Arrowhead Water Products Ltd.
TSX VENTURE : AWP.A

Arrowhead Water Products Ltd.

March 10, 2010 08:30 ET

Arrowhead Water Announces Closing Date for Private Placement, Operations Update and Rights Offering

CALGARY, ALBERTA--(Marketwire - March 10, 2010) - Arrowhead Water Products Ltd. ("Arrowhead" or the "Company") (TSX VENTURE:AWP.A) announces that, subject to final regulatory and TSX Venture Exchange ("TSXV") approval, it plans to close its previously announced private placement (the "Private Placement") of Units on or before Friday, March 26, 2010. The Company anticipates that $900,000 of Units will be subscribed for at a price of $0.025 per Unit. The Company also advises that it has agreed to assist certain senior management to participate in the Private Placement. The Company will provide loans to these individuals up to a collective total of $95,000, subject to applicable regulatory, TSXV and disinterested shareholder approvals. The loans will have a one year term, interest at prime plus 1% and be secured by promissory notes including a guarantee and a pledge of the acquired securities.

The Company also advises that historically it was experiencing financial difficulties which would prevent the Company from proceeding with its business plan to expand operations in Edmonton and Calgary, Alberta and to fund the expansion of the Company into British Columbia. In addition, the Company has been in the process of converting a number of its major retail accounts from the traditional 18.9 litre (5 gallon) bottles to the Company's new 15 litre bottle, which is a lighter, crushable, Bysphenol-A free and one way blue box disposable PET bottle. In order to expand its 15 litre business, the Company is operating a new SIAPI blow molding machine to make the 15 litre bottles at its Edmonton plant and plans to locate its second SIAPI machine in British Columbia. The proceeds from the Private Placement will be used to solidify the Company's balance sheet and assist in improving the mechanization of the Company's Edmonton plant, upgrade the fleet and retire the balance of obligations owing to major retailers for bottle deposits for the 18.9 litre bottles.

In conjunction with the Private Placement and so that existing shareholders will have an opportunity to participate in the offering, the Company also announces that it is proceeding with a Rights Offering Circular (the "Rights Offering") which will be made available to all holders of Class A Common Share ("Common Shares") of the Company residing in qualifying jurisdictions. Under the Rights Offering, the Company intends to issue each eligible shareholder one (1) right (the "Rights") for each Common Share held and four (4) Rights will be exercisable into one (1) Unit. Each Unit will be identical to the Units offered in the Private Placement with the Units issued at $0.025 per Unit and comprised of one (1) Common Share and one Common Share Purchase Warrant (the "Warrant"). Each Warrant entitles the holder to acquire one (1) Common Share of the Company at a price of $0.03 per share until expiry on March 31, 2011. The Company anticipates that the record date for the Rights Offering will be on or about April 5, 2010 and the Company anticipates that it will raise approximately $200,000 of additional funds in the Rights Offering. Also as a condition to the Rights Offering, the Company has agreed to obtain a covenant from the participants in the Private Placement that they will not exercise any Rights received under the Rights Offering. In addition, the underlying securities issued pursuant to the Rights in the Rights Offering will be subject to a contractual four month hold period.

The Company also announces that it plans to seek approval to consolidate the Common Shares of the Company on a one for five (1:5) basis at its next annual meeting of shareholders to be held in June, 2010. The Company further advises that the consolidation, which will be voted on by the shareholders at the annual meeting, is a condition of allowing the Company to price the Private Placement and Rights Offering at $0.025 per Unit.

About Arrowhead Water

Arrowhead Water is Canada's largest Canadian owned, publicly traded water company which is engaged in the production, sale and distribution of large format (15 and 18.9 litre) bottled drinking water. Arrowhead produces and delivers bottles of reverse osmosis, distilled and natural spring water to the Western Canadian retail and wholesale market. Arrowhead remains committed to continually improve its level of service to its customers and to provide positive returns to its shareholders.

READER ADVISORY

This press release may include forward-looking statements and assumptions respecting the Company's strategies, future operations, expected financial results, financial sources, commodity prices, costs of production and quantum of oil and natural gas reserves and discusses certain issues, risks and uncertainties that can be expected to impact on any of such matters. By their nature, forward-looking statements are subject to numerous risks and uncertainties that can significantly affect future results. Actual future results may differ materially from those assumed or described in such forward-looking statements as a result of the impact of issues, risks and uncertainties whether described herein or not, which the company may not be able to control. The reader is therefore cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any intention or obligation to update or revise these forward-looking statements, as a result of new information future events or otherwise.

Issued and Outstanding Shares: 30,832,530

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Arrowhead Water Products Ltd.
    Donald W. Wood
    President and Chief Executive Officer
    (403) 692-8259
    (403) 243-1485 (FAX)
    dwood@arrowheadwater.ca
    or
    Arrowhead Water Products Ltd.
    5730 Burbank Road SE
    Calgary, Alberta T2H 1Z4