Ivanhoe Industries, LLC

Ivanhoe Industries, LLC

November 18, 2016 19:38 ET

Ivanhoe Industries, LLC: Early Warning Report Filed Pursuant to Canada's National Instrument 62-103

NEW YORK, NEW YORK--(Marketwired - Nov. 18, 2016) - This news release is issued by Ivanhoe Industries, LLC ("Ivanhoe Industries"), pursuant to the early warning requirements of Canada's National Instrument 62-103 with respect to common shares of Kaizen Discovery Inc. ("Kaizen").

On November 9, 2016, Kaizen and Ivanhoe Industries' affiliate, HPX TechCo Inc. ("HPX") entered into a standby commitment agreement (the "Standby Agreement"), whereby HPX agreed that it will exercise its basic subscription privilege in Kaizen's proposed right offering transaction ("Rights Offering") (see Kaizen's news release of November 10, 2016) to maintain its pro rata equity interest in Kaizen. In addition, if less than the maximum number of Kaizen common shares ("Kaizen Shares") that may be issued under the Rights Offering are subscribed for by other Kaizen shareholders, HPX will subscribe for and purchase such number of Kaizen Shares that the maximum number of Kaizen Shares that may be issued under the Rights Offering will have been issued.

If all Kaizen shareholders, including HPX, exercise their basic subscription privilege, HPX's pre-Rights Offering ownership of approximately 66.82% of Kaizen Shares will be unaffected by the Rights Offering. If no other Kaizen shareholders exercise their basic subscription privilege, HPX will be obligated to purchase 69,191,659 Kaizen Shares, resulting in HPX owning approximately 75.11% of the then outstanding Kaizen Shares.

As consideration for HPX entering into the Standby Agreement, Kaizen (i) will issue 2,100,000 non-transferable warrants to HPX at the closing of the Rights Offering, with each warrant entitling HPX to acquire one (1) Kaizen Share at an exercise price per Kaizen Share of C$0.155 at any time on or before January 11, 2022, and (ii) agreed to terminate a revolving US$5 million credit facility (the "Loan") that HPX had previously extended to Kaizen. As of the date of the Standby Agreement, there were no amounts outstanding under the Loan.

All of the securities described in this release as owned by, or to be subscribed by HPX are, and will be, beneficially owned and controlled by Ivanhoe Industries.

Ivanhoe Industries, through HPX, is acquiring these shares for investment purposes. Depending on economic or market conditions or matters relating to Kaizen, Ivanhoe Industries or HPX may choose to either acquire or dispose of additional Kaizen common shares.

For further information and to obtain a copy of the early warning report filed under applicable Canadian provincial securities legislation in connection with the transactions hereunder please go to the Kaizen's profile on SEDAR website at www.sedar.com

Contact Information

  • Ivanhoe Industries, LLC
    Penny Schattenkirk
    (604) 689-8765