MONTREAL, QUÉBEC--(Marketwired - Oct. 31, 2016) -
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") today announces that, further to its press release of October 27, 2016, it has completed the public offering of units in the amount of $5,458,000 on a bought deal basis (the "Bought Deal") with Echelon Wealth Partners Inc. acting as sole underwriter (the "Underwriter"), under the short form base shelf prospectus and prospectus supplement dated March 18, 2015 and October 27, 2016 respectively.
"The financing was heavily oversubscribed in very short order, which, we believe, is a clear recognition of the strong progress we are making with production at our High Purity Alumina Plant," stated Glenn Kelly, CEO of Orbite. "These funds provide important additional financial strength towards the execution of our commercial strategy, funding the ramp up of production to commercial levels, and building HPA inventory for subsequent sales to customers."
Each unit consists of $1,000 principal amount of 5% convertible unsecured unsubordinated debentures (the "Debentures") and 2,793 share purchase warrants (each a "Warrant") of the Company. The Debentures will mature on October 31, 2021 (the "Maturity Date") and will bear interest at a rate of 5% per annum payable semi-annually.
Each Debenture will be convertible, at the option of the holder, at any time prior to the Maturity Date, into that number of shares computed on the basis of (i) the principal amount of the Debentures divided by the conversion price of $0.358 per 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 from the date of conversion until the Maturity Date (the "Make-Whole Amount") divided by the five (5) day volume weighted average trading price of the shares on the TSX two (2) days prior to conversion (the "Current Market Price"). The Make-Whole Amount shall be reduced by 1% for each 1% that the Current Market Price at time of conversion exceeds the Conversion Price. Each Warrant will be exercisable into one share for a period of 36 months from their issue date at a price of $0.358 per share.
For its services, the Underwriter received a cash commission of $545,800 (equal to 10% of the gross proceeds raised under the Bought Deal), a work fee of $200,000 and 762,291 non-transferable broker warrants (equal to 5% of the shares into which the principal of the Debentures sold under the Bought Deal and Underwriter's Option are convertible). Each broker warrant is exercisable into one share for a period of 36 months at a price of $0.358 per share.
The aggregate number of shares to be issued upon conversion of the Debentures and for any payment of the Make-Whole Amount shall not exceed the number of shares equal to the principal amount of the Debentures divided by $0.358 less the 25% maximum discount allowable by the Toronto Stock Exchange. The units are qualified for sale by way of the Company's short form base shelf prospectus dated March 18, 2015 and prospectus supplement dated October 27, 2016.
The Company intends to use the net proceeds of the Bought Deal to finalize the materials handling section of the plant, which is materially complete, to fund the ramp up in production to commercial levels at the Company's High Purity Alumina ("HPA") Plant and to build HPA inventory for subsequent sales to customers.
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.