Quarterhill Repays CAD$57.5 Million Convertible Debentures at Maturity

Quarterhill Inc. (QTRH.TO ) said in an October 30, 2026 announcement that it has repaid in full the CAD$57.5 million aggregate principal amount of its 6.0% convertible unsecured subordinated debentures, together with all accrued and unpaid interest, on their maturity date of October 30, 2026.

The debentures traded on the Toronto Stock Exchange under the symbol QTRH.DB (CUSIP 747713AA3) and will be delisted effective at the close of markets on October 30, 2026, the company said. Payment was processed through Computershare Trust Company of Canada, as debenture trustee. The announcement did not identify the source of the funds used to make the payment.

The company describes itself as a provider of AI-driven Intelligent Transportation System solutions.

Terms of the 2021 Debenture Offering

The repaid debentures originated in a financing Quarterhill announced on October 20, 2021, when it entered into a CAD$50 million bought-deal agreement with a syndicate of underwriters led by Raymond James Ltd. The debentures carried a coupon of 6.0% per annum and a conversion price of CAD$3.80 per common share, subject to adjustment in certain circumstances, and were set to mature on October 30, 2026. Quarterhill granted the underwriters an over-allotment option to purchase up to an additional CAD$7.5 million aggregate principal amount of debentures on the same terms, exercisable in whole or in part at any time up to the 30th day following the closing of the financing.

Under the original terms, the debentures were not redeemable at the company’s option before October 31, 2024, except in certain circumstances involving a change of control. On or after October 31, 2024 and prior to October 31, 2025, they could be redeemed in whole or in part on not more than 60 days’ and not less than 30 days’ notice, at a price equal to the principal amount plus accrued and unpaid interest, provided the volume-weighted average trading price of the common shares on the Toronto Stock Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the notice date was not less than 125% of the conversion price. On or after October 31, 2025 and prior to the maturity date, they could be redeemed in whole or in part on the same notice period at a price equal to their principal amount plus accrued and unpaid interest.

The debentures were offered by way of a prospectus supplement in all provinces and territories of Canada except Quebec, and could also be offered by way of private placement in the United States.

Quarterhill completed the offering on October 27, 2021, at a price of CAD$1,000 per debenture for total gross proceeds of CAD$57,500,000, including the full exercise of the over-allotment option by the underwriters. The syndicate included Raymond James Ltd., Canaccord Genuity (CF.TO ) Corp., CIBC World Markets Inc., Cormark Securities Inc., ATB Capital Markets Inc., M Partners Inc. and Stifel Nicolaus Canada Inc. Quarterhill said at the time that the net proceeds would support its growth through potential acquisitions and provide additional working capital to support the continued operations of its business.

2026 Credit Facility and Equity Financing

On May 12, 2026, Quarterhill announced a US$60 million senior secured credit facility with U.S. Private Credit Investments (PCI), a division of BTG Pactual Global Alternatives. The financing consisted of a $30 million initial term loan, a $25 million delayed draw term loan and a $5 million revolving credit facility, all denominated in U.S. dollars, with a maturity date of May 12, 2031. The facilities are secured by certain assets of Quarterhill, and the company is subject to customary financial and non-financial covenants under the agreement. Quarterhill stated that proceeds from the facilities would be used to repay obligations under its existing credit agreement, redeem the convertible debentures, pay transaction fees and expenses, and provide working capital. The company also established an incremental $100 million uncommitted accordion, subject to lender agreement and satisfaction of customary conditions, which it said was designed to fund inorganic growth initiatives and allow it to act quickly on acquisition opportunities.

Chief Executive Officer Chuck Myers said the agreement reflected “the successful execution of a deliberate plan to reposition this company for sustained growth.” Thomas Steiglehner, Head of U.S. Private Credit Investments at BTG Pactual Global Alternatives, said the firm was excited to provide “a flexible, long-term source of capital to support its growth strategy.” ATB Cormark Capital Markets and Roth Canada acted as exclusive advisors in connection with the arrangement of the credit facility.

On September 16, 2026, Quarterhill closed a bought-deal private placement of 20,867,100 common shares at CAD$2.48 per share, for aggregate gross proceeds of CAD$51,750,408. ATB Cormark Capital Markets and Roth Canada, Inc. acted as co-lead underwriters, on their own behalf and on behalf of a syndicate of underwriters. The company stated that it intended to use the net proceeds for general corporate purposes, working capital, repayment of debt obligations, and to fund growth initiatives including future acquisitions.

Insiders of the company subscribed for a total of 806,500 of the offered shares, for aggregate gross proceeds of CAD$2,000,120. The insider participation constituted a related-party transaction under Multilateral Instrument 61-101, and Quarterhill relied on exemptions from the instrument’s formal valuation and minority shareholder approval requirements, as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved the interested parties, exceeded 25% of the company’s market capitalization. All shares issued under the placement are subject to a statutory hold period in Canada expiring four months and one day from closing.