Launches C$1.5
Million Private Placement of Common Shares at C$1.80 Per Share
Adopts Omnibus Equity Incentive Plan and
Awards
OTTAWA, ON, Dec. 7, 2021 /CNW/ - Enablence Technologies Inc.
("Enablence" or the "Company") (TSXV: ENA), a
supplier of optical components and subsystems, is pleased to
announce the closing of its previously-announced shares-for-debt
transactions (the "Shares-for-Debt Settlements"), pursuant
to which approximately C$43.6 million
of the total unsecured debt of the Company has been settled for
securities of Enablence as more particularly described below,
thereby completing its previously-announced recapitalization
transaction (the "Recapitalization Transaction").
Craig Mode, Co-CEO and CFO of
Enablence, commented: "The closing of the Shares-for-Debt
transactions completes the Recapitalization Transaction that we
announced in August 2021. We are
incredibly appreciative of the support of our creditors and
shareholders during this process and believe our strengthened
balance sheet should give investors' confidence with regards to the
long-term viability of our business. The $1.5 million in new capital that we expect to
raise through this private placement will also provide us with a
base to reinitiate growth efforts and allow us to better serve our
growing customer base."
Closing of Recapitalization Transaction
The Company completed its Recapitalization Transaction following
the closing of the Shares-for-Debt Settlements with certain
unsecured creditors holding an aggregate of C$43.6 million of the total unsecured debt of the
Company. In settlement of such debt, an aggregate of 12,545,857
common shares of the Company ("Common Shares") and 1,577,841
common share purchase warrants of the Company ("Warrants")
were issued pursuant to the Shares-for-Debt Settlements. Each
Warrant entitles the holder to purchase one Common Share at a price
of C$3.60 per Common Share for a
period ending on December 6,
2024.
As previously announced, certain of the unsecured creditors that
have settled pursuant to the Shares-for-Debt Settlements are a
"related party" of the Company (each, a "Participating
Insider") pursuant to Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). Each Shares-for-Debt
Settlement with a Participating Insider is a "related party
transaction" for the purposes of MI 61-101. The Company is exempt
from the formal valuation requirements of Section 5.4(1) of MI
61-101 for a related party transaction in reliance on the exemption
in Section 5.5(b) of MI 61-101 as no securities of the Company are
listed on the markets specified therein. The Company is also exempt
from the minority approval requirement in Section 5.6 for a related
party transaction in reliance on the exemption in Section
5.7(1)(b), notwithstanding that the Company obtained minority
approval of each Shares-for-Debt Settlement with a Participating
Insider in accordance with MI 61-101 at the Company's annual and
special meeting of shareholders held on October 26, 2021 (the "Shareholders'
Meeting").
The Company has received the conditional approval of the TSX
Venture Exchange (the "Exchange") for the Shares-for-Debt
Settlements and has applied to the Exchange for final approval
thereof. The Common Shares and Warrants issued pursuant to the
Shares-for-Debt Settlement are subject to a statutory hold period
of four months and one day in accordance with applicable securities
laws; however, recipients have agreed to an extended hold period
that will only allow for the release of the common shares and
warrants in 25% increments on the six-, nine-, twelve- and
fifteen-month anniversaries of December 6,
2021.
Launch of C$1.5 million
Private Placement
Following the closing of the Recapitalization Transaction,
Company will seek to raise up to C$1.5
million on a non-brokered private placement basis by issuing
Common Shares at a price of C$1.80
per Common Share (the "Private Placement"); provided,
however, that the Company may elect to increase the size of the
Private Placement to up to C$2.0
million.
The Private Placement is expected to close prior to the end of
December 2021, subject to, among
other things, the approval of the Exchange.
The Private Placement is being completed in lieu of the
previously-announced non-brokered private placement of subscription
receipts of the Company proposed to be completed concurrent with
the Recapitalization Transaction.
Adoption of Omnibus Equity Incentive Plan and Award
Grants
The Company has adopted an omnibus equity incentive plan (the
"Omnibus Equity Incentive Plan"), which was authorized and
approved by the shareholders of the Company at the Shareholders'
Meeting. The Omnibus Equity Incentive Plan provides flexibility to
the Company to grant equity–based incentive awards in the form of
options ("Options"), restricted share units ("RSUs")
and deferred share units ("DSUs").
The Omnibus Equity Incentive Plan replaces the old stock option
plan of the Company, which was most-recently authorized and
approved by the shareholders of the Company at the annual general
meeting of shareholders held on February 5,
2019 (the "Old Option Plan"). All future grants of
equity–based awards will be made pursuant to, or as otherwise
permitted by, the Omnibus Equity Incentive Plan and no further
option-based awards will be made pursuant to the Old Option Plan.
The Company's Old Option Plan will remain in effect only in respect
of outstanding equity–based awards existing thereunder.
A copy of the Omnibus Equity Incentive Plan, and a summary of
the key terms thereof, can be found in the management information
circular of the Company dated September 21,
2021 prepared in connection with the Shareholders' Meeting,
which is available on SEDAR (www.sedar.com) under Enablence's
issuer profile.
On December 6, 2021, the Board of
Directors of the Company approved initial grants under the Omnibus
Equity Incentive Plan to certain directors, officers and employees
of the Company. In total, the Company has awarded (i) 612,000 DSUs
to directors of the Company, (ii) 431,000 RSUs to certain
officers and employees of the Company, and (iii)
669,000 Options to certain officers and employees of the
Company. The DSUs will vest in accordance with the terms of the
Omnibus Equity Incentive Plan. A portion of the RSUs (333,000 RSUs)
are immediately vested to certain officers of the Company, while
the remaining RSUs (98,000 RSUs) will vest in equal annual
instalments over a three-year period following the date hereof. The
Options have an exercise price of C$1.80 per Common Share and will vest in equal
annual instalments over a three-year period following the date
hereof. Following the grants described herein and together with
existing Options outstanding granted under the Old Option Plan, a
total of 1,788,375 awards are outstanding under the Omnibus Equity
Incentive Plan and the Old Option Plan. The Company is permitted to
issue up to 2,750,000 total awards under the Omnibus Equity
Incentive Plan and the Old Option Plan.
About Enablence Technologies Inc.
Enablence is a publicly traded company that designs,
manufactures and sells optical components and subsystems to a
global customer base. It utilizes its patented technologies,
including planar lightwave circuit intellectual property, in the
production of an array of photonic components and broadband
subsystems that deliver a key portion of the infrastructure for
current and next-generation telecommunication systems. The
Company's components are key elements in large optical network
infrastructure builds which enable global networking and
large-scale computing for businesses and individuals, including
data centers and 5G telecommunications networks. For more
information, visit www.enablence.com.
Forward-looking Statements
This news release contains forward-looking statements regarding
the Company based on current expectations and assumptions of
management, which involve known and unknown risks and uncertainties
associated with our business and the economic environment in which
the business operates. All such statements are forward-looking
statements under applicable Canadian securities legislation. Any
statements contained herein that are not statements of historical
facts may be deemed to be forward-looking statements. In
particular, this news release contains forward-looking statements
pertaining to the timing and ability of the Company to complete the
Private Placement, if at all; the ability of the Company to obtain
regulatory (including the TSX Venture Exchange) approvals for the
Shares-for-Debt Settlements and the Private Placement; and the
ability of the Company to raise proceeds under the Private
Placement on terms announced, or at all. By their nature,
forward-looking statements require us to make assumptions.
Assumptions are based in part on the future capital expenditure
levels, the ability to obtain the required regulatory approval for
the Shares-for-Debt Settlements and the ability to fulfill all
conditions precedent to the closing of, and secure the required
regulatory approval for the Private Placement. These statements are
based on current expectations that involve several risks and
uncertainties which could cause actual results to differ from those
anticipated. These risks include, but are not limited to, risks
relating to the Company failing to obtain the requisite regulatory
(including the TSX Venture Exchange) approvals of the
Shares-for-Debt Settlements and Private Placement and
ancillary matters; the impact of the evolving COVID-19 pandemic on
the Company's business, operations and sales; uncertainties
relating to the ultimate spread, severity and duration of COVID-19
and related adverse effects on the economies and financial markets
of countries in which the Company operates; and the ability of the
Company to successfully implement its business continuity plans
with respect to the COVID-19 pandemic. Although the Company
believes that the expectations reflected in the forward looking
statements contained in this news release, and the assumptions on
which such forward-looking statements are made, are reasonable,
there can be no assurance that such expectations will prove to be
correct. We caution our readers of this news release not to place
undue reliance on our forward-looking statements as a number of
factors could cause actual results or conditions to differ
materially from current expectations. Additional information on
these and other factors that could affect the Company's operations
are set forth in the Company's continuous disclosure documents
that can be found on SEDAR (www.sedar.com) under Enablence's issuer
profile. Enablence does not intend, and disclaims any obligation,
except as required by law, to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise.
Neither the Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the Exchange) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Enablence Technologies Inc.
