Synodon Inc.
TSX VENTURE : SYD

Synodon Inc.

August 13, 2015 09:00 ET

Synodon Sets Rights Offering Record Date

EDMONTON, ALBERTA--(Marketwired - Aug. 13, 2015) -

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Synodon Inc. ("Synodon" or the "Company") (TSX VENTURE:SYD) is pleased to announce that, further to its earlier news release, it has now filed a final short form prospectus in each of the provinces of Canada relating to a rights offering (the "Rights Offering") to subscribe for Class A voting shares of Synodon (the "Common Shares") for gross proceeds of up to approximately CDN $4.21 million. The Company has also concurrently filed a registration statement on Form F-7 with the Securities and Exchange Commission in the United States relating to the Rights Offering.

Synodon has set August 26, 2015 (the "Record Date") as the record date for the Rights Offering for the holders of Common Shares. Pursuant to the Rights Offering, each holder of Common Shares on the Record Date will receive one transferable right (a "Right") for every Common Share held. Each one (1) Right will entitle the holder to purchase one (1) Common Share at a price of $0.05 until the Rights expire at 4 p.m. (Edmonton time) on September 22, 2015 (the "Expiry Date"). The Rights Offering will include an additional subscription privilege under which holders of Rights who fully exercise their Rights will be entitled to subscribe for additional Common Shares, if available, that were not otherwise subscribed for under the Rights Offering. There is no standby guarantee.

The Common Shares are expected to commence trading on the TSXV on an ex-rights basis at the opening of business on August 24, 2015. This means that Common Shares purchased on or following August 24, 2015 will not be entitled to receive Rights under the Rights Offering. At that time, the Rights are expected to be posted for trading on a "when issued" basis on the TSXV under the symbol "SYD.RT". Trading of the Rights is expected to continue until 10:00 a.m. (Edmonton time) on the Expiry Date.

As a result of the Rights Offering, a maximum of approximately 84,347,033 Common Shares will be issued pursuant to the Rights Offering for gross aggregate proceeds of approximately $4.21 million. Mr. Paul van Eeden, who is currently a director and the Executive Chairman of Synodon, is also the President and Chief Executive Officer of (and exercises control and direction over) Cranberry Capital Inc. ("Cranberry"), a private investment company, that beneficially owns 18,466,262 Common Shares, representing 21.9% of the issued and outstanding Common Shares on a non-diluted basis. Mr. van Eeden also holds options to acquire 200,000 Common Shares. Mr. van Eeden has indicated his present intention to the Board of Directors of Synodon to exercise his basic subscription privilege and to possibly exercise his additional subscription privilege. As a result, if no other holder of Rights exercises their basic subscription privilege or additional subscription privilege, following the closing of the Rights Offering, Mr. van Eeden could own, directly or indirectly, up to 102,813,295 Common Shares representing up to approximately 60.9% of the issued and outstanding Common Shares on a non-diluted basis, plus options to acquire 200,000 Common Shares, which if exercised, would bring the Mr. van Eeden's ownership interest in the Company to 59.5% on a fully-diluted basis. Cranberry has provided a $3 million bridge loan facility (the "Bridge Loan") to the Corporation which matures on March 31, 2016 and is secured by all of the assets of the Corporation. The Bridge Loan contemplated that all of the net proceeds from the Rights Offering would be used to pay down the Bridge Loan. However, pursuant to an amending agreement to the Bridge Loan, subject to the closing of the Rights Offering, Cranberry and the Corporation have agreed to extend the maturity date by two years until March 31, 2018, reduce the annual interest rate from 12% to 6% and also amend the use of proceeds of the Rights Offering such that the Corporation can use the net proceeds for general working capital as opposed to having to pay down the Bridge Loan.

The final short form rights offering prospectus, together with rights certificates, will be mailed to eligible holders of Common Shares as soon as possible following the Record Date. Registered shareholders wishing to exercise their rights must forward the completed rights certificates along with the applicable funds to the subscription agent for the Rights Offering, Computershare Trust Company of Canada (the "Subscription Agent"), by the Expiry Date. Shareholders who own their Common Shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.

The Rights Offering will be made in all provinces of Canada, in all states of the United States of America except for Ohio, and in such other jurisdictions where the Company is eligible to make such offering (the "Qualifying Jurisdictions"). Rights certificates will not be issued and forwarded by the Company to holders of Common Shares not resident in the Qualifying Jurisdictions. Instead, Rights otherwise issuable to such holders will be issued to and held by the Subscription Agent, which will use its best efforts to sell the Rights on behalf of all such holders prior to the Expiry Date and then forward the net proceeds pro rata to such holders.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities, in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction.

Synodon Inc. (www.synodon.com) is a technology company that has developed an advanced airborne remote gas sensing system called realSens™, based on technologies developed under the Canadian Space Program and by Synodon scientists. The company currently provides advanced airborne pipeline integrity management services to the oil and gas sector through a suite of services including natural gas and liquid hydrocarbon leak detection, pipeline threat assessments, and waterway crossings analysis among others.

Forward-Looking Statements

This press release includes forward-looking statements about Synodon Inc., including the anticipated funds to be raised by the Rights Offering and the expected use thereof and benefits therefrom and the listing of the Rights on the TSXV and timing thereof. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as 'expects', 'anticipates', 'intends', 'plans', 'believes' or negative versions thereof and similar expressions.

Forward-looking statements reflect our current beliefs and are based on information currently available to us and on assumptions that we believe are reasonable. These assumptions include, but are not limited to, the completion of the Rights Offering and the ability to obtain regulatory (including TSXV) approval in a timely fashion. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements as they are subject to a number of significant risks and uncertainties which can be beyond our control. These include, but are not limited to, general economic conditions in the countries that we are pursuing contracts in, currency fluctuations and other changes in the competitive environment that Synodon operates in. For more information, please see the discussion on the principal risks that could affect our results under the section "Risks Relating to Our Business" of Synodon's 2014 MD&A and "Risk Factors" in the final short form prospectus. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Forward-looking statements in this press release are made to describe management's expectations and assist shareholders in understanding our financial position. Readers are cautioned that the forward-looking statements presented in this press release may not be appropriate for other purposes. We are under no obligation (and expressly disclaim any obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise unless specifically required by applicable securities legislation.

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