Mr. Eric Eyerman reports
CALIFORNIA NANOTECHNOLOGIES ANNOUNCES NON-BROKERED PRIVATE PLACEMENT AND SHARES FOR DEBT EXCHANGE
California Nanotechnologies Corp. intends to complete a non-brokered private placement of up to 8,333,333 units of the company at a price of 15 cents per unit for total gross proceeds to the company of up to $1.25-million. The offering is subject to an overallotment option allowing the company to increase the units sold by an additional 1,666,667 units for additional proceeds of $250,000, if fully exercised. Each unit will be composed of one common share in the capital of the company and one-half of one common share purchase warrant. Each whole warrant shall be exercisable to acquire one additional common share at an exercise price of 25 cents for two years from the closing of the offering.
The company intends to use the net proceeds raised from the offering for general working capital and corporate purposes. The offering is subject to the receipt of all necessary regulatory and other approvals, including the receipt of approval from the TSX Venture Exchange. Finder's fees may be payable in connection with the offering.
The securities in the offering will be offered by way of the listed issuer exemption under National Instrument 45-106 -- Prospectus Exemptions in all the provinces of Canada with the exception of Quebec. The securities are expected to be immediately freely tradeable under applicable Canadian securities legislation if sold to purchasers resident in Canada, other than securities acquired by insiders which shall be subject to a hold period of four months, pursuant to TSX-V policies. An offering document related to the offering that can be accessed under the company's profile at SEDAR+ and at the company's website will be filed in the next three business days, and the company will not solicit an offer to purchase securities under the offering until the offering document is posted. Prospective investors should read this offering document before making an investment decision. Prospective investors may contact email@example.com for more information about the offering once the offering document has been published.
In addition, the company is expecting to settle pre-existing debt under an existing loan facility for intercorporate debt with Omni-Lite Industries Canada Inc., such debt being described in the company's news releases dated Sept. 12, 2023, Jan. 31, 2023, and May 24, 2022. The company expects to cancel up to $180,000 of debt owing to Omni-Lite through the issuance of up to 1.2 million common shares at a deemed price of 15 cents, assuming the offering is fully subscribed and the overallotment option is exercised in full. The debt settlement is expected to assist the company with preserving its cash, and management believes the debt settlement is in the best interests of the company. Completion of the debt settlement is subject to all necessary regulatory approvals, including the approval of the TSX Venture Exchange.
Eric Eyerman, the chief executive officer of the company, is also expected to participate in the offering by purchasing 2.25 million units at a price of 15 cents (10 U.S. cents) per unit for aggregate gross proceeds of $333,333 ($250,000 (U.S.)). The proceeds for Mr. Eyerman's participation in the offering are expected to be advanced by the company, as approved by the shareholders at the shareholder meeting of the company held on Aug. 23, 2023. Mr. Eyerman's participation in the offering is expected to align management incentives with that of the shareholders, and management believes the advancement is in the best interests of the company. Completion of the advancement is subject to all necessary regulatory approvals, including the approval of the TSX Venture Exchange.
Certain insiders of the company may acquire securities under the offering, with the expected insider participation being at least 25 per cent of the offering. In addition, Omni-Lite is entering into the debt settlement. Any such participation by offering insiders and Omni-Lite will be considered to be a related-party transaction as defined under the policies of the TSX-V and Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The company anticipates relying on exemptions from the minority shareholder approval and formal valuation requirements applicable to the related-party transactions under sections 5.5(a) and 5.7(1)(a), respectively, of MI 61-101, as neither the fair market value of the securities to be acquired by the offering insiders and Omni Lite, nor the consideration to be paid by such offering insiders and Omni-Lite is anticipated to exceed 25 per cent of the company's market capitalization.
About California Nanotechnologies Corp.
California Nanotechnologies envisions a world in which its advanced technologies are used to help make the most innovative products on this planet and beyond. The company is trusted by global leaders to help push the boundaries of applied material science by utilizing its unique technical expertise and vision. Headquartered in Los Angeles, Calif., California Nanotechnologies hosts a complement of advanced processing and testing capabilities for materials research and production needs. Customers range from Fortune 500 companies to start-ups with programs spanning aerospace, renewable energy, defence and semiconductors.
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