Robix Enters into Engagement Letters for Rights Offering and Debenture Private Placement; and Grants Options
LETHBRIDGE, ALBERTA–(Marketwired – April 4, 2017) – Robix Environmental Technologies, Inc. (“Robix” or the “Corporation”) (CSE:RZX) (FRANKFURT:R0X) announced today that it has entered into two engagement letters with Mackie Research Capital Corporation (“MRCC“) with respect to a proposed rights offering and private placement of debentures, as described below.
Robix announced that it has entered into an engagement letter with MRCC, pursuant to which Robix would offer rights (the “Rights Offering“), on a broker-led basis, to holders of its common shares (the “Common Shares“) of record as a date to be determined by Robix and MRCC (the “Record Date“). Pursuant to the Rights Offering, each holder of Common Shares (a “Shareholder“) would receive one transferable right (each, a “Right“) for each Common Share held as of the Record Date. The Rights, in an amount to be determined by the Corporation and MRCC, would entitle the holder thereof to subscribe for one unit of Robix (“Unit“), upon payment of the subscription price per Unit until 4:30 p.m. (Toronto time) on the expiry date. Each Unit will consist of one Common Share and one Common Share purchase warrant (“Warrant“), with each Warrant entitling the holder to purchase an additional Common Share until the date that is three years from the closing of the Rights Offering, at a price of $0.25 per Common Share for the period up to six months from the closing of the Rights Offering, and at a price of $0.50 per Common Share for the period following six months from the closing to the date that is three years from the closing of the Rights Offering. In addition, in the event that, at any time after the date that is six months following the closing of the Rights Offering, the closing price of the Common shares on the Canadian Securities Exchange is at least $0.75 for a minimum of 20 consecutive trading days (whether or not trading occurs on such days) (the “Triggering Event“), the Corporation may, in its sole discretion, provide written notice to the holder that the exercise period has been reduced to 30 days following delivery of such notice.
Pursuant to the Rights Offering, Robix intends to raise gross proceeds of a minimum of $1,000,000 and a maximum of $2,000,000. The subscription price to be paid to subscribe for one Unit under the Rights Offering will be determined by Robix and MRCC in the context of the market before Robix’s rights offering circular is filed. Shareholders who fully exercise their Rights will be entitled to subscribe for additional Units, if available, that were not subscribed for by other holders of Rights prior to the expiry time. Robix intends to use the net proceeds of the Rights Offering to fund further development on Robix’s technology and for general working capital purposes.
The Rights will be offered to Shareholders resident in each province and territory of Canada (the “Eligible Jurisdictions“). Accordingly, and subject to the detailed provisions of the circular, Rights certificates will not be mailed to Shareholders resident outside of the Eligible Jurisdictions.
Robix expects to receive stand-by commitments to subscribe for such number of Units offering under the Rights Offering that are not otherwise purchased in the amount of up to $875,000, $500,000 of which stand-by commitment has been agreed to by MRCC under the engagement letter. In connection with the Rights Offering, MRCC will be paid a corporate finance fee, a cash commission of 8% of the gross proceeds of the Rights Offering (excluding the amount purchased by MRCC under the stand-by commitment), plus options exercisable to purchase Units at an exercise price of $0.20 per Unit for a period of 24 months from the closing of the Rights Offering, in an amount equal to 25% of the aggregate number of Units issued for proceeds of up to $500,000, and equal to 10% of the remaining aggregate number of Units issued in the Rights Offering.
Further details of the Rights Offering will be announced by Robix and will be set out in the rights offering circular and the rights offering notice, which will be filed under the Corporation’s profile at www.sedar.com.
Robix also announced that it has entered into an engagement letter with MRCC, under which MRCC will act as Robix’s agent to use its best efforts to sell, on a private placement basis, senior secured non-convertible debentures (“Debentures“) in the principal amount of up to $6,000,000 (the “Debenture Offering“). The Debentures will bear interest at such rate to be determined in the context of the market and will mature on June 30, 2020. The Debentures may be redeemed by the Corporation prior to June 30, 2019 in the event of a change of control, and after June 30, 2019 on 30 days’ prior written notice, at a price equal to 104% of the principal amount of such Debenture, plus all accrued and unpaid interest. In addition, in the event of a change of control, the holders of the Debentures will have the right to require the Corporation to repurchase their Debentures at a price equal to 101% of the principal amount of such Debenture, plus all accrued and unpaid interest and if 90% of more of the principal amount of the Debentures have been tendered for repurchase, the Corporation will have the right to redeem all of the remaining Debentures at the same price.
In connection with the Debenture Offering, MRCC will be paid a cash commission of 5% of the gross proceeds of the Debenture Offering, plus warrants exercisable to purchase Common Shares at an exercise price to be determined between Robix and MRCC, for a period of 24 months from the closing date of the Debenture Offering, in an amount equal to 5% of the aggregate number of Debentures issued in the Debenture Offering.
The Debenture Offering is expected to close on or about April 30, 2017. For further details on the Debenture Offering, please contact the Corporation. All securities issued in connection with the Debenture Offering will be subject to a hold period of four months from the date of closing. The net proceeds from the Debenture Offering will be used for working capital and general corporate purposes.
Robix also announced today that the Corporation, subject to regulatory approval, has granted incentive stock options to purchase a total of 350,000 common shares, at an exercise price of $0.23 per common share, to consultants of Robix. The options expire on April 4, 2020, in accordance with the Corporation’s stock option plan.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in the United States or in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under securities laws of any such province, state or jurisdiction. The securities referenced herein may not be offered or sold in the United States except in transaction exempt from or not subject to the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.
Robix is focused on the worldwide market for oil containment, recovery and cleaning equipment specifically for the oil spill protection, oil production and water cleaning and purification industries. To that end, Robix has commercialized its C Series Clean Ocean Vessel and the P Series Stationary Platform; both are based on a patented revolutionary oil recovery technology. The C Series is a vessel that recovers oil in rough ocean waters, lakes, rivers and tailings ponds in virtually any conditions. The P Series is an oil recovery platform designed to accelerate oil recovery from settling ponds at production facilities. The Company also offers a suite of Hydro Cycle Water purification and cleaning products.
No stock exchange or any securities regulatory body has reviewed the contents of this news release.
Forward Looking Statements. This news release contains certain forward-looking information and statements within the meaning of applicable Canadian securities legislation. Certain statements contained in this news release may contain such words as “anticipate”, “could”, “Continue”, “should”, “seek”, “may”, “intend”, “likely”, “plan”, “estimate”, “believe”, “expect”, “will”, “objective”, “ongoing”, “project” and similar expressions are intended to identify forward-looking information or statements. In particular, this news release contains forward-looking statements regarding the Rights Offering, the Debenture Offering, the amount of funds to be raised pursuant to the Rights Offering and the Debenture Offering, the intended use of proceeds of the Rights Offering and the Debenture Offering, and expectations regarding the business, operations and revenue of the Corporation in addition to general economic conditions. Although the Corporation believes that the expectations and assumptions on which such forward-looking information and statements are based are reasonable, undue reliance should not be placed on the forward-looking information and statements because the Corporation can give no assurances that they will prove to be correct. Since forward-looking information and statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, competition, and uncertainties resulting from potential delays or changes in plans with respect to development projects or capital expenditures and changes in legislation, including but not limited to tax laws, royalties and environmental regulations, stock market volatility and inability to access sufficient capital from external and internal sources. Accordingly, readers should not place undue reliance on the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Corporation’s financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through SEDAR at www.sedar.com. The forward-looking information and statements contained in this news release are made as of the date hereof and the Corporation undertakes no obligation to update publicly or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
President & CEO
Robix Environmental Technologies, Inc.
Chief Financial Officer