Clip Money Inc has announced a non-brokered private placement and it will receive CAD 14,954,830 ($11,000,000) on September 11, 2023. The company will issue 28,963,900 common shares at a price of CAD 0.23 for gross proceeds of approximately CAD 6,661,697 ($4,900,000) and secured convertible notes for gross proceeds of CAD 8,293,133 ($6,100,000) in the transaction. The lead subscriber under the financings is a strategic investor who will be investing an aggregate amount of CAD 13,595,300 ($10,000,000) across the financings.

The remaining CAD 1,359,530 ($1,000,000) will be taken up across the financings by another investor. In connection with the financings, an affiliate of the investor will also be entering into a commercial partnership with the company. The secured convertible notes issued under the convertible notes financing will be due and payable on the date that is 60 months from the date of issuance and will accrue simple interest at a rate of 8% per annum, payable at the maturity date.

The convertible notes will be convertible into common shares of the company at any time, in whole or in part, on or prior to the maturity date at the option of the holder, based on the principal amount of the convertible notes being converted divided by a conversion price of CAD 0.26 per common share. No accrued interest shall be paid on any part of the convertible notes that is converted into common shares. The convertible notes will be secured by a first-lien security interest in all of the assets of the company.

Closing of the equity financing and the convertible note financing is subject to obtaining all necessary corporate and regulatory approvals, including approval of the TSX Venture Exchange, as well as shareholder consent. All securities to be issued in connection with the equity financing and the convertible note financing will be subject to a statutory hold period of four months plus a day from the date of issuance in accordance with applicable securities legislation in Canada. Following completion of the financings, the investor will be a control person of the company.

The transaction is expected to close before the end of the month.