Deal proceeds will be used to bolster financial position
By Susanna Moon
Chicago, Jan. 6 – ViXS Systems Inc. said it plans two non-brokered private placements for total proceeds of C$6,903,280. The company plans to sell convertible debentures along with units of shares and warrants.
Proceeds from the private placements will be used to strengthen the company’s financial position and to provide the working capital.
For the convertibles, the company plans to issue up to C$3,424,266 principal amount of 10% four-year secured subordinated convertible debentures and 2,517,842 common share warrants, according to a company press release.
Each debenture is convertible into common shares at a conversion price of C$0.34 per share, which is a 15% discount to the company’s closing price on Jan. 5.
If the market price of the company’s stock exceeds C$0.80 for 15 consecutive trading days, the coupon on the convertibles will be reduced to a fixed rate of 1% per year, the company said.
The company may call the convertibles in whole or in multiples of C$500,000 at any time with between 30 days and 90 days notice.
The notes are redeemable at 110 between 90 days and one year after issue and then at par after that.
The company also will pay accrued interest.
The convertibles will be secured by a general security interest in all of the company’s assets, which is subordinated to the security interest of a senior lender to the company.
For the convertibles placement, the company will issue up to 2,517,842 convertible debenture warrants. The warrants will allow each investor to purchase that number of common shares that is equal to 25% of the number obtained by dividing the principal amount of convertibles purchased by the investor by the conversion price.
Each convertibles warrant will be exercisable at an exercise price of C$0.60 per common share. If the market price of a common share exceeds C$0.65 for 10 consecutive days, each convertible warrant will become exercisable at any time during a period of 20 days following the 10-day period. Any convertible warrants not exercised during the acceleration period will expire.
The convertible warrant strike price is a 50% premium to the company’s closing price on Jan. 5.
Units placement
In the units placement, the company will issue up to 10,075,336 units at a price of C$0.3453 per unit for proceeds of C$3,479,014. Each unit consists of one common share and one quarter-share warrant.
The price of the units that was reserved with the Toronto Stock Exchange on Dec. 28 represents a 1% premium to the five-day volume-weighted average price on that date, the company said.
Each unit warrant will be exercisable at C$0.50 per common share, which is a 25% premium to the company’s closing price on Tuesday.
Some company insiders will be subscribing for units: Sohail Khan, Indra Laksono Michael Michalyshyn, Perry Chappell John Pomeroy, Michael James Economy, and Michael Cave.
ViXS is a Toronto-based company that designs media processing semiconductor solutions for the broadcasting and consumer electronics industries.
| Issuer: | ViXS Systems Inc.
|
| Amount: | C$6,903,280
|
| Agent: | Non-brokered
|
| Pricing date: | Jan. 6
|
| Settlement date: | Jan. 12
|
| Stock symbol: | Toronto: VXS
|
| Stock price: | C$0.40 at close Jan. 5
|
| Market cap: | C$20.15 million
|
|
|
| Debentures
|
| Issue: | Secured subordinated convertible debentures
|
| Amount: | C$3,479,014
|
| Maturity: | Four years
|
| Coupon: | 10%
|
| Conversion price: | C$0.34
|
| Conversion discount: | 15%
|
| Warrants: | 2,517,842
|
| Warrant strike price: | C$0.60
|
| Call option: | At 110 from 90 days to one year after issue and then at par after that
|
|
|
| Units
|
| Issue: | Units of one common share and one quarter-share warrant
|
| Amount: | C$3,424,266
|
| Units: | 10,075,336
|
| Price: | C$0.3453
|
| Warrants: | One quarter-share per unit
|
| Warrant strike price: | C$0.50
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
