Rapid Dose Announces Payment in Shares for Interest on Secured Debt

Rhea-AI Summary

Rapid Dose Therapeutics Corp. (CSE: DOSE) has announced its intention to issue common shares to satisfy accrued interest on its secured convertible notes and Madison Debt. The company plans to issue 557,677 common shares at $0.17 per share to noteholders, covering $94,806.23 in accrued interest. Additionally, 39,996 common shares will be issued to Madison Partners for $6,799.37 in accrued interest on the Madison Debt. These shares are expected to be issued by October 15, 2024.

The secured convertible notes, part of a private placement financing, have a maturity date of November 30, 2025 and bear 12.0% annual interest. The company previously issued $3,134,445 in principal amount of notes and 15,672,225 warrants. All common shares issued as interest payment will be subject to a four-month and one-day hold period from the date of issue.

Positive

• Interest payments made in shares conserve cash for the company
• Successful closure of all four tranches of the Financing in 2023, raising $3,134,445

Negative

• High interest rate of 12.0% per annum on the Notes and Madison Debt
• Potential dilution of existing shareholders due to interest payments in shares
• Secured debt obligations may limit financial flexibility

Burlington, Ontario--(Newsfile Corp. - October 1, 2024) - Rapid Dose Therapeutics Corp. (CSE: DOSE) ("RDT" or the "Company") announced today that as contemplated in the secured convertible notes (the "Notes") previously issued on its private placement financing (the "Financing"), the Company intends to issue common shares ("Common Shares") in satisfaction of the accrued interest payable on September 30, 2024 under the terms of the Financing and the Notes, and expects to issue the Common Shares no later than October 15, 2024.

The Financing was an offering of units (the "Units") at a price of $1.00 per Unit. Each Unit consisted of $1.00 principal amount of Notes and five common share purchase warrants of the Company (the "Warrants"). The Company closed all four tranches of the Financing in 2023, issuing an aggregate of $3,134,445 principal amount of Notes and 15,672,225 Warrants.

The Notes have a maturity date of November 30, 2025 and bear interest from their date of issue at 12.0% per annum, calculated monthly, accrued, added to principal and payable quarterly in arrears in Common Shares at a price per share equal to the closing market price of the Common Shares on the Canadian Securities Exchange (the "CSE") on the last trading day of each calendar quarter.

In accordance with the terms of the Notes and the Financing, the Company intends to issue 557,677 Common Shares to the holders of the Notes at a deemed issue price of $0.17 per Common Share, being the closing market price of the Common Shares on the CSE on September 30, 2024, in satisfaction of the aggregate of $94,806.23 of accrued interest owing on the Notes.

Furthermore, the Company intends to issue 39,996 Common Shares to Madison Partners Corporation in connection with the $250,000 of secured debt with a maturity date of September 22, 2024 held by Madison Partners Corporation (the "Madison Debt"). Madison Partners Corporation is a holding company of John McKimm, a director of the Company.

Interest on the Madison Debt is 12.0% per annum calculated monthly, compounded, accrued, added to the principal amount and payable quarterly in arrears on a calendar quarter basis until the Madison Debt is fully repaid. The Madison Debt (other than interest accrued during the most recent quarter) has been repaid. Interest is payable in Common Shares at the price per share equivalent to the closing market price of a Common Share on the CSE on the last trading day immediately preceding the relevant quarter end.

Accordingly, in accordance with the terms of the Madison Debt, the Company intends to issue 39,996 Common Shares to Madison Partners Corporation at a deemed issue price of $0.17 per Common Share, being the closing market price of the Common Shares on the CSE on September 30, 2024, in satisfaction of the $6,799.37 of accrued interest owing on the Madison Debt.

All Common Shares issued as payment for accrued interest will be subject to a hold period expiring four months and one day from the date of issue of the Common Shares.

About Rapid Dose Therapeutics Corp.

Rapid Dose Therapeutics is a Canadian biotechnology company revolutionizing drug delivery through innovation. The Company's flagship product QuickStrip™ is a thin, orally dissolvable film, that can be infused with an infinite list of active ingredients, including nutraceuticals, pharmaceuticals and vaccines, that are delivered quickly into the bloodstream, resulting in rapid onset of the active ingredient. For more information about the Company, visit www.rapid-dose.com.

Contacts:

RDT Investor Contact:
Mark Upsdell, CEO
mupsdell@rapid-dose.com
416-477-1052

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

Certain information in this news release may contain forward-looking information within the meaning of applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "intend", "may", "should", "anticipate", "expect", "potential", "believe", "intend", "will", "could", "are planned to", "are expected to" or the negative of these terms and similar expressions. Statements containing forward-looking information, including, without limitation, in respect of the delivery of equipment and products using the QuickStrip™ product delivery method, the generation of recurring revenues, the plans, estimates, forecasts, projections, expectations or beliefs of RDT management as to future events or results and are believed to be reasonable based on information currently available to RDT management. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; termination of WLM agreements; future legislative and regulatory developments involving cannabis; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the cannabis industry in Canada generally, income tax and regulatory matters; the ability to implement its business strategies; competition; currency and interest rate fluctuations and other risks. Readers are cautioned that the foregoing list is not exhaustive. There can be no assurance that statements of forward-looking information, although considered reasonable by RDT management at the time of preparation, will prove to be accurate as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Actual results and future events could differ materially from those anticipated in such forward-looking statements. Readers should not place undue reliance on forward-looking statements. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release, and the Company expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/225320

FAQ

How many common shares will Rapid Dose Therapeutics (RDTCF) issue for interest payment on September 30, 2024?

Rapid Dose Therapeutics plans to issue 557,677 common shares to noteholders and 39,996 common shares to Madison Partners , totaling 597,673 common shares for interest payment on September 30, 2024.

What is the interest rate on Rapid Dose Therapeutics' (RDTCF) secured convertible notes?

The secured convertible notes issued by Rapid Dose Therapeutics bear interest at 12.0% per annum, calculated monthly and payable quarterly in arrears in common shares.

When is the maturity date for Rapid Dose Therapeutics' (RDTCF) secured convertible notes?

The secured convertible notes issued by Rapid Dose Therapeutics have a maturity date of November 30, 2025.

How much principal amount of Notes did Rapid Dose Therapeutics (RDTCF) issue in its 2023 Financing?

Rapid Dose Therapeutics issued an aggregate of $3,134,445 principal amount of Notes in its 2023 Financing.