Mustgrow arranges $3M placement, to cut warrant price

Executive Summary

• Mustgrow Biologics Corp. announced a non-brokered private placement (LIFE offering) of up to $3 million, involving the issuance of up to 4,285,715 units at 70 cents per unit.
• The company proposed a repricing of 1,721,610 outstanding warrants, reducing the exercise price from $1.90 to 90 cents and introducing an acceleration clause if the share price exceeds $1.08 for 10 consecutive days.
• Mustgrow intends to offer shares for debt settlement to holders of unsecured convertible debentures, aiming to settle up to $2,585,000 in principal by issuing approximately 3,692,860 shares at 70 cents per share plus accrued interest.

Key Details

• LIFE Offering Structure:

  • Type: Non-brokered private placement.
  • Units: Up to 4,285,715 units.
  • Price: 70 cents per unit.
  • Gross Proceeds: Up to $3,000,000.
  • Composition: Each unit consists of one common share and one common share purchase warrant.
  • Warrant Terms: Exercisable for 60 months from closing; exercise price of 90 cents per share.
  • Use of Proceeds: Inventory production for TerraSante (mustard-derived organic biofertility), inventory for NexusBioAg (agricultural products), and working capital/general corporate purposes.
  • Closing Date: Expected on or about August 21, 2025.
  • Hold Periods: No hold period for Canadian resident subscribers (subject to TSX-V rules); 4-month hold period for insiders and certain consultants.
  • Finder’s Fees: Eligible finders may receive up to 6.0% of gross proceeds in cash and/or non-transferable warrants (6.0% of aggregate shares) exercisable at 90 cents for 60 months, subject to a 4-month and 1-day statutory hold.

• Warrant Repricing:

  • Target: 1,721,610 outstanding warrants issued Jan 16, 2025.
  • Current Terms: Exercise price $1.90; Expiry Jan 16, 2030.
  • New Terms: Exercise price reduced to 90 cents per share.
  • Acceleration Clause: If the closing price exceeds $1.08 for 10 consecutive trading days post-repricing, the expiry date accelerates, giving holders 30 calendar days to exercise (starting 7 days after the last premium trading day).
  • Conditions: Requires prior consent of all warrantholders and TSX-V approval.

• Shares for Debt Settlement:

  • Target: Holders of unsecured convertible debentures issued Jan 16, 2025.
  • Debt Amount: Up to $2,585,000 in outstanding principal.
  • Consideration:
    • Issuance of up to ~3,692,860 settlement shares at a deemed price of 70 cents per share.
    • Cash payment of all accrued and unpaid interest.
  • Hold Period: 4 months and 1 day from issuance date.
  • Conditions: Execution of definitive documentation with accepting holders and TSX-V approval.

• MI 61-101 Compliance:

  • Insider participation in the LIFE offering, warrant repricing, and debt settlement is anticipated.
  • Transactions are considered related party transactions under MI 61-101.
  • Company expects to rely on exemptions from formal valuation (Section 5.5(a)) and minority shareholder approval (Section 5.7(1)(a)) as the fair market value involving interested parties does not exceed 25% of market capitalization.

Notable Quotes

• None provided in the text.