Stem Holdings Seeking Approval To Reprice Convertible Debentures

Stem Holdings, Inc. STMH STEM is seeking the approval of the holders of the CA$3.69 million ($2.94 million) principal amount of convertible debentures to reprice the convertible debentures. The convertible debentures presently mature on June 27, 2022, and September 14, 2022.

The conversion price for the convertible debentures are proposed to be repriced to CA$0.10 per common share which was previously at CA$1.15 ‎per common share. Additionally, the following amendments to the terms of the convertible ‎debentures are being proposed to the debentureholders:

  • An extension to the maturity date of the convertible debentures for an additional three years.

  • An amendment to permit the company to force the conversion of the principal amount of the ‎then outstanding convertible debentures and any accrued and unpaid interest thereof at the new conversion price ‎on not less than 30 days’ prior written notice if the closing trading price of the shares of common stock of Stem exceeds CA$0.80 for a period of 10 consecutive trading days on the CSE. ‎

The repricing of convertible debentures, the debenture amendments will be implemented pursuant to the terms of supplemental indentures entered into ‎between the company and Olympia Trust Company dated as of the date hereof. The debenture amendments require the written approval of 66 2/3% of the debentureholders.

As part of the amendment, the company expects to issue 167 common share purchase warrants for each debenture unit amount of $1,000 held which will be priced at CA$0.20 for a period of 24 months. In addition, the debenture amendment, if approved, will provide for the payment of 5% of the principal amount upon the completion of the debenture amendments.

The debenture amendments remain subject to CSE acceptance.

Photo by Tim Foster on Unsplash

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