Matrix Asset Management Inc.
TSX : MTA

Matrix Asset Management Inc.

June 20, 2011 10:01 ET

Matrix Announces Proposed Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 20, 2011) - Matrix Asset Management Inc. ("Matrix" or the "Company") (TSX:MTA) announced today that the Company has engaged Industrial Alliance Securities Inc. and M Partners Inc. (the "Agents") on a "best efforts" basis as agents for a private placement of convertible debenture units raising gross proceeds of up to $5,000,000 (the "Offering"). The Offering consists of up to 5,000 debenture units (each a "Unit") at a price of $1,000 per Unit. Each Unit is comprised of a $1,000 convertible debenture (a "Debenture") and 345 share purchase warrants (the "Warrants"). Proceeds of the Offering will be used for general corporate purposes, as well as to support asset growth. The Units and each of the underlying securities attached thereto are subject to a four month hold period from the date of issue. None of the, Debentures or Warrants will be listed for trading on any exchange. Matrix will apply to list the common shares issuable pursuant to the Offering on the Toronto Stock Exchange (the "TSX") if and when issued and following expiry of the applicable four month hold period.

Terms of the Units

General

The Debentures will bear interest at a rate of 7.00% per annum and mature on or about June 30, 2016 (the "Maturity Date"), unless converted or redeemed prior to the Maturity Date. Interest on the Debentures is payable semi-annually on the last day of June and December of each year commencing on December 31, 2011. Each $1,000 principal amount Debenture will be convertible into 689.66 Matrix common shares at a price of $1.45 per share (the "Conversion Price") at the holders' option at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date fixed by Matrix for redemption of the Debentures. Each Warrant will entitle the holder to acquire one Matrix common share for a period of three years from the closing date of the Offering at a price of $1.75 per share. The Debentures and Warrants will contain standard adjustment provisions, including adjustments for consolidations and subdivisions. The Debentures will be unsecured and will rank subordinate in right of payment of principal and interest to all senior obligations of the Company.

Redemption of Debentures by the Company

The Debentures may be redeemed by the Company as follows:

  1. From and after June 30, 2014, Matrix may redeem the Debentures in whole or in part by paying the holder the principal amount of the redeemed Debentures plus accrued and unpaid interest, provided that the volume weighted average trading price of Matrix common shares on the TSX during the 20 consecutive trading days ending on the fifth trading day preceding the date on which notice of redemption is given is not less than 125% of the $1.45 Conversion Price.
  2. From and after June 30, 2013, Matrix may redeem all of the Debentures by paying the principal amount of the Debentures, plus accrued and unpaid interest, plus the following premiums on the principal amount:
  1. during the period from June 30, 2013 to June 30, 2014, a premium of 10%; and
  2. during the period after June 30, 2014, a premium of 15%.

Conversion of Debentures by the Company

From and after June 30, 2014, Matrix will have the right to convert the outstanding Debentures at the Conversion Price, provided that the closing price of Matrix common shares is $2.15 or more for a period of not less than 20 consecutive trading days beginning four months after closing.

Share Payment Option (partial)

On the Maturity Date or upon redemption by Matrix (other than at a premium), Matrix may elect to repay up to one-third of the principal amount of the Debentures by issuing that number of common shares obtained by dividing the principal amount of such Debentures by 95% of the volume weighted average trading price of the Matrix common shares for the 20 consecutive trading days ending five trading days prior to the redemption or maturity date, as the case may be (the "Share Payment Option") provided that the volume weighted average trading price of the Matrix common shares for the 20 consecutive trading days ending five trading days prior to the redemption or maturity date is not less than $1.45.

Broker Warrants

At the closing of the Offering, the Agents will receive a cash commission equal to 5% of the gross proceeds raised under the Offering. In addition, the Agents will receive non-transferrable warrants (the "Broker Warrants") in an amount equal to 5% of the total amount raised under the Offering, divided by $1.20. Each Broker Warrant will entitle the holder to acquire one Matrix common share for a period of two years following the closing date of the Offering at a price equal to the closing price of Matrix's common shares on the closing date of the Offering. The maximum number of common shares issuable under the Broker Warrants would be 208,333 common shares.

The closing of the Offering is subject to certain conditions, including but not limited to, the receipt of all necessary approvals, including the approval of the TSX. The Company may increase the Offering size based on market conditions and other factors. The Offering may close in one or more tranches.

This press release shall not constitute an offer to sell or solicitation of an offer to buy the securities in any jurisdiction.

About Matrix (www.matrixasset.ca)

Matrix (TSX:MTA) is a diversified asset and wealth management company with approximately $2.4 billion in assets under management and offices across Canada. The Company's mission is to provide a diverse array of investment choices and the best possible investment management service to Canadian investors and institutions. The Company delivers its services through three main operating subsidiaries serving institutional, high net worth, and retail investors.

Reference:

David Levi, Chief Executive Officer
2200 - 130 King Street
Toronto, Ontario M5X 1E3
416-934-7700

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements" under Canadian securities legislation. These statements are based on current beliefs and assumptions of management, however are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from the forward-looking statements in this news release, including but not limited to delays or uncertainties with regulatory or shareholder approvals and changes in the business environment that might impact the intended use of proceeds. For additional information with respect to certain of these beliefs, assumptions, risks and uncertainties, please refer the Matrix's Management's Discussion & Analysis for the interim period ended March 31, 2011 and annual information form for the year ended December 31, 2010 available on SEDAR at www.sedar.com.

Readers are cautioned not to place undue reliance on these forward-looking statements. Matrix does not undertake any obligation to revise or update any of these statements as a result of new information, future events or otherwise after the date hereof, except as required by securities laws.

Contact Information

  • Matrix Asset Management Inc.
    David Levi
    Chief Executive Officer
    416-934-7700
    www.matrixasset.ca