LeddarTech Announces Up to US$9.0 Million Financing and US$1.5 Million of Convertible Note Conversions Above Market at US$2.00 Per Share
LeddarTech Holdings Inc. (Nasdaq: LDTC), an automotive software company, has secured up to US$9.0 million in bridge financing from its principal shareholders and senior lender. The financing includes two tranches: US$6.0 million immediate funding and US$3.0 million to be funded around October 15, 2024. Additionally, US$1.5 million of existing convertible notes will be converted into common shares at US$2.00 per share, above the current market price.
The bridge loans from FS Investors and Investissement Québec have an initial conversion price of US$5.00 per share, representing a 852% premium above the August 16, 2024 closing price. The loans bear interest at the US base rate plus 4.00%, with a maturity date of November 15, 2024. This financing is considered a related-party transaction but is exempt from formal valuation and minority shareholder approval requirements due to the company's financial hardship.
LeddarTech Holdings Inc. (Nasdaq: LDTC), un'azienda di software automobilistico, ha ottenuto finanziamenti ponte per un massimo di 9,0 milioni di dollari USA dai suoi principali azionisti e da un prestatore senior. Il finanziamento comprende due tranche: 6,0 milioni di dollari USA di finanziamento immediato e 3,0 milioni di dollari USA che saranno finanziati intorno al 15 ottobre 2024. Inoltre, 1,5 milioni di dollari USA di note convertibili esistenti saranno convertiti in azioni ordinarie a 2,00 dollari USA per azione, sopra il prezzo di mercato attuale.
I prestiti ponte da FS Investors e Investissement Québec hanno un prezzo di conversione iniziale di 5,00 dollari USA per azione, con un 852% di premio rispetto al prezzo di chiusura del 16 agosto 2024. I prestiti maturano interessi al tasso base USA più 4,00%, con una data di scadenza del 15 novembre 2024. Questo finanziamento è considerato una transazione tra parti correlate ma è esente dai requisiti di valutazione formale e approvazione degli azionisti di minoranza a causa delle difficoltà finanziarie della società.
LeddarTech Holdings Inc. (Nasdaq: LDTC), una empresa de software automotriz, ha asegurado hasta 9.0 millones de dólares estadounidenses en financiamiento puente de sus principales accionistas y un prestamista senior. El financiamiento incluye dos tramos: 6.0 millones de dólares estadounidenses de financiamiento inmediato y 3.0 millones de dólares estadounidenses que se financiarán alrededor del 15 de octubre de 2024. Además, 1.5 millones de dólares estadounidenses de notas convertibles existentes se convertirán en acciones comunes a 2.00 dólares estadounidenses por acción, por encima del precio de mercado actual.
Los préstamos puente de FS Investors e Investissement Québec tienen un precio de conversión inicial de 5.00 dólares estadounidenses por acción, representando una 852% de prima sobre el precio de cierre del 16 de agosto de 2024. Los préstamos devengan intereses al tipo base de EE.UU. más el 4.00%, con una fecha de vencimiento del 15 de noviembre de 2024. Este financiamiento se considera una transacción entre partes relacionadas, pero está exento de los requisitos de valoración formal y aprobación por parte de los accionistas minoritarios debido a las dificultades financieras de la empresa.
LeddarTech Holdings Inc. (Nasdaq: LDTC)는 자동차 소프트웨어 회사로, 주요 주주 및 선순위 채권자로부터 최대 900만 달러의 브릿지 자금을 확보했습니다. 자금 조달은 두 개의 트랜치로 구성되어 있으며: 600만 달러의 즉시 자금과 300만 달러는 2024년 10월 15일경에 자금 조달될 예정입니다. 또한, 150만 달러의 기존 전환 사채가 주식으로 2.00 달러에 전환되며, 이는 현재 시장 가격보다 높습니다.
FS Investors와 Investissement Québec의 브릿지 대출은 주당 5.00 달러의 초기 전환 가격을 가지고 있으며, 이는 2024년 8월 16일의 종가보다 852%의 프리미엄을 나타냅니다. 대출은 미국 기준금리 플러스 4.00%의 이자를 지불하며, 만기일은 2024년 11월 15일입니다. 이 자금 조달은 관련 당사자 거래로 간주되지만, 회사의 재정적 어려움으로 인해 공식 평가 및 소수 주주 승인 요구사항에서 면제됩니다.
LeddarTech Holdings Inc. (Nasdaq: LDTC), une entreprise de logiciels automobiles, a sécurisé jusqu'à 9,0 millions de dollars américains de financement relais de la part de ses principaux actionnaires et d'un prêteur senior. Le financement comprend deux tranches : 6,0 millions de dollars américains de financement immédiat et 3,0 millions de dollars américains qui seront financés autour du 15 octobre 2024. De plus, 1,5 million de dollars américains de billets convertibles existants seront convertis en actions ordinaires à 2,00 dollars américains par action, au-dessus du prix du marché actuel.
Les prêts relais de FS Investors et d'Investissement Québec ont un prix de conversion initial de 5,00 dollars américains par action, représentant une 852% de prime par rapport au prix de clôture du 16 août 2024. Les prêts portent intérêt au taux de base américain plus 4,00%, avec une date d'échéance au 15 novembre 2024. Ce financement est considéré comme une transaction entre parties liées, mais est exempté des exigences d'évaluation formelle et d'approbation des actionnaires minoritaires en raison des difficultés financières de l'entreprise.
LeddarTech Holdings Inc. (Nasdaq: LDTC), ein Unternehmen für Automobilsoftware, hat bis zu 9,0 Millionen US-Dollar an Brückenfinanzierung von seinen Hauptaktionären und einem Senior-Kreditgeber gesichert. Die Finanzierung umfasst zwei Tranchen: 6,0 Millionen US-Dollar sofortige Finanzierung und 3,0 Millionen US-Dollar, die etwa am 15. Oktober 2024 bereitgestellt werden. Darüber hinaus werden 1,5 Millionen US-Dollar bestehender wandelbarer Anleihen zu einem Preis von 2,00 US-Dollar pro Aktie in Stammaktien umgewandelt, was über dem aktuellen Marktpreis liegt.
Die Brückendarlehen von FS Investors und Investissement Québec haben einen anfänglichen Umwandlungspreis von 5,00 US-Dollar pro Aktie, was einen 852% Aufschlag über dem Schlusskurs vom 16. August 2024 darstellt. Die Darlehen tragen Zinsen zuzüglich 4,00% über dem US-Basiszinssatz und haben eine Fälligkeit am 15. November 2024. Diese Finanzierung wird als Transaktion mit verbundenen Unternehmen betrachtet, ist jedoch aufgrund der finanziellen Schwierigkeiten des Unternehmens von den Anforderungen an die formelle Bewertung und Genehmigung durch Minderheitsaktionäre befreit.
- Secured up to US$9.0 million in bridge financing to improve financial condition
- US$1.5 million of convertible notes to be converted at US$2.00 per share, above market price
- Initial conversion price of US$5.00 per share for new loans, 852% premium above current stock price
- Immediate funding of US$6.0 million available
- Company determined to be in serious financial difficulty
- High interest rate on bridge loans (US base rate plus 4.00%)
- Short-term maturity date of November 15, 2024 for bridge loans
- Second tranche of US$3.0 million conditional on securing US$5.0 million from a strategic investor
Insights
This financing deal is a double-edged sword for LeddarTech. On one hand, it provides much-needed capital, with up to
- High interest rate: US base rate (currently
9.0% ) plus4.00% 25% original issue discount on$8.0 million of the loans- Short maturity of November 15, 2024
The conversion of
The Bridge Financing's structure raises several legal considerations:
- Related-party transaction: The involvement of major shareholders FS and IQ triggers regulatory scrutiny under Regulation 61-101.
- Financial hardship exemption: LeddarTech is using this to bypass formal valuation and minority shareholder approval requirements, which is permissible but risky.
- Securities Act compliance: The unregistered nature of the Bridge Loans limits their transferability and requires careful handling to avoid violating securities laws.
The board's unanimous determination of financial hardship provides some protection, but the company remains vulnerable to potential shareholder challenges. The quick execution without a 21-day material change report further underscores the urgency of LeddarTech's financial situation.
This financing deal sends mixed signals to the market about LeddarTech's prospects:
- Positive: Major shareholders and lenders are willing to provide additional capital, showing some confidence in the company's potential.
- Negative: The high-cost financing terms suggest significant financial distress and options.
The automotive software market, particularly for ADAS and AD applications, remains promising. However, LeddarTech's struggle to secure financing on favorable terms indicates it may be losing ground to competitors. The requirement for an additional
QUEBEC CITY, Canada, Aug. 19, 2024 (GLOBE NEWSWIRE) -- LeddarTech® Holdings Inc. (“LeddarTech” or the “Company”) (Nasdaq: LDTC), an automotive software company that provides patented disruptive AI-based low-level sensor fusion and perception software technology, LeddarVision™, for ADAS, AD and parking applications, announced today that the Company entered into definitive agreements with certain of its principal shareholders, FS Investors (“FS”) and Investissement Québec (“IQ”), and its senior lender, Fédération des caisses Desjardins du Québec (“Desjardins” and, collectively with FS and IQ, the “Bridge Lenders”), pursuant to which the Bridge Lenders make available to the Company bridge loans (the “Bridge Loans”) in an aggregate amount of up to US
In connection with the Bridge Financing, FS has agreed to convert US
The Bridge Financing is comprised of two tranches, with the first tranche of US
In connection with the Bridge Financing, the Company and Desjardins have also entered into a Thirteenth Amending Agreement to the Amended and Restated Financing Offer dated as of April 5, 2023 (the “Desjardins Credit Facility”) to harmonize the Desjardins Credit Facility with the terms and conditions set forth in the Bridge Loans, and to include an amendment fee in consideration of Desjardins’ agreement to authorize the indebtedness under the Bridge Financing and that the security under the Bridge Financing will rank pari passu to the security of Desjardins under the Desjardins Credit Facility.
The Bridge Financing constitutes a “related-party transaction” within the meaning of Regulation 61-101 – Protections of Minority Security Holders in Special Transactions (“Regulation 61-101”) as each of FS and IQ is an “insider” of the Company under Canadian securities laws. However, in light of the fact that the Company’s board of directors (the “Board”) have determined that the Company is in serious financial difficulty, the Company is relying on the exemption from the formal valuation and minority shareholder approval requirements contained in Regulation 61-101 on the basis of the “financial hardship” exemption therein.
After considering and reviewing all of the circumstances currently surrounding the Company and the Bridge Financing, the Board, including all independent members of the Board who are free from interest in the Bridge Financing and unrelated to the Bridge Lenders, acting in good faith, unanimously determined that (i) the Company is in serious financial difficulty, (ii) the Bridge Financing is designed to improve the financial condition of the Company, and (iii) the terms of the Bridge Financing are reasonable in the Company’s circumstances. The Company did not file a material change report more than 21 days before entering into the Bridge Loans as details of the related parties’ participation in the Bridge Financing had not been settled.
Maxim Group LLC is acting as financial advisor to the Company for the Bridge Financing.
The Bridge Loans have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable State securities laws, and accordingly may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable State securities laws.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sales of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
About LeddarTech
A global software company founded in 2007 and headquartered in Quebec City with additional R&D centers in Montreal and Tel Aviv, Israel, LeddarTech develops and provides comprehensive AI-based low-level sensor fusion and perception software solutions that enable the deployment of ADAS, autonomous driving (AD) and parking applications. LeddarTech’s automotive-grade software applies advanced AI and computer vision algorithms to generate accurate 3D models of the environment to achieve better decision making and safer navigation. This high-performance, scalable, cost-effective technology is available to OEMs and Tier 1-2 suppliers to efficiently implement automotive and off-road vehicle ADAS solutions.
LeddarTech is responsible for several remote-sensing innovations, with over 160 patent applications (87 granted) that enhance ADAS, AD and parking capabilities. Better awareness around the vehicle is critical in making global mobility safer, more efficient, sustainable and affordable: this is what drives LeddarTech to seek to become the most widely adopted sensor fusion and perception software solution.
Additional information about LeddarTech is accessible at www.LeddarTech.com and on LinkedIn, Twitter (X), Facebook and YouTube.
Forward-Looking Statements
Certain statements contained in this Press Release may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (which forward-looking statements also include forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws), including, but not limited to, statements relating to LeddarTech’s anticipated financing and business strategy, future operations, prospects, objectives and financial projections and other financial metrics. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend” and other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: (i) the possibility that anticipated benefits of LeddarTech’s recent business combination will not be realized; (ii) the risk that shareholder litigation in connection with the business combination or other settlements or investigations may result in significant costs of defense, indemnification and liability; (iii) changes in general economic and/or industry-specific conditions; (iv) possible disruptions from the business combination that could harm LeddarTech’s business; (v) the ability of LeddarTech to retain, attract and hire key personnel; (vi) potential adverse reactions or changes to relationships with customers, employees, suppliers or other parties, including as a result of the business combination; (vii) potential business uncertainty, including changes to existing business relationships following the business combination that could affect LeddarTech’s financial performance; (viii) legislative, regulatory and economic developments; (ix) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism, outbreak or escalation of war or hostilities and any epidemic, pandemic or disease outbreak (including COVID-19), as well as management’s response to any of the aforementioned factors; (x) access to capital and financing and LeddarTech’s ability to maintain compliance with debt covenants; (xi) LeddarTech’s ability to execute its business model, achieve design wins and generate meaningful revenue; and (xii) other risk factors as detailed from time to time in LeddarTech’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”) and on the Company’s SEDAR+ profile at www.sedarplus.ca, including the risk factors contained in LeddarTech’s Annual Report on Form 20-F for the fiscal year ended September 30, 2023 filed with the SEC and on SEDAR+. The foregoing list of important factors is not exhaustive. Except as required by applicable law, LeddarTech does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
Daniel Aitken, Vice-President, Global Marketing, Communications and Investor Relations, LeddarTech Holdings Inc. Tel.: + 1-418-653-9000 ext. 232 daniel.aitken@LeddarTech.com
- Investor relations website: investors.LeddarTech.com
- Investor relations contact: Kevin Hunt, ICR Inc. kevin.hunt@icrinc.com
- Financial media contact: Dan Brennan, ICR Inc. dan.brennan@icrinc.com
Leddar, LeddarTech, LeddarVision, LeddarSP, VAYADrive, VayaVision and related logos are trademarks or registered trademarks of LeddarTech Holdings Inc. and its subsidiaries. All other brands, product names and marks are or may be trademarks or registered trademarks used to identify products or services of their respective owners.
LeddarTech Holdings Inc. is a public company listed on the Nasdaq under the ticker symbol “LDTC.”
FAQ
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