MTL Cannabis issues 14.5M warrants to Archerwill

Executive Summary

• MTL Cannabis Corp. voluntarily prepaid the full outstanding principal of its secured convertible debenture held by Archerwill Investments Inc., totaling $6.5 million, plus accrued interest.
• In connection with the debt repayment, MTL Cannabis issued 14,466,568 new warrants to Archerwill, exercisable at 57.49 cents per share until August 5, 2027.
• Archerwill and its joint actor increased their total beneficial ownership of MTL Cannabis common shares and warrants, raising their effective voting interest from approximately 10.7% to 11.6%, while maintaining no intention to acquire further securities in the near term.

Key Details

• Debt Prepayment: MTL Cannabis prepaid the entire principal amount of the amended and restated 8.00% secured convertible debenture (originally dated July 22, 2022, and amended June 28, 2023).
• Total Consideration: The aggregate payment for principal and accrued/unpaid interest was $8,316,830.21.
• New Warrants Issued: Archerwill received 14,466,568 warrants exercisable for 14,466,568 common shares.
• Warrant Terms:
  • Exercise Price: 57.49 cents per share (subject to adjustment).
  • Expiration Date: August 5, 2027.
• Recent Share Acquisitions: Between December 17, 2024, and January 28, 2025, a joint actor of Archerwill acquired 512,500 common shares at an average price of 33 cents per share, totaling $169,502.38.
• Previous Holdings (as of Dec 18, 2024):
  • Common Shares: 374,067.
  • Convertible Debenture Principal: ~$5.25 million (convertible into ~13,866,096 shares).
  • Warrants: 3,907,623.
  • Effective Ownership: ~10.7% (assuming full conversion/exercise).
• Current Holdings:
  • Common Shares: 616,567.
  • Warrants: 18,374,191 (exercisable for 18,374,191 common shares).
  • Effective Ownership: ~11.6% (assuming full conversion/exercise, accounting for anti-dilution securities from the MCMI acquisition).
• Strategic Intent: Archerwill and its joint actor stated they have no intention of acquiring further securities of MTL Cannabis at present, though future acquisitions may occur depending on market conditions.
• Regulatory Filing: An early warning report regarding this transaction is being filed on SEDAR+.