Forbidden Spirits Distilling Corp. announced a non-brokered private placement to issue convertible debenture units for aggregate gross proceeds of CAD 8,000,000 on April 5, 2022. Each unit will comprise one secured convertible debenture of the company in the aggregate principal amount of CAD 1,000 and 500 common share purchase warrants of the company.

Each convertible debenture shall be convertible into common shares of the company at a price of CAD 0.30 per share for a period of three years following the closing date. Each warrant entitles the holder to acquire one common share at a price of CAD 0.50 for a period of two years from the closing date. The convertible debentures shall bear simple interest at a rate of 8.0% per annum from the date of issue and payable semi-annually in arrears on the last day of December and June in each year, commencing June 30, 2022.

The June 30, 2022 interest payment will represent accrued interest for the period from the closing date to June 30, 2022. In addition, at any time following the closing date, the company may, at its option, redeem pro rata all or part of the convertible debentures, upon not less than 30 nor more than 60 days' prior written notice, at a redemption price which is equal to 105% of the principal amount thereof, plus any accrued and unpaid interest that would otherwise be payable to the holder up to the redemption date. The transaction is expected to close on or about May 15, 2022, or such other date as the company may determine.

The convertible debentures and the warrants comprising the units and any common shares issuable upon conversion or exercise thereof, as applicable, will be subject to a statutory hold period lasting four months and one day following the closing date. The company anticipates paying a cash commission to eligible finders equal to 6.0% of the gross proceeds of the private placement as well as issuing compensation warrants equal to 6.0% of the gross proceeds of the private placement divided by the CAD 0.30 conversion price for a period of 24 months after the closing date.