2,053,411 warrants, each exercisable for one common share at $0.84 for 60 months from issuance.
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Use of Proceeds
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Funding capital expenditures, transaction fees and expenses, and general corporate working‑capital purposes.
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Advisors & Fees
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Origin Merchant Securities Inc. retained as exclusive financial advisor; customary advisory fees paid from gross proceeds.
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Regulatory / Related Party Considerations
- Transactions qualify for exemptions under MI 61‑101 (related‑party rules).
- Conditional approval received from the Toronto Stock Exchange; final TSX approval pending.
Notable Quotes
“This recapitalization marks an important milestone for TERAGO, strengthening our balance sheet and providing the flexibility to advance our strategic priorities.” – Daniel Vucinic, President & CEO, TERAGO
“We are pleased to have played a leading role in this recapitalization, which provides TERAGO with the financial flexibility and strategic runway to capitalize on its valuable spectrum assets.” – Frank Mullen, Chief Investment Officer, EdgePoint Investment Group Inc.