Rapid Dose Therapeutics Announces Payment in Shares for Interest on Secured Debt

Rhea-AI Summary

Rapid Dose Therapeutics (RDT) announced its plan to issue common shares to pay accrued interest on its secured convertible notes and other debt obligations. The company aims to issue 520,968 shares at $0.18 each to satisfy $93,775.72 of interest on its notes. Additionally, 41,968 shares will be issued to Madison Partners for $7,554.28 of interest on a $250,000 debt. These shares will be issued no later than July 15, 2024, and will be subject to a holding period of four months and one day.

The notes, which mature on November 30, 2025, have an annual interest rate of 12%, calculated monthly and payable quarterly in shares. The financing included $3,134,445 in notes and 15,672,225 warrants.

Positive

• Issuance of 520,968 common shares to satisfy $93,775.72 interest on notes.
• Issuance of 41,968 shares to Madison Partners for $7,554.28 interest on $250,000 debt.
• Total units issued: $3,134,445 in notes and 15,672,225 warrants.

Negative

• Issuing new shares may lead to shareholder dilution.

Burlington, Ontario--(Newsfile Corp. - July 2, 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 June 30, 2024 under the terms of the Financing and the Notes, and expects to issue the Common Shares no later than July 15, 2024.

The Financing was an offering of units (the "Units") at a price of $1.00 per Unit. Each Unit consists 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 520,968 Common Shares to the holders of the Notes at a deemed issue price of $0.18 per Common Share, being the closing market price of the Common Shares on the CSE on June 28, 2024, in satisfaction of the aggregate of $93,775.72 of accrued interest owing on the Notes.

Furthermore, the Company intends to issue 41,968 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. 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 end of the relevant interest payment date.

Accordingly, in accordance with the terms of the Madison Debt, the Company intends to issue 41,968 Common Shares to Madison Partners Corporation at a deemed issue price of $0.18 per Common Share, being the closing market price of the Common Shares on the CSE on June 28, 2024, in satisfaction of the $7,554.28 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. Forwardlooking statements are often identified by terms such as "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

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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/215288

FAQ

What is the impact of Rapid Dose Therapeutics' recent share issuance on its stock?

Rapid Dose Therapeutics announced issuing 520,968 shares to cover $93,775.72 interest on notes and 41,968 shares for $7,554.28 interest on a $250,000 debt. This could lead to shareholder dilution.

When will Rapid Dose Therapeutics issue the new shares announced on July 2, 2024?

Rapid Dose Therapeutics plans to issue the new shares no later than July 15, 2024.

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

The secured convertible notes bear an annual interest rate of 12%, calculated monthly and payable quarterly in arrears.

How many common shares will be issued by Rapid Dose Therapeutics to satisfy interest payments on June 30, 2024?

Rapid Dose Therapeutics will issue 520,968 common shares to satisfy $93,775.72 of interest payments on its secured convertible notes.

What is the closing market price of Rapid Dose Therapeutics' common shares on June 28, 2024?

The closing market price of Rapid Dose Therapeutics' common shares on June 28, 2024, was $0.18.

Who is Madison Partners in relation to Rapid Dose Therapeutics?

Madison Partners is a holding company of John McKimm, a director of Rapid Dose Therapeutics.

What is the total principal amount of notes issued in Rapid Dose Therapeutics' financing?

The total principal amount of notes issued in Rapid Dose Therapeutics' financing is $3,134,445.

What is the maturity date of Rapid Dose Therapeutics' secured convertible notes?

The maturity date of Rapid Dose Therapeutics' secured convertible notes is November 30, 2025.