Horizon Petroleum raises debenture size to $1.21M

Executive Summary

• Horizon Petroleum Ltd. has amended the terms of its previously announced private placement of secured convertible debentures, increasing the aggregate principal amount from $1.2 million to $1,215,000.
• The conversion price for the debentures has been increased from 10 cents to 10.5 cents per unit, and the offering is expected to close on March 23, 2026.
• The transaction constitutes a related party transaction as certain directors and officers are expected to participate, though it is exempt from formal valuation and minority approval requirements under Multilateral Instrument 61-101.

Key Details

• Transaction Structure: Private placement of secured convertible debentures.
• Aggregate Principal Amount: Increased to $1,215,000 (up from the previous $1.2 million).
• Price Per Debenture: $1,000 per debenture.
• Interest Rate: 7% per annum, accruing from the issuance date until the maturity date (24 months following closing).
• Maturity Date: 24 months following the closing date.
• Anticipated Closing Date: March 23, 2026.
• Security Ranking: Secured and ranking in third position on default, behind Series 1 debentures (due May 20, 2026) and Series 2 convertible debentures (due Dec. 19, 2027, Dec. 29, 2027, and Feb. 27, 2028).
• Conversion Terms:
  • Convertible into units of the company at the holder's option prior to the close of business on the last business day preceding the maturity date.
  • New Conversion Price: 10.5 cents per unit (increased from the previous 10 cents).
  • Subject to adjustment in certain events.
• Unit Composition: Each unit comprises one common share and one-half of one common share purchase warrant.
• Warrant Terms:
  • Exercisable to acquire one common share.
  • Exercise Price: 15 cents per common share (subject to adjustment).
  • Expiration: 36 months from the debenture closing date.
• Insider Participation: Certain directors and officers are expected to participate, making this a related party transaction under Multilateral Instrument 61-101.
• Regulatory Exemptions: Exempt from formal valuation and minority approval requirements of MI 61-101 via sections 5.5(a) and 5.7(1)(a). No special committee was established, and no materially contrary views were expressed by directors.
• Finder’s Fees: Up to 7% in cash and 7% in warrants.
• Conditions Precedent: Subject to customary conditions, including approval of the TSX Venture Exchange (TSX-V).
• Hold Period: All securities issued are subject to a statutory four-month hold period.

Notable Quotes

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