Ocumetics seeks TSX-V OK for forbearance agreement

Executive Summary

• Ocumetics Technology Corp. is seeking TSX Venture Exchange approval for a forbearance agreement regarding $4 million in secured convertible debentures issued in May and June 2024.
• The agreement allows debtholders to forbear from demanding payment or realizing on security until June 19, 2027, despite the debentures' original maturity date being two years from issuance.
• In consideration for the forbearance, the company proposes to issue share purchase warrants to each debentureholder, calculated based on the principal plus accrued interest, with an exercise price of 58 cents.

Key Details

• Debt Instrument: Secured convertible debentures with an aggregate face value principal amount of up to $4 million.
• Original Issuance Dates: May 15, 2024; May 23, 2024; and June 21, 2024.
• Interest Rate: 18% per annum, compounded annually.
• Maturity Terms: Principal and interest are payable two years from the date of issue, subject to the forbearance agreement extending the timeline until June 19, 2027.
• Prepayment: The corporation may prepay the indebtedness at any time upon 90 days' prior written notice, without penalty.
• Conversion Terms (Principal): Convertible at the holder's option into common shares at a conversion price of 32 cents per share, valid until the maturity date.
• Conversion Terms (Interest): Interest is convertible into common shares via shares-for-debt applications at the option of the debentureholders, subject to exchange approval.
• Security: Debentures are secured by a general security agreement on the personal property of the corporation.
• Forbearance Consideration (Warrants): The company proposes to issue share purchase warrants to each debentureholder.
  • Warrant Quantity: Calculated as (Principal + Accrued Interest to date of issuance) divided by 58 cents.
  • Exercise Price: 58 cents per common share.
  • Expiry: The earlier of June 19, 2027, or the date the indebtedness is fully repaid (subject to acceleration per Exchange Policy 5.1).
• Regulatory Status: The transaction is subject to approval by the TSX Venture Exchange.