Aveda Transportation and Energy Services
TSX VENTURE : AVE

Aveda Transportation and Energy Services

February 09, 2017 19:39 ET

Aveda Transportation and Energy Services Announces Filing of Final Prospectus for Previously Announced Public Offering

CALGARY, ALBERTA--(Marketwired - Feb. 9, 2017) -

NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES

Aveda Transportation and Energy Services Inc. ("Aveda" or the "Company") (TSX VENTURE:AVE), a leading provider of oilfield hauling services and equipment rentals to the energy industry, is pleased to announce that it has filed its final prospectus with, and obtained receipts in respect thereof from, the securities regulatory authorities of Alberta, British Columbia, Manitoba and Ontario (the "Offering Jurisdictions") in connection with the offering of common shares in the capital of the Company ("Common Shares") to raise gross proceeds of a minimum of $20,000,400 and a maximum of $25,000,200 at a price of $0.60 per Common Share (the "Offering").

The Company has entered into an agency agreement with a syndicate of agents co-led by Beacon Securities Limited and Canaccord Genuity Corp., and including PI Financial Corp. and Mackie Research Capital Corporation (collectively the "Agents"), pursuant to which the Agents will offer the Common Shares for sale in the Offering Jurisdictions on a commercially reasonable best efforts basis. The Company has also granted to the Agents an option to offer and sell up to an additional 15% of the number of Offered Shares sold under the Offering at a price of $0.60 per Common Share on the same terms and conditions as the Offering, exercisable at any time, in whole or in part, until the date that is 30 days after the Closing Date (as defined below) for the purpose of covering over-allotments, if any, and for market stabilization purposes.

The Agents will receive a fee (the "Agents' Fee") equal to: (i) 6.0% of the gross proceeds of the Offering; plus (ii) an additional cash fee of $100,000, which fee shall be paid upon closing of the Offering. In addition, the Company has agreed to grant to the Agents, on the completion of the Offering, as additional compensation, non-transferrable Common Share purchase options (the "Compensation Options") entitling the Agents to purchase such number of Common Shares (the "Option Shares") equal to 3% of the total number of Common Shares sold pursuant to the Offering, excluding Common Shares that are sold to Werklund Capital Corporation and Werklund Ventures Ltd. (collectively "WCC") and subscribers on the Company's president's list. Each Compensation Option will entitle the holder to acquire one Option Share at an exercise price of $0.66 per Option Share for a period of eighteen (18) months from the Closing Date.

The net proceeds of the Offering will be used to reduce indebtedness and for general working capital purposes. The Offering is expected to close on or about February 22, 2017 (the "Closing Date") and is subject to customary closing conditions, including obtaining the approval of the TSX Venture Exchange (the "Exchange").

WCC, Aveda's largest shareholders holding approximately 40% of the Company, have committed to subscribe for up to $5,000,000 of the Offering on the same terms and conditions as public investors. Senior executives of the Company are also anticipated to participate in the Offering.

The participation of WCC in the Offering is subject to final approval by the Exchange. In addition, because WCC and the Company are related parties (within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") and pursuant to the policies of the Exchange) the participation of WCC in the Offering is a related party transaction (within the meaning of MI 61-101 and pursuant to the policies of the Exchange), and the Company is required to obtain a formal valuation and obtain minority approval of shareholders, to complete a related party transaction, in the absence of exemptions therefore. The Company is exempt from the formal valuation requirement pursuant to section 5.5(b) of MI 61-101. With respect to the minority approval requirement, there is no exemption available to the Company for the proposed participation of WCC as described above. Because holding a shareholders' meeting is costly and time consuming, the Company has applied to the Ontario Securities Commission (the "OSC") for exemptive relief under section 9.1 of MI 61-101 (A) from the requirements of section 5.3(2) of MI 61-101 to (i) call a meeting of its shareholders to consider WCC's participation in the Offering, (ii) send an information circular to its shareholders in connection with such meeting, and (iii) obtain disinterested minority approval of WCC's participation in the Offering at such meeting; and (B) to instead be permitted to obtain the disinterested minority approval required for WCC's participation in the Offering by section 5.6 of MI 61-101 by way of written consent.

On February 1, 2017, the Company filed on SEDAR a disclosure document so that minority shareholders can be well informed to provide their consent. Such disclosure document shall be provided to every shareholder that provides their consent and is accessible at www.sedar.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Common Shares under the Offering in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Common Shares offered under the Offering have not been and will not be registered under the United States Securities Act of 1933 and accordingly will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of, a U.S. person, except pursuant to applicable exemptions from the registration requirements.

About Aveda Transportation and Energy Services

Aveda provides specialized transportation services and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States of America principally in and around the states of Texas, Oklahoma, Pennsylvania, Wyoming and North Dakota. Transportation services include both the equipment necessary to move the load as well as a trained, professional driver capable of securing, moving and manipulating the load at its origin and destination. Aveda's rental operations include the rental of well-sites, tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.

Aveda was incorporated in 1994 as a private company to serve the oil and gas industry. In the spring of 2006 the Company went public on the TSX Venture Exchange. Aveda has major operations in Calgary, AB, Leduc, AB, Edson, AB, Pleasanton, TX, Midland, TX, Pecos, TX, Marshall, TX, Williamsport, PA, Casper, WY, Williston, ND, and Oklahoma City, OK. Aveda is publicly traded on the TSX Venture Exchange under the symbol AVE. For more information on Aveda please visit www.avedaenergy.com.

This News Release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should", "potential" or similar words, including negatives thereof, suggesting future outcomes. In particular, this News Release contains forward-looking statements relating to: the Offering and its pricing, timing and WCC's participation therein; demand for the Company's services and general industry activity level; the Company's growth opportunities; and expectations regarding the Company's revenue. Aveda believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this News Release in connection with the forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:

• a receipt of all applicable approvals to close the Offering;
• the performance of Aveda's businesses, including current business and economic trends;
• oil and natural gas commodity prices and production levels;
• capital expenditure programs and other expenditures by Aveda and its customers;
• the ability of Aveda to retain and hire qualified personnel;
• the ability of Aveda to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities;
• the ability of Aveda to maintain good working relationships with key suppliers;
• the ability of Aveda to market its services successfully to existing and new customers;
• the ability of Aveda to obtain timely financing on acceptable terms;
• currency exchange and interest rates;
• risks associated with foreign operations;
• changes under governmental regulatory regimes and tax, environmental and other laws in Canada and the United States; and
• a stable competitive environment.

The forward-looking statements regarding Aveda's potential revenue are included herein to provide readers with an understanding of Aveda's anticipated cash flow and Aveda's ability to fund its expenditures based on the assumptions described herein. Readers are cautioned that this information may not be appropriate for other purposes.

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, approvals from the Exchange, the OSC and minority shareholders in connection with the Offering, the risks identified in Aveda's annual information form and management discussion and analysis for the year ended December 31, 2015 (the "MD&A"), which are available for viewing on SEDAR at www.sedar.com. Any forward-looking statements are made as of the date hereof and, except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

Neither 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.

NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA), OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

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