Rivalry Corp. has concluded its strategic review after securing a non-brokered private placement and a new debt settlement agreement.

The company is undertaking a non-brokered private placement of up to 110,400,000 units at a subscription price of C$0.05 per unit, for aggregate gross proceeds of up to C$5.52 million.

As part of this, Rivalry has entered into a binding subscription agreement with a strategic family office, which has agreed to purchase 82,758,620 units for gross proceeds to the company of C$4.14 million.

The private placement is expected to close in one or more tranches, with the first tranche expected to close on or around 8 October, subject to certain conditions, including the approval of the TSX Venture Exchange. 

Rivalry intends to use the proceeds from the private placement for corporate development and general working capital purposes.

The operator has also entered into a debt settlement agreement with the company’s senior lender to restructure its indebtedness, comprising the senior secured convertible debenture issued in November 2023 in the principal amount of C$14.0 million, and certain unsecured promissory notes of US$3.07 million that mature today (30 September).

The parties have agreed to satisfy C$12.5 million of debt owed by the company to the senior lender through the issuance of 250,527,697 units, at the offering price of C$0.05 per unit.

Following completion, C$8.48 million will remain outstanding under the secured debenture. 

As a result of the debt restructuring, which is also expected to close on or around 8 October, the senior lender will become a “control person” of the company, subject to shareholder approval.

Rivalry expects to obtain this shareholder approval by written consent executed by holders of more than 50 per cent of the voting rights of the company.

“This marks the conclusion of a thorough strategic review and the start of Rivalry’s next chapter,” said Rivalry co-founder and CEO Steven Salz. “With this financing and debt restructuring, Rivalry emerges stronger and better capitalized, having eliminated significant debt, secured funding for near-term priorities, and aligned our largest stakeholder with shareholders, positioning the company to focus on growth and sustained value creation.”

Shares in Rivalry Corp. (CVE:RVLY) fell by 30 per cent to close at C$0.035 per share in Toronto following the announcement Monday.