Xylitol Canada Inc. (TSXV:XYL) announced private placement of convertible debentures for gross proceeds of CAD 3,000,000 on February 8, 2016. The debenture carries a coupon of 10% and would mature in three years from date of issuance. The debenture is convertible into common shares at an exercise price of CAD 0.10 per share.

The company shall issue warrants equal to 20% of the aggregate number of common shares upon the conversion at an exercise price of CAD 0.15 per share for a period of three years from the date of closing. The debentures shall automatically converted into common shares upon occurrence of common shares closing at a trading price at or above CAD 0.20 for a period of twenty consecutive trading days at the option of the company, provided that the trading price of the common shares at the time of conversion is greater than the conversion price of the debentures or if the company is required to convert by any regulatory authority. The company shall redeem debentures, in whole or in part at any time prior to the maturity date at 110% of the principal amount by providing prior notice of not more than 60 days and not less than 30 days.

The securities issued are subject to hold period of four months and one day from date of closing. The transaction is subject to approval of TSX Venture Exchange. The company may pay finder's fee and commission to eligible arm's length third parties.

The transaction is expected to close on or around March 15, 2016.