NXA Inc.
TSX VENTURE : NXI

December 16, 2010 18:31 ET

NXA Inc. Announces Initial Closing and Increase in Size of Private Placement

TORONTO, ONTARIO--(Marketwire - Dec. 16, 2010) -  

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 issued and sold an aggregate of 720 units (the "Units") at a price of $1,000 per Unit, for aggregate gross proceeds to the Company of $720,000 pursuant to the Company's previously announced private placement (the "Offering"). 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 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 of the Offering and 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. Each Agent's Warrant will be exercisable at $0.10 per Common Share for a period of 24 months from the date of closing.

The Company also announced today that it has received conditional approval from the TSX Venture Exchange to issue and sell up to an additional 200 Units pursuant to the Offering, for additional gross proceeds of up to $200,000, on the same terms and conditions as described above. Any additional securities to be issued pursuant to the Offering will be issued and sold by the Company no later than January 31, 2011. 

The proceeds of the Offering will be used primarily for working capital and general corporate purposes. Completion of the financing is subject to receipt of all required regulatory and TSX Venture Exchange approvals. 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 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 regarding a proposed offering, 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 raise the funds and decisions made by regulators. 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