ReGen III closes convertible debenture exchange

Executive Summary

• ReGen III Corp. has closed the exchange of its Series 1 and 2 convertible debentures for new convertible debentures, exchanging approximately 97.5% of the original principal amount.
• The new debentures carry a principal amount of $1,000 each, accrue 12% interest, and include warrants exercisable at 35 cents per share.
• Insiders participated significantly in the exchange, holding 23.77% of the new debentures, constituting a related-party transaction exempt from formal valuation and minority shareholder approval under MI 61-101.

Key Details

• Transaction Volume: $3,975,000 in old debentures exchanged for new debentures, representing approximately 97.5% of the $4,075,000 principal amount of the old debentures.
• New Debenture Structure:
  • Principal: $1,000 per unsecured convertible debenture.
  • Warrants: Each debenture includes 500 common share purchase warrants.
  • Warrant Exercise Price: 35 cents per common share.
  • Warrant Term: 24 months after closing.
  • Old Warrants: All 4,075,000 old warrants were cancelled and replaced or expired unexercised.
• Interest Terms:
  • Rate: 12% per annum.
  • Payment: Payable in arrears semi-annually and on maturity.
  • Term: 24 months.
  • Interest Payment Option: After 12 months, the company may elect to pay outstanding interest in common shares at a price equal to the greater of (i) the VWAP of the 5 trading days prior to the date 5 trading days before the interest due date, or (ii) the market price determined by exchange policies.
  • Arrears Payment: All accrued but unpaid interest on old debentures paid in cash 15 days after closing.
• Conversion Terms:
  • Conversion Price: 25 cents per common share.
  • Holder Option: Convertible at the option of the holder.
• Early Redemption:
  • Timing: Available after 4 months.
  • Price: 115% of the redeemed principal in cash.
  • Interest Payment: Accrued but unpaid interest paid in cash, interest shares, or a combination.
• Hold Period: New debentures and warrants subject to a hold period until April 11, 2026.
• Insider Participation:
  • Insiders exchanged 945 debentures, representing 23.77% of the total new debentures and warrants issued.
  • If immediately converted and exercised, this would result in the issuance of 4,252,500 common shares, representing approximately 3.06% of the then issued and outstanding common shares.
  • Classified as a related-party transaction under Multilateral Instrument 61-101.
  • Exempt from formal valuation and minority shareholder approval requirements pursuant to sections 5.5(a), (b), (c) and 5.7(1)(a) and (b) of MI 61-101.