MONTREAL, QUÉBEC--(Marketwired - Jan. 26, 2017) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.
Orbite Technologies Inc. (TSX:ORT)(OTCQX:EORBF) ("Orbite" or the "Company") is pleased to announce that it has entered into a bought deal letter with Echelon Wealth Partners Inc. (the "Underwriter") under which the Underwriter has agreed to purchase on a bought deal basis 10,000 units of the Company (each, a "Unit") at a price of $1,000 per Unit for gross proceeds of $10,000,000 (the "Bought Offering").
The Company also granted the Underwriter an option (the "Underwriter's Option"), exercisable in whole or in part, at one or more additional closings, at any time within 30 days of the closing of the Bought Offering, to purchase up to an additional 1,500 Units for additional gross proceeds of up to $1,500,000, to cover over-allotments and for market stabilization purposes.
Prior to closing of the Offering, the Company may also enter into agreements with some of its key suppliers who may agree to receive Units as consideration for outstanding invoices (the "Units-for-Debt Offering") for up to $1,500,000. Any Units issued under the Units-for-Debt Offering will reduce the Underwriter's Option by an equivalent amount, such that the maximum amount of Units issuable under the Underwriter's Option and the Units-for-Debt Offering will not exceed 1,500 Units ($1,500,000) in the aggregate.
"Entering into an agreement for a bought deal financing is a strong signal of the market's confidence in Orbite's outlook as we ramp up towards commercial production at our high purity alumina production facility," stated Glenn Kelly, CEO of Orbite.
Each Unit consists of $1,000 principal amount of 5% convertible unsecured unsubordinated debentures (the "Debentures") and 3,125 share purchase warrants (each single share purchase warrant, a "Warrant") of the Company (which is equivalent to 100% of the number of class A Shares (the "Common Shares") into which the Debentures are convertible). The Debentures will mature five years from closing date of the Bought Offering (the "Maturity Date") and will bear interest at a rate of 5% per annum payable semi-annually in cash or shares, at the option of the Company. Each Debenture will be convertible, at the option of the holder at any time prior to the Maturity Date, into the number of Common Shares computed on the basis of (i) the principal amount of the Debentures divided by the conversion price of $0.32 per Common Share (the "Conversion Price"), and (ii) an amount equal to the additional interest amount that such holder would have received if it had held the Debenture until the Maturity Date (the "Make-Whole Amount") divided by the then 5-day volume weighted average trading price of the Common Shares on the Toronto Stock Exchange (the "Current Market Price") on the date falling two trading days prior to the date of the conversion. The aggregate number of Common Shares to be issued upon conversion of the Debentures and for any payment of the Make-Whole Amount in Common Shares shall not exceed the number of Common Shares equal to the principal amount of the Debentures divided by $0.32 less the 25% maximum discount allowable in accordance with the rules of the Toronto Stock Exchange. Each Warrant will be exercisable into one Common Share for a period of 36 months from their issue date at a price of $0.32 per Common Share. The Debentures will also be convertible at the option of the Company after the first anniversary date on the same basis, subject to certain conditions.
For its services, the Underwriter will receive a cash commission equal to 8% of the gross proceeds raised under the Bought Offering and under the Underwriter's Option and 4% on the sums settled under the Units-for-Debt Offering. The Underwriter will also receive that number of non-transferable warrants ("Broker Warrants") equal to 5% of the Common Shares into which the principal of the Debentures sold in the Bought Offering and the Underwriter's Option are convertible. Each Broker Warrant will be exercisable into one Common Share for a period of 36 months from the applicable closing of the Bought Offering at a price of $0.32 per Common Share.
The Bought Offering and the Units-for-Debt Offering are expected to close next week, and additional closings may follow thereafter in connection with the Underwriter's Option. The Bought Offering, the Underwriter's Option and the Units-for-Debt Offering are subject to conditions, including, without limitation, receipt of all regulatory approvals (including Toronto Stock Exchange approval). The Units, including any additional Units sold pursuant to the Underwriter's Option and those issued under the Units-for-Debt Offering will be qualified for sale by way of the Company's short form base shelf prospectus dated January 6, 2017 and prospectus supplement to be filed in Quebec, Ontario, Alberta and British Columbia no later than January 30, 2017.
The Company intends to use the net proceeds of the Bought Offering to pursue production ramp-up and commercialization of high purity alumina plant ("HPA") from its HPA plant, and for general corporate purposes. Sums (if any) raised pursuant to the Underwriter's Option are expected to be used for general corporate purposes.
For more information on this offering and to obtain a copy of the final base shelf prospectus and prospectus supplement contact your investment advisor or Echelon Wealth Partners Inc. at 416-479-7370 or 888-216-9779 x 207.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities offered in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Orbite Technologies Inc. is a Canadian cleantech company whose innovative and proprietary processes are expected to produce alumina and other high-value products, such as rare earth and rare metal oxides, at one of the lowest costs in the industry, and in a sustainable fashion, using feedstocks that include aluminous clay, kaolin, nepheline, bauxite, red mud, fly ash as well as serpentine residues from chrysotile processing sites. Orbite is currently in the process of finalizing its first commercial high-purity alumina (HPA) production plant in Cap-Chat, Québec and has completed the basic engineering for a proposed smelter-grade alumina (SGA) production plant, which would use clay mined from its Grande-Vallée deposit. The Company's portfolio contains 16 intellectual property families, including 45 patents and 71 pending patent applications in 11 different countries and regions. The first intellectual property family is patented in Canada, USA, Australia, China, Japan and Russia. The Company also operates a state of the art technology development center in Laval, Québec, where its technologies are developed and validated.
Certain information contained in this document may include "forward-looking information". Without limiting the foregoing, the information and any forward-looking information may include statements regarding projects, costs, objectives and future returns of the Company or hypotheses underlying these items. In this document, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or the Company management's good-faith beliefs with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company's control. These risks uncertainties and assumptions include, but are not limited to, those described in the section of the Management's Discussion and Analysis (MD&A) entitled "Risk and Uncertainties" as filed on March 30, 2016 on SEDAR, including those under the headings "Recent increase in budgeted capital costs will require additional financing and may adversely impact our prospects", "We will need to raise capital to continue our growth" and "Development Goals and Time Frames".
The Company does not intend, nor does it undertake, any obligation to update or revise any forward-looking information or statements contained in this document to reflect subsequent information, events or circumstances or otherwise, except as required by applicable laws.