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MONTREAL, Oct. 25 /CNW Telbec/ - Xebec Adsorption Inc. (TSX: XBC) ("Xebec"), a provider of biogas upgrading as well as natural gas and hydrogen purification solutions, announces today that it has received indications from investors towards a private placement to raise approximately $3.775 million (the "Offering") through the issuance of 9,437,500 share units (the "Units") at a price of $0.40 per Unit.
Private Placement
Each Unit to be issued under the Offering will consist of one common share (the "Common Shares") and one warrant (the "Warrants"). Each Warrant will entitle the holder thereof to purchase one additional Common Share from treasury at an exercise price of $0.45 for a period of 60 months from closing. The Warrants are subject to an accelerated expiry if, at any time after December 31, 2010, the published closing trade price of the Common Shares on the Toronto Stock Exchange ("TSX") is equal or superior to $0.75 for any 20 consecutive trading days, in which event Xebec may give the holder a written notice that the Warrants will expire at 5:00 p.m. (Toronto Time) on the 30th day from the receipt of such notice.
The private placement is being made on a best efforts basis by Laurentian Bank Securities Inc. and Canaccord Genuity Corp. The Units will be issued to accredited investors under an exemption from the prospectus requirements in the applicable provinces of Canada and on a private placement basis in certain jurisdictions outside of Canada. The agents will receive a commission relating to the Offering in the form of an aggregate of 600,000 Units representing, at $0.40 per Unit, 6.35% of the gross proceeds of the Offering to Xebec. As additional consideration, the Agents will be granted non-transferable options (the "Compensation Options") which in the aggregate shall entitle the Agents to purchase such number of Common Shares as is equal to 6% of the number of Units sold under the Offering at a price of $0.40 per Common Share in the eighteen month period following the date of closing of the Offering.
The Offering is expected to close on or about November 2, 2010. The proceeds will be used by Xebec for working capital and general corporate purposes.
The Units to be issued under the Offering are being offered at a price of $0.40 per Unit, which represents a discount of approximately 7.3% to the volume weighted average trading price of the Common Shares on the TSX for the five trading days immediately preceding the initial announcement of the Offering (October 18 to October 22, 2010). The Offering is conditional upon the approval of the TSX.
Special Situations Fund (the "Funds"), a group of funds advised by AWM Investment Company, Inc., is the current direct and indirect holders of 8,244,900 Common Shares representing approximately 23.5% of the 35,106,230 issued and outstanding Common Shares prior to the completion of the Offering and therefore is an insider of Xebec. The Funds have indicated an intention to purchase 2,500,000 Units pursuant to the Offering, which together with the Warrants underlying the Units represent 14.2% of the issued and outstanding Common Shares prior to completion of the Offering. Following completion of the Offering, the Funds will beneficially own, or exercise control or direction over, directly or indirectly, 10,744,900 Common Shares representing approximately 23.8% of the issued and outstanding Common Shares (on a non-diluted basis) and, assuming the exercise of all Warrants and Compensation Options issued under the Offering, 13,244,900 Common Shares, representing approximately 23.8% of the issued and outstanding Common Shares following completion of the Offering.
In addition, John Shakeshaft, a director of Xebec and therefore an insider of Xebec, has indicated an intention to subscribe for 50,000 Units for an aggregate subscription price of $20,000. Mr. Shakeshaft currently beneficially owns 51,600 Common Shares representing 0.15% of the issued and outstanding Common Shares prior to the completion of the Offering. Following completion of the Offering, Mr. Shakeshaft will beneficially own 101,600 Common Shares representing 0.23% of the issued and outstanding Common Shares following completion of the Offering. Following completion of the Offering and assuming the exercise of all Warrants and Compensation Options issued under the Offering, Mr. Shakeshaft will beneficially own 151,600 Common Shares representing 0.27% of the issued and outstanding Common Shares following completion of the Offering.
The number of Common Shares to be issued pursuant to the Offering will be in excess of 58.8% of the 35,106,230 Common Shares issued and outstanding prior to the completion of the Offering. Details of the same are set forth below:
Common Shares Issuable Pursuant to the Offering (including 600,000 Common Shares issuable to the Agents): 10,037,500 | |
Common Shares Issuable Pursuant to the Exercise of Warrants (including 600,000 Warrants issuable to the Agents): 10,037,500 | |
Common Shares Issuable Pursuant to the Exercise of the Compensation Options: 566,250 | |
Total: 20,641,250 | |
Percentage of the Offering over the issued and outstanding Common Shares prior to the completion of the Offering: 58.8% |
Given that: (a) the Offering will result in the issuance of a number of Common Shares greater than 25% of the issued and outstanding Common Shares prior to the completion of the Offering (on a non-diluted basis) and the Common Shares will be issued at a discount to market price; (b) the Funds will subscribe to Units which, including the Common Shares underlying the Units and the Common Shares issuable upon exercise of the Warrants, exceed 10% of the issued and outstanding Common Shares prior to completion of the Offering, on a non-diluted basis; and (c) the exercise price of the Compensation Options is less than the volume weighted average trading price of the Common Shares on the TSX for the five trading days immediately preceding the initial announcement of the Offering (October 18 to October 22, 2010), the Offering requires the approval of the shareholders of Xebec under the rules of the TSX. In accordance with Subsection 604(d) of the TSX Company Manual, Xebec intends to obtain such approval by way of written consent of a majority of Xebec's disinterested shareholders (representing more than 50% of its Common Shares, excluding the Common Shares held by insiders participating in the Offering).
Kurt Sorschak, a director, President and Chief Executive Officer of the Company, beneficially owns, or exercises control or direction over, 13,757,778 Common Shares (including 5,834,249 Common Shares held in escrow and subject to vesting criteria) representing approximately 39.2% of the issued and outstanding Common Shares of Xebec prior to the completion of the Offering. Following the completion of the Private Placement, the 13,757,778 Common Shares beneficially owned or controlled by Mr. Sorschak will represent approximately 30.5% of the issued and outstanding Common Shares of the Company. Following the completion of the Private Placement and assuming the exercise of all Warrants and Compensation Options issued under the Offering, the 13,757,778 beneficially owned or controlled by Mr. Sorschak will represent approximately 24.7% of the issued and outstanding Common Shares of the Company.
All of the securities issued pursuant to the Offering will be subject to a hold period expiring four months and a day after the closing date.
Cautionary Statement
This news release does not constitute an offer to sell, or the solicitation of an offer to buy, in the United States the securities referenced herein. Such securities have not been and will not be registered under the United States Securities Act of 1933 (the "U.S. Securities Act") or applicable state securities laws and may not be offered or sold in the United States absent registration or an exemption from the registration requirement under the U.S. Securities Act and applicable state securities laws.
About Xebec Adsorption Inc.
Xebec Adsorption Inc. is a global provider of clean energy solutions to corporations and governments looking to reduce their carbon footprints. With more than 1,300 customers worldwide, Xebec designs, engineers and manufactures innovative products that transform raw gases into marketable sources of clean energy. Xebec's strategy is focused on establishing leadership positions in markets where demand for biogas upgrading, natural gas dehydration and hydrogen purification is growing. Headquartered in Montreal (QC), Xebec is a global company with two state-of-the-art manufacturing facilities in Montreal and Shanghai, a R&D facility in Vancouver (BC) as well as a sales and distribution network in North America, Asia and Europe. Xebec (www.xebecinc.com) trades on the TSX under the symbol XBC.
Caution Concerning Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking" statements within the meaning of applicable securities laws. This forward looking information includes, but is not limited to, the expectations and/or claims of management of Xebec with respect to information regarding the business, operations and financial condition of Xebec. Forward-looking information contained in this press release involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Xebec or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This list is not exhaustive of the factors that may affect forward-looking information contained in this press release. When used in this press release, such statements use such words as "anticipate", "believe", "plan", "estimate", "expect", "intend", "may", "will" and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this presentation. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements.
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For further information:
Xebec Adsorption Inc.:
Kurt Sorschak
President and CEO
450-979-8701
[email protected]
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