Arrowhead Water Products Ltd.
TSX VENTURE : AWP.A

Arrowhead Water Products Ltd.

March 31, 2010 19:34 ET

Arrowhead Water Sets Record Date for Rights Offering

CALGARY, ALBERTA--(Marketwire - March 31, 2010) - Arrowhead Water Products Ltd. ("Arrowhead" or the "Company") (TSX VENTURE:AWP.A) is pleased to announce that it is proceeding with its previously announced rights offering to shareholders of Arrowhead ("Rights Offering") resident in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario and Nova Scotia (the "Qualifying Jurisdictions"). Pursuant to the terms of the Rights Offering, shareholders of the Company residing in the Qualifying Jurisdictions as at April 14, 2010 (the "Record Date") will be granted rights (the "Rights") evidenced by transferable Rights certificates to purchase up to 16,708,133 units of the Company ("Units"). A holder of Class A Common Shares (the "Common Shares") as at the Record Date will be entitled to one (1) Right per Common Share held and four (4) Rights will entitle the holder thereof to purchase one (1) Unit at $0.025 per Unit. Each Unit is comprised of one (1) Common Share and one (1) purchase warrant ("Warrant") to acquire one (1) Common Share at the exercise price of $0.03 per Common Share until expiry on March 31, 2011.There is no standby commitment or additional subscription privilege. Details of the Rights Offering are described in the Rights Offering Circular to be mailed to shareholders in connection with the Rights Offering.

The Company has received conditional approval from the TSX Venture Exchange Inc. (the "Exchange") for posting and listing the Rights and the Common Shares issuable thereunder, subject to the Company satisfying certain conditions pursuant to the policies of the Exchange. The Rights expire at 4:00 p.m. (Calgary time) on May 6, 2010 (the "Expiry Date").

Pursuant to the Exchange Bulletin dated March 31, 2010, the Common Shares are expected to commence trading on the Exchange on an ex-rights basis at the opening of business on April 12, 2010. This means that Common Shares purchased on or following April 12, 2010 will not be entitled to receive Rights under the Rights Offering. At that time, the Rights are expected to be posted for trading on a "when issued" basis on the Exchange under the symbol "AWA.RT". Trading of the Rights is expected to continue until 10:00 a.m. (Calgary time) on the Expiry Date.

Pursuant to the requirements under applicable securities legislation, a Rights Offering Circular dated March 30, 2010 has been accepted for filing by the securities regulatory authorities in the Qualifying Jurisdictions. The Rights Offering Circular and related materials will be delivered to all shareholders of the Company as of the Record Date. Rights certificates will not be issued or delivered to registered shareholders who are residents of jurisdictions other than the Qualifying Jurisdictions ("Non-Qualified Shareholders"). Olympia Trust Company will use its best efforts to sell the Rights evidenced by such Rights certificates on behalf of all such respective holders prior to the Expiry Date. The net proceeds (less any applicable withholding tax) of such sale will be paid to such holders on a pro rata basis after the Expiry Date.

Subscribers pursuant to Arrowhead's unit private placement, which closed on March 26, 2010 (the "Private Placement"), have agreed not to exercise the Rights issued to them in relation to the securities purchased pursuant to the Private Placement. In addition, the underlying securities issued pursuant to the Rights in the Rights Offering will be subject to a contractual four month hold period.

If all of the Rights are exercised, Arrowhead will receive gross proceeds of $417,703. The completion of the Rights Offering is not conditional upon Arrowhead receiving any minimum amount of subscriptions from shareholders. The proceeds of the Rights Offering will be used by the Company to upgrade the Company's bottling facilities in Edmonton and Calgary, Alberta with new robotic equipment and software. The funds will also be used to fund the expansion of the Company's 15-litre retail business into British Columbia in order to service the Company's retail accounts there. The British Columbia expansion will also involve the purchase of additional bottling equipment and the relocating of the Company's second SIAPI blow molding machine from Alberta to British Columbia. Additional funds will also be applied to upgrade the Company's fleet in Alberta and retire the balance of obligations owing to major retailers for bottle deposits for the 18.9-litre bottles.

Completion of the Rights Offering is subject to receiving all necessary regulatory and Exchange approvals.

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: 66,832,530

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