Not for distribution in the united states or for distribution with united states
NanoXplore Inc. (“NanoXplore” or the “Corporation”) (TSX-V: GRA) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by National Bank Financial Inc. (collectively the “Underwriters”), pursuant to which the Underwriters have agreed to purchase on a “bought deal” private placement basis 15,384,000 common shares (the “Common Shares”) in the Corporation at a price of $1.30 per common share (the “Issue Price”) for gross proceeds of approximately $20 million (the “Equity Offering”). The Corporation has granted the Underwriters an option, exercisable, in whole or in part, at any time until and including 30 days following the closing of the Offerings, to purchase for resale, up to an additional 7,692,000 Common Shares at the Issue Price for additional gross proceeds of up to approximately $10 million. NanoXplore is also pleased to announce that it has entered into an updated Memorandum of Understanding (“MOU”) with Martinrea International Inc. (TSX: MRE) (“Martinrea”) which is expected to further develop the commercial relationships between the companies. The MOU provides for increased collaborations between NanoXplore and Martinrea, including commitments by NanoXplore to provide graphene to Martinrea and to assist in the development of graphene-related products and technologies. Martinrea will also assist NanoXplore in the future development of its operations. Furthermore, Martinrea will subscribe for approximately $15 million as part of the Equity Offering. After giving effect to the Equity Offering, Martinrea is expected to own approximately 16% of the issued and outstanding common shares of NanoXplore. Concurrent with the Equity Offering, the Underwriters have agreed to purchase on a “bought deal” private placement basis $10 million aggregate principal amount of convertible unsecured subordinated debentures (the “Debentures”) due December 31, 2023 (“Maturity Date”) with an interest rate of 8.00% per annum from Closing, payable semi-annually on the last day of June and December of each year, commencing on June 30, 2019 (the “Debenture Offering”) (together with the Equity Offering, the “Offerings”). The Debentures will be convertible at the holder’s option into common shares of the Corporation (the “Debenture Common Shares”) at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date fixed for redemption of the Debentures, at a conversion price of $1.84 per Debenture Common Share (the “Conversion Price”), being a ratio of 543.4783 Debenture Common Shares per $1,000 principal amount of Debentures. The Corporation may force conversion of all of the principal amount of the outstanding Debentures and accrued interest (to the date of the mandatory conversion) at the Conversion Price on 30 days’ written notice, should the daily volume weighted average trading price of the Common Shares be greater than $3.00 for any 20 consecutive trading days. Subject to certain conditions, the Corporation may redeem the Debentures in cash, in whole or in part, at any time prior to the Maturity Date by paying a 10% premium on the capital amount of the Debentures. In addition, the Corporation may elect to satisfy its obligation to pay interest on the Debentures (i) in cash; or (ii) 75% in cash and by delivering sufficient free trading Common Shares, to satisfy 25% of the interest obligations. The Offerings are scheduled to close on or about January 11, 2019. The Corporation intends to use the net proceeds of the Offerings for capital expenditures to expand the existing graphene production plant, add new production lines, purchase equipment, increase working capital and for general corporate purposes. The Offerings are subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the TSXV and any applicable securities regulatory authorities. The Corporation has no intention to apply to list the Debentures sold pursuant to the Debenture Offering on the TSXV. This news release does not constitute an offer to sell or a solicitation of an offer to buy the Common Shares, Debentures or Debenture Common Shares (collectively, the “Securities”) in the United States. The Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.