AgriFORCE Growing Systems Ltd. (NASDAQ: AGRI; AGRIW), an intellectual property (IP)-focused AgTech company dedicated to advancing sustainable cultivation and crop processing across multiple verticals, today announced it has entered into a definitive agreement for a convertible debt facility of an initial principal amount of $14.025 million (which is subject to a 10% original issue discount) and up to an additional principal amount of $33 million with accredited institutional investors.
The initial conversion price of the Notes is $2.22 per share. Under the agreement, the Company expects to receive an initial amount of $12.75 million (less fees to be deducted) and would have the right to receive up to an additional aggregate of $33.0 million at the discretion of each of the investors, in one or multiple tranches, subject to certain conditions, at then-current market prices. In addition, the Investors have received 3.5-year warrants with 65% warrant coverage at an initial exercise price of $2.442 per share, subject to customary adjustments.
Upon receipt of shareholder approval, consistent with Nasdaq Rules, the Company intends to use the net proceeds of the Notes towards the closing of the previously announced acquisition of Delphy Groep BV (Delphy). This facility is in lieu of the planned convertible debt facility, previously announced in March 2022. The notes are due in 2.5 years and amortize over a 25-month period. The Company has agreed to file a resale registration statement for the shares underlying the notes and warrants.
Ingo Mueller, CEO of AgriFORCE, commented: “We are pleased to announce the consummation of this convertible debt facility, which provides us with additional flexibility by virtue of our ability to redeem the notes at a nominal premium. This facility is intended to finance the previously announced acquisition of Delphy, a Netherlands-based AgTech consultancy firm, while providing certain redemption rights in an effort to manage equity dilution.”
Additional details on the transaction will be available in the Company’s Form 8-K, which is being filed with the Securities and Exchange Commission and available on the Company’s website.