Grown Rogue International Inc. (“Grown Rogue” or the “Company“) (CSE: GRIN) (OTC: GRUSF), a craft cannabis company operating in Oregon and Michigan, announces that it proposes to conduct a non-brokered private placement of unsecured convertible debentures (each, a “Debenture“) with an aggregate principal amount (the “Principal Amount“) of up to US$5,000,000 (the “Offering“). Each subscriber under the Offering (each a “Debentureholder“) shall receive one-half of one common share purchase warrant (the “Warrants“) for each C$0.24 of Principal Amount subscribed. The Company may, at its option, increase the Offering by an additional US$1,000,000 for gross proceeds of up to US$6,000,000.
The Debentures will mature four years from the Closing Date (as defined below) (the “Maturity Date“), bear interest at a rate equal to 9% per annum, payable in United States currency on the last business day of the month following the end of each calendar quarter and are convertible as set forth below into common shares of the Company (each, a “Share“).
Debentureholders will be entitled, at their option, to convert, at any time on or prior to the Maturity Date, the outstanding Principal Amount and accrued interest into Shares at a price per Share equal to C$0.24. The Company may elect to prepay the Principal Amount together with any interest thereon prior to the Maturity Date upon providing 30 days’ notice to the Debenture holder.
Each full Warrant will be exercisable into one Share (a “Warrant Share“) at an exercise price of C$0.28 for a period of three years from the Closing Date (the “Warrant Expiry Date“) and are subject to an acceleration clause that in the event that the Shares close at or above C$0.40 per share on the Canadian Securities Exchange for ten consecutive trading days (the “Acceleration Event“), the Warrant Expiry Date shall accelerate to 90 days following notice of the Acceleration Event.
The proceeds of the Offering will be used for the expansion of the Company’s business and for general corporate purposes. The Offering is expected to close in multiple tranches within 30 days, with the first closing occurring on or about July 14, 2023 (the “Closing Date“). The Debentures, the Warrants as well as the underlying Shares, will be subject to a statutory hold period for a period of four months and one day from the Closing Date
This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) or any state securities laws and may not be offered or sold within the United Statesor to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
