NXA Inc.
TSX VENTURE : NXI

February 28, 2011 17:25 ET

NXA Inc. Announces Final Closing of Private Placement

TORONTO, ONTARIO--(Marketwire - Feb. 28, 2011) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

NXA INC. (TSX VENTURE:NXI) ("NXA" or the "Company") announced today that it has completed the second and final closing in respect of $366,000 of its previously announced brokered private placement offering (the "Offering") for aggregate gross proceeds from the first and second closings of $1,086,000. The Offering consisted of the sale of an aggregate of 366 Units at a price of $1,000 per Unit. Each Unit was comprised of one $1,000 principal amount 10% unsecured convertible debentures (the "Debentures") and 5,000 warrants (the "Warrants"). The Debentures will mature on the second anniversary of the applicable date of closing (the "Maturity Date") and are convertible at the holder's option into common shares of NXA (the "Common Shares") at any time prior to the Maturity Date at a conversion price of $0.10 per Common Share (the "Conversion Price"). In any event, the Debentures will automatically convert into Common Shares at the Conversion Price upon the consolidation by the Company of all of its Common Shares on the basis of one new Common Share for a minimum of every 10 old Common Shares (the "Consolidation"). Each Warrant entitles the holder to acquire one Common Share at any time up to the Maturity Date at an exercise price of $0.15 per Common Share.There will be no adjustment to the Conversion Price, the exercise price of the Warrants and the number of common shares to be received on exercise of the Warrants as a result of the Consolidation, but the Debentures and the Warrants will otherwise be subject to standard anti-dilution provisions.

In connection with the Offering, Wildlaw Capital Markets Inc. received a cash commission equal to 5% of the gross proceeds raised under the Offering in Ontario and compensation warrants (the "Agent's Warrants") to purchase such number of Common Shares as is equal to 5% of the aggregate number of Common Shares issuable upon conversion of the Debentures and exercise of the Warrants sold under the Offering in Ontario. Each Agent's Warrant will be exercisable at $0.10 per Common Share for a period of 24 months from the date of closing.

Insiders of the Company, consisting of certain officers and directors of the Company, participated for 20% of the Offering on the same terms as arm's length investors. The Company is eligible for exemptions to the formal valuation requirement under paragraph (b) of section 5.5 of National Instrument 61-101 ("NI61-101") since its securities are not listed on any of the stock exchanges set out in that section as well as from the majority of the minority shareholder approval requirement pursuant to paragraph (1)(b) of section 5.7 of NI61-101 since its securities are not listed on any of the stock exchanges set out in that section, the fair market value of securities to be received by related parties is not more than $2,500,000 and at least two thirds of the independent directors (in respect of the Offering) approved the transaction.The Offering closed within 21 days of the date of filing of a material change report in connection with the closing because the management of the Corporation determined it was reasonable and necessary in the circumstances.

The proceeds of the Offering will be used primarily for working capital and general corporate purposes. All of the securities issuable in connection with the Offering will be subject to a hold period expiring four months and one day after the applicable closing date of the Offering. 

The securities offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This release does not constitute an offer or sale of securities in the United States.

NXA INC.

NXA is listed on Tier 2 of the TSX Venture Exchange.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements, including the proposed use of proceeds of the offering. Actual developments may differ materially from those contemplated by these statements depending upon, among other things, the ability of the Company to use the funds. The forward looking statements contained in this press release represent the Company's views and expectations as of the date of this release and should not be relied upon as representing its views and expectations at any subsequent date.

Shares Outstanding: 70,151,003

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.

Contact Information

  • NXA Inc.
    Greg Borsk
    Chief Financial Officer
    (416) 214-3454