Mustgrow Biologics closes financing, reprices warrants

Executive Summary

• Mustgrow Biologics Corp. closed a non-brokered private placement under the Limited Issuer Financing Exemption (LIFE), raising approximately $2.1 million in gross proceeds.
• The company repriced outstanding warrants from its January 2025 private placement, lowering the exercise price from $1.90 to $0.90 and adding an acceleration clause.
• The company settled approximately $2.385 million in unsecured convertible debentures by issuing shares and paying accrued interest.

Key Details

• LIFE Offering Structure:
  • Closed 3,059,731 units at a price of $0.70 per unit.
  • Gross proceeds of approximately $2,141,812.
  • Each unit consists of one common share and one common share purchase warrant.
  • Warrants are exercisable for 60 months at an exercise price of $0.90 per share.
  • Net proceeds intended for inventory production for TerraSante, inventory for NexusBioAg, and working capital.
• Finder’s Fees:
  • Aggregate cash fee of $86,332.60 (6.0% of gross proceeds from introduced investors).
  • Issuance of 123,318 non-transferable warrants to finders (6.0% of aggregate shares issued to introduced investors).
  • Finder warrants have a $0.90 exercise price and a 60-month term.
• Warrant Repricing:
  • Repriced 1,721,610 warrants originally issued Jan. 16, 2025.
  • Exercise price reduced from $1.90 to $0.90 per share.
  • Expiry date remains Jan. 16, 2030.
  • Acceleration Provision: If the share closing price exceeds $1.08 for 10 consecutive trading days, the expiry accelerates, giving holders 30 calendar days to exercise.
  • Subject to final TSX-V approval.
• Share-for-Debt Settlement:
  • Settled outstanding principal of $2,385,000 on unsecured convertible debentures.
  • Consideration: Up to ~3,407,134 shares at a deemed price of $0.70 per share.
  • Cash payment of all accrued and unpaid interest included.
  • Settlement shares subject to a 4-month and 1-day statutory hold period.
  • Subject to final TSX-V approval.
• Insider Participation & MI 61-101:
  • Insiders purchased 285,716 units in the LIFE offering.
  • Insiders participated in warrant repricing and share-for-debt settlement.
  • All insider-issued securities subject to a 4-month hold period.
  • Transactions treated as related party transactions under MI 61-101; exemptions from formal valuation and minority shareholder approval relied upon as fair market value involving interested parties does not exceed 25% of market capitalization.