2023-11-15 16:22 ET – News Release
Mr. Adam Giddens reports
X1 ANNOUNCES CLOSING OF CONVERTIBLE DEBENTURE FINANCING
Further to X1 Entertainment Group Inc.’s news release on Nov. 1, 2023, the company has completed a non-brokered private placement of unsecured convertible debentures for gross proceeds of $500,000. A portion of the offering, approximately $146,106, was completed through the distribution of debentures in settlement of existing debt.
The debentures mature on the date that is 12 months from the date of issuance and bear interest at a rate of 5.0 per cent per annum from the closing date, payable on the earlier of the maturity date or the conversion date (defined herein). The company has the right to pay all accrued and unpaid interest either in cash or in units (defined herein) at a price of 5.5 cents per unit, in its sole discretion, and on the maturity date also has the right to convert the principal amount of the debentures into units rather than repay in cash.
The principal amount of debentures may be converted into units of the company, in whole or in part, at the option of the holder, at any time following the closing date but on or before the maturity date, into units at a price of 5.5 cents per unit (such date of conversion being referred to herein as the conversion date).
Each unit will consist of one common share in the capital of the company and one share purchase warrant. Each warrant will entitle the holder thereof to acquire one additional share at a price of 5.5 cents per warrant share for a period of 24 months from the date of issuance.
The company intends to use the net proceeds from the offering for working capital to allow the company to explore strategic acquisition opportunities (and pay costs related to legal, accounting and diligence as it relates to such acquisition opportunities), as well as settling current debts to the company’s lawyers and auditors.
All securities issued in connection with the offering are subject to applicable resale restrictions as prescribed by National Instrument 45-102 — Resale of Securities and the policies of the Canadian Securities Exchange.
The subscribers in the offering included three officers and directors of the company, as well as one corporate subscriber wholly owned by a director and officer of the company (collectively, the insiders), who subscribed for debentures with an aggregate principal amount of $134,860.27. The issuance of debentures to the insiders constitute related party transactions as defined in Multilateral Instrument 61-101 — Protection of Minority Securityholders in Special Transactions. The company is relying on the exemption from valuation requirement and minority approval pursuant to Subsection 5.5(a) and 5.7(1)(a) of MI 61-101, respectively, for the insiders participation in the offering, as the debentures do not represent more than 25 per cent of the company’s market capitalization, as determined in accordance with MI 61-101.
About X1 Entertainment Group Inc.
X1 is a portfolio company that has targeted assets across the gaming, e-sports, media and entertainment industries. Based in Vancouver, B.C., the company is publicly traded on the Canadian Securities Exchange under the ticker symbol (CSE: XONE).
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