KELOWNA, BC – Avant Brands Inc. (TSX:AVNT)(OTCQX:AVTBF)(FRA:1BU0) announced today a debt settlement agreement with an institutional investor to retire approximately $1.77 million of its outstanding convertible debenture. The transaction, expected to close in March, will significantly alter the company’s debt profile, according to a press release issued Monday.
Under the agreement, Avant Brands will issue 1,900,000 units, each comprised of one common share and one-half of a share purchase warrant, at a deemed price of $0.935 per unit. This represents a premium to the current market price of the company’s common shares, Avant Brands stated.
Following the completion of this settlement, Avant’s total outstanding principal debt will consist of approximately $900,000 remaining on the debenture, down from an initial $3.9 million, and approximately $728,000 on its secured credit facility, reduced from $3.5 million. The company recently fully repaid a $9.5 million secured convertible debenture, further demonstrating its commitment to debt reduction, the release stated.
“Following a fiscal year defined by record operational performance, strategically reducing our largest debt obligation is a key component of our capitalization strategy,” said Norton Singhavon, Founder and Chief Executive Officer of Avant Brands. “Executing this retirement at a premium to market further optimizes our balance sheet efficiently, significantly reduces our quarterly cash outflow obligations, and demonstrates the strong confidence our institutional partners have in Avant’s long-term trajectory.”
The agreement includes a stipulation that the institutional investor’s beneficial ownership will not exceed 19.99% following the issuance of the units, ensuring compliance with Toronto Stock Exchange (TSX) policies regarding control persons. Each warrant will entitle the holder to purchase one share at a price of $0.935, with a five-year term commencing upon closing. The warrants are also subject to an acceleration clause: if the volume-weighted average trading price of Avant Brands’ shares on the TSX reaches or exceeds $1.75 for ten consecutive trading days, the warrant expiry date may be accelerated to 30 days.
Avant Brands reported audited fiscal 2025 results earlier this year, noting a 19% growth in recreational revenue, according to a Yahoo Finance report. The company’s brands include blk mkt™, Tenzo™, CognÅ scente™, flowr™, and Treehugger™, and it has an international presence in Australia, Israel, and Germany.
The transaction is subject to final approval from the TSX and customary closing conditions. Shareholder approval is not required. All securities issued will be subject to a statutory hold period of four months and one day, as per Canadian securities laws.