TORONTO, Aug. 30, 2021 /CNW/ - This press release is being issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issuers in connection with the filing of an Early Warning Report by Vortex ENA LP ("Vortex") as a result of Enablence Technologies Inc. (the "Issuer") calling a meeting of its shareholders to seek the requisite shareholder approvals to complete the Recapitalization Transaction (as defined below), which the Issuer announced on August 23, 2021.
Both Vortex and its joint actors (collectively, the "Acquirors") are participants in the recapitalization plan (the "Recapitalization Transaction") announced by the Issuer on August 23, 2021. The Recapitalization Plan is comprised of a restructuring of the Issuer's secured debt, a shares-for-debt settlement with certain unsecured creditors ("Shares-for-Debt Settlements"), a shares-for-services settlement with a service provider, a concurrent $11 million private placement of subscription receipts that will convert into units, each unit comprised of one post-consolidation Common Shares (as defined below) and one-fifth of a warrant (the "Private Placement"), and a share consolidation. A copy of the Issuer's press release describing the Recapitalization Transaction in more detail has been filed by the Issuer on SEDAR at www.sedar.com.
The Acquirors are among the creditors that are parties to Shares-for-Debt Settlements, who agreed to exchange 100% of the unsecured debts owed to them by the Issuer for common shares of the Issuer ("Common Share"), at a deemed price of $0.025 per Common Share being the closing price of the Common Shares on the TSX Venture Exchange on August 20, 2021 (the "Recap Price").
In connection with the Recapitalization Transaction, Vortex also agreed to make available to the Issuer approximately $3 million in additional short term promissory notes, subject to certain conditions, to provide interim financing and cover operating costs of the business prior to the closing date of the Recapitalization Transaction (the "Grid Note"). Any amounts owing on the Grid Note as of the closing date of the Recapitalization Transaction are expected to be converted to Common Shares at the Recap Price. Advances under the Grid Note are subject to the approval of Vortex, in its sole discretion, based on capital requests made by the Issuer.
As of the date hereof, the Acquirors have ownership and control over 25,003,101 Common Shares (which represents approximately 3.9% of the issued and outstanding Common Shares). If no funds are advanced under the Grid Note or such funds are not converted into Common Shares in connection with the Recapitalization Transaction, the Acquirors will have ownership and control of 270,627,976 Common Shares, which includes Common Shares received upon the conversion of additional unsecured debt of the Issuer acquired by Vortex after August 22, 2021 (which represents approximately 12.6% of the issued and outstanding Common Shares prior to completion of the Private Placement, assuming all of the remaining Shares-for-Debts Settlements provide for creditors exchanging 100% of their debt for Common Shares at the Recap Price, and approximately 9.7% of the issued and outstanding Common Shares following completion of a fully subscribed Private Placement).
If the full $3 million is advanced under the Grid Note and the entire amount is converted into Common Shares in connection with the Recapitalization Transaction, the Acquirors will have ownership and control of 390,627,976 Common Shares, which includes Common Shares received upon the conversion of additional unsecured debt of the Issuer acquired by Vortex after August 22, 2021 (which represents approximately 16.7% of the issued and outstanding Common Shares prior to completion of the Private Placement, assuming all of the remaining Shares-for-Debts Settlements provide for creditors exchanging 100% of their debt for Common Shares at the Recap Price, and approximately 14.1% of the issued and outstanding Common Shares following closing of a fully subscribed Private Placement).
The Acquirors are participating in the Recapitalization Transaction in the ordinary course of business and agreed to acquire Common Shares for investment purposes and not for the purpose of influencing the control or direction of the Issuer. Depending on various factors including, without limitation, the Issuer's financial position, the price levels of the Common Shares, conditions in the securities markets and general economic and industry conditions, the Issuer's business or financial condition and other factors and conditions the acquiror deems appropriate, the acquiror may increase or decrease its beneficial ownership of Common Shares or other securities of the Issuer whether in the open market, by privately negotiated agreement or otherwise.
The Issuer is located at 390 March Road, Ottawa, Ontario, K2K 0G7. Vortex is located at 95 Wellington Street West, Suite 2101, Toronto, Ontario M5J 2N7. A copy of the Early Warning Report can be obtained from Michael Roland (416.361.6047) or on the SEDAR profile of the Issuer at www.sedar.com.
SOURCE Vortex ENA LP
Michael Roland, 416.361.6047
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