GreenPower Motor, a manufacturer and distributor of all-electric, purpose-built, zero-emission medium and heavy-duty vehicles serving the cargo and delivery market, shuttle and transit space and school bus sector, closed the previously announced credit approval from CIBC for $5 million in financing facilities, comprised of a $3 million revolving line of credit and a $2 million term loan with a three-year term.
Two directors of the company have provided joint and several personal guarantees of up to $5 million in support of the CIBC financing facilities, and the company has granted the guarantors warrants and shares as an incentive for providing the personal guarantees. A portion of the net proceeds from the financings were used to repay and close the company’s existing operating line of credit, with the remainder used for general corporate purposes.
As a bonus for agreeing to provide the personal guarantees on behalf of the company, the company has agreed to issue 2,016,129 non-transferable share purchase warrants to one of the guarantors. Each warrant entitles the holder to purchase one common share of the company at an exercise price of $1.24 per share for a period of thirty-six (36) months. In addition, the company has agreed to issue to one of the guarantors an aggregate of 403,225 shares. The guarantors are each considered to be a “related party” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101) and the issuance of warrants and shares, as applicable, is considered to be a “related party transaction” within the meaning of MI 61-101 but each is exempt from the formal valuation requirement and minority approval requirements of MI 61-101 by virtue of the exemptions contained in Sections 5.5(g) and 5.7(e) of MI 61-101.
All securities issued to the guarantors will be subject to a statutory hold period of four months plus a day from the closing of the loan in accordance with applicable securities legislation.
