07:05 AM EDT, 06/13/2024 (MT Newswires) -- High Tide (HITI.V), which rose 5.5% in Canada yesterday, said on Thursday that it will raise $15 million in subordinated debt financing under binding subscription agreements with arm's length institutional credit providers.

Under the financing, the company will complete an offering of $1,000 principal subordinate secured debentures st $900 per debenture, representing a 10% original issue discount. The 5-year debentures will have a fixed rate of 12% per annum on drawn amounts, payable quarterly. The financing is expected to close by June 30.

The company will draw the funds in two tranches: $10 million at closing and $5 million in November. The final tranche, until drawn, will be subject to a 1% per annum standby fee.

On closing of the initial tranche, the company will issue to each lender their pro rata share of 230,760 common shares at a deemed price of $3.47 per common share, representing the 10-day volume weighted average price of the common shares on the TSX Venture Exchange ending on June 11.

The company plans to use the proceeds to repay the remaining balance of its outstanding convertible debentures and will use the remaining proceeds for ongoing development of the company's business model and general working capital purposes.